Cabo Verde Second Fiscal Space and Sustainable Growth Development Policy Financing

The Development Policy Financing (DPF) operation supports Cabo Verde’s overarching goal to achieve sustainable and climate-resilient development. The operation, the second in a programmatic series of three, comprises International Development Association (IDA) credits of SDR 1 million (US1.3 million dollars equivalent) on small economy terms and US23.7 million dollars on shorter maturity loan (SML) terms, of which US$6.6 million is from the Scale-Up Window (SUW)- SML. The Program Development Objective (PDO) is to (i) strengthen fiscal resilience; (ii) enable the uptake of digital services and renewable energy; and (iii) enhance economic opportunity. The DPF aligns with the GoCV’s Strategic Plan for Sustainable Development II (Plano Estratégico de Desenvolvimento Sustentável II, PEDS II, 2022-2026) and IDA20 priorities, such as women’s labor force participation, transparency and efficiency in governance, and climate-resilient public investments. The reforms supported through this proposed operation complement the World Bank’s broader engagement in Cabo Verde. The DPF series is aligned with the World Bank FY20-25 Country Partnership Framework (CPF), and reflects the One World Bank approach by leveraging operations from across the World Bank and International Finance Corporation (IFC). It also contributes to several outcome areas of the World Bank’s Scorecard – including (i) effective macroeconomic and fiscal management; (ii) green and blue planet and resilient populations; (iii) affordable, reliable and sustainable energy for all; (iv) digital services; and (v) gender equality.