Cape Verde has established itself as a strategic destination for investment in West Africa, notable for its political stability, privileged geographical location and commitment to sustainable development. This report analyses the regulatory environment, identifies priority sectors and explores the financing mechanisms available for the period 2024 to 2026, offering a comprehensive view of the opportunities and challenges in the archipelago.
In recent years, the country has implemented public policies and strategies geared towards sustainability and inclusion, such as the Strategic Plan for Sustainable Development (PEDS) 2021-2026, which defines the guidelines for balanced and sustainable growth. This plan, detailed by the Government of Cape Verde, The aim is to promote energy efficiency, the transition to renewable energies and economic diversification.
Partnerships with international institutions, such as the European Union and the European Investment Bank, have been crucial to financing strategic projects. In September 2024, financing agreements worth 300 million euros were signed, aimed at areas such as digitalisation, ports and renewable energies, in line with the Cape Verde's National Electricity Master Plan (2018-2040). These investments reinforce the country's commitment to reducing dependence on fossil fuels and increasing clean energy storage capacity.
In addition, the tourism sector, which accounts for around 25% of national GDP, continues to be an essential economic pillar. Initiatives such as the Tourism Operational Programme (POT) and the promotion of sustainable tourism have boosted diversification and innovation in the sector, as highlighted by the Cape Verde TradeInvest. At the same time, emerging sectors such as agro-industry and education have received increasing attention, with a focus on technological modernisation and the training of human resources.
This context of economic transformation is complemented by tax incentives and policies to support innovation, which aim to attract foreign investors and foster growth in strategic sectors. With ambitious targets, such as achieving 50% of renewable energy penetration by 2030, Cape Verde is positioning itself as a model for energy transition and sustainable development in the region.
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Cape Verde stands out in the region for its high levels of transparency and good governance, key elements in attracting foreign investment. The government has implemented measures to create a more competitive economic environment, promoting free competition and open trade. National legislation requires local companies and foreign investment projects to carry out environmental impact studies before starting operations, ensuring the sustainability of economic activities. These assessments are supervised by competent government authorities, guaranteeing compliance with environmental standards. In addition, companies are encouraged to disclose information about their corporate governance and social practices, promoting greater corporate responsibility. More information can be found at official government website.
Cape Verde's tax regime is designed to support entrepreneurial activity and attract international investors. The government offers specific tax incentives, such as tax exemptions for companies operating in strategic sectors, including tourism, renewable energies and the blue economy. In addition, entrepreneurship support programmes, such as the Entrepreneurship and Innovation Support Programme (PAEI), have been key to reducing financial risks and fostering business innovation. This programme provides subsidies and credit guarantees for small and medium-sized enterprises (SMEs), facilitating access to finance. Further details on the incentives can be found at Cabo Verde TradeInvest website.
The digitalisation of the regulatory system in Cape Verde has been a priority, with the aim of increasing the accessibility and efficiency of the business environment. All laws and regulations are available online in the official government register (kiosk.incv.cv), allowing investors and entrepreneurs to easily access the information they need. In addition, the Cabo Verde TradeInvest portal provides updates on economic policies and investment opportunities. Despite these initiatives, the country's regulatory agencies still do not solicit public comments on proposed regulations, which represents an area for improvement to promote greater stakeholder participation.
Cape Verde has integrated environmental issues into its strategic planning for sustainable development. National legislation requires companies to promote an ecologically balanced environment, with a focus on preserving natural resources. The government has invested in renewable energies, such as solar and wind power, to reduce dependence on fossil fuels and achieve carbon neutrality by 2050. In addition, the blue economy, which includes sustainable fishing and responsible exploitation of marine resources, has received significant attention as a priority sector for economic growth. Detailed information on sustainability initiatives can be found at UN report.
Public-Private Partnerships (PPPs) have played a crucial role in the development of infrastructure and services in Cape Verde. These partnerships have made it possible to mobilise significant financial resources, especially in areas such as transport, energy and tourism. In addition, the country has benefited from international funding and technical assistance from organisations such as the World Bank and the European Union, which support economic diversification and infrastructure modernisation projects. One example is the port modernisation initiative, which aims to improve inter-island connectivity and increase the competitiveness of maritime trade. More information on PPPs is available at S&D Consultancy website.
Cape Verde has demonstrated a significant commitment to the energy transition, setting ambitious targets for the incorporation of renewable energies into the country's energy matrix. The goal of achieving 50% of electricity generated from renewable sources by 2030 is in line with the National Electricity Master Plan (2018-2040). This plan aims to reduce dependence on fossil fuels by promoting solar and wind energy as the main sources. (Island Express).
International funding plays a crucial role in this sector. The Global Gateway initiative, for example, has made 159 million euros available for renewable energy production, storage and distribution projects until 2029. This investment includes the implementation of energy storage systems and the digitalisation of electricity grids, allowing for greater efficiency and sustainability. (EEAS).
In addition, Cape Verdean legislation, such as Law No. 52/X/2025, introduced in April 2025, establishes specific conditions for the production and distribution of electricity, including financial compensation mechanisms for municipalities and rules for managing public lighting costs. These regulations create a favourable environment for investors interested in clean energy projects. (CV Consultancy).
Sustainable tourism is another priority sector, with Cape Verde positioning itself as a global destination for ecological and inclusive tourism. In 2024, the country registered a record 1.1 million guests, reflecting the continued growth of the sector. The diversification of the tourism offer, promoted by the Tourism Operational Programme (POT 2022-2026), includes investments of over 4.7 billion escudos to enhance rural, cultural and nature tourism. (Voice of the Archipelago).
The ecotourism and local accommodation niches present significant opportunities for investors. Between 2022 and 2025, the supply of beds in local accommodation grew by 182%, representing more than 25% of hotel capacity in some regions. This growth is driven by the demand for authentic and ecological experiences, as well as tax incentives and public policies aligned with the 2030 Sustainable Development Goals (SDGs). (CV Consultancy).
In addition, the integration of technology into the tourism sector, such as the digitalisation of services and online promotion, has the potential to increase the country's competitiveness in the global market. The government has encouraged initiatives that combine sustainability with technological innovation, creating a favourable ecosystem for new businesses.
Digitalisation is a strategic pillar for Cape Verde's economic development, with the goal of the digital economy representing 25% of GDP by 2030. To achieve this goal, the government is investing in strengthening the digital skills of the population and in the technological modernisation of companies. (Forbes Lusophone Africa).
A recent study revealed that Cape Verde is still at an intermediate level of digital readiness, but identified priority areas for intervention, such as accessibility and digital literacy. The next phases include implementing strategies to ensure that all economic actors are empowered to participate in the digital transformation. (Toad).
Digitalisation is also being integrated into strategic sectors such as tourism and renewable energies. For example, the replacement of analogue meters with smart meters in energy networks and the automation of processes in the tourism sector are examples of how technology can increase efficiency and sustainability. (Island Express).
International funding and public-private partnerships (PPPs) have been key to the development of priority sectors. Global Gateway, for example, has made more than 240 million euros available for projects in Cape Verde, including 60 million specifically for the digitalisation and automation of energy networks. (EEAS).
In the tourism sector, the Tourism Operational Programme (POT 2022-2026) provides for significant investments to diversify the offer and promote sustainable tourism. These initiatives are complemented by tax incentives and financial support for entrepreneurs and companies that adopt sustainable practices. (Voice of the Archipelago).
PPPs have also played a crucial role in the renewable energy sector. Projects such as Santiago Pumped Storage and the expansion of the Cabeólica Wind Farm are examples of how collaboration between the government and the private sector can accelerate the energy transition. (ALER).
The renewable energy, sustainable tourism and digitalisation sectors offer promising prospects for Cape Verde's economic growth. The combination of favourable public policies, international funding and strategic partnerships creates a favourable environment for investment. However, it is essential to continue monitoring and adapting strategies to ensure that sustainability and inclusion objectives are met.
Cape Verde's commitment to sustainability and innovation positions the country as an attractive destination for investors looking for opportunities in emerging sectors. The successful implementation of the targets set will depend on the ability to align the interests of the different stakeholders and promote effective collaboration between the public and private sectors.
Cape Verde has been investing in innovative financing mechanisms to boost economic growth and attract strategic investments. These initiatives include venture capital funds and crowdfunding platforms, which have been gaining relevance as alternatives to traditional bank financing. These tools allow start-ups and small businesses to access capital more quickly, reducing their dependence on loans with high interest rates.
In addition, the Cape Verdean government has implemented tax incentives aimed at priority sectors such as renewable energies and sustainable tourism. These incentives include tax exemptions for companies that use green technologies or promote sustainability practices. The combination of innovative financing and tax benefits has contributed to increasing the country's competitiveness as an investment destination. (Digital Cape Verde).
Microfinance plays an essential role in financial inclusion in Cape Verde, especially in rural areas and under-banked communities. Microfinance institutions offer small loans to entrepreneurs who would otherwise not have access to traditional bank credit. This model has been effective in supporting small businesses, promoting local economic development.
At the same time, the fintech sector is transforming the country's financial landscape. The Bank of Cape Verde has conducted studies to map the fintech ecosystem and identify opportunities for regulation and innovation. These initiatives aim to create a more inclusive and efficient environment, allowing financial technologies to facilitate access to credit and other financial services. (Bank of Cape Verde).
Public-Private Partnerships (PPPs) have been a crucial mechanism for the development of technological infrastructure in Cape Verde. These collaborations between the government and the private sector have enabled the implementation of large-scale projects, such as the expansion of internet connectivity and the modernisation of telecommunications networks.
A notable example is the project to digitise the energy networks, funded in part by the Global Gateway initiative, which has allocated 60 million euros for this purpose. This type of partnership not only improves technological infrastructure, but also positions Cape Verde as a digital hub in West Africa. (EEAS).
The Cape Verdean diaspora plays a significant role in financing business projects in the archipelago. Investments from the diaspora are often channelled into sectors such as tourism, education and agro-industry, contributing to the country's sustainable development.
The government has promoted specific programmes to attract this type of investment, offering tax incentives and targeted credit lines. In addition, initiatives such as co-investment funds allow diaspora resources to be combined with local and international capital, maximising the economic impact.
Cape Verde has established strategic partnerships with international organisations and partner countries to boost its economic development. These collaborations have been key to implementing projects in sectors such as renewable energies and sustainable tourism.
For example, the Santiago Pumped Storage project, developed in partnership with international organisations, is an example of how these alliances can speed up the energy transition. In addition, programmes such as the Tourism Operational Programme (POT 2022-2026) have benefited from international partnerships to diversify the tourism offer and promote sustainable practices. (ALER).
The study on Cape Verde's strategic investment roadmap (2024-2026) shows a favourable regulatory environment, underpinned by high levels of transparency, good governance and public policies geared towards sustainability and innovation. The implementation of tax incentives, programmes to support entrepreneurship and the digitalisation of the regulatory system have all contributed to attracting investment and fostering economic growth. However, the lack of public consultation mechanisms on proposed regulations represents an opportunity for improvement to strengthen stakeholder participation in the decision-making process (kiosk.incv.cv).
The priority sectors identified - renewable energies, sustainable tourism and digitalisation - show promising prospects. Cape Verde's commitment to the energy transition, including the target of 50% of electricity from renewable sources by 2030, is supported by international investments and public-private partnerships, such as the Santiago Pumped Storage project (ALER). In tourism, the diversification of the offer and the focus on sustainable practices have positioned the country as an attractive destination, while digitalisation is emerging as a strategic driver for modernising the economy and increasing global competitiveness (Forbes Lusophone Africa).
To maximise the impact of these initiatives, it is crucial to strengthen financial inclusion, expand access to microfinance and leverage the potential of the Cape Verdean diaspora as a source of investment. In addition, the continuity of international strategic partnerships and the ongoing adaptation of public policies will be key to ensuring that the objectives of sustainability, innovation and economic growth are achieved in an inclusive and effective manner.
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