The World Bank announced $52.5 million (€50.6 million) in support for Cape Verde to cope with the impact of the war in Ukraine and increase resilience to future shocks.
In a statement released by the delegation of that international financial institution in Cape Verde, it is noted that the support comes under the Development Policy Financing (DPF), approved by the Board of Executive Directors.
“Cape Verde will be better able to cope with the impact of the war in Ukraine and increase resilience to future shocks, particularly those related to climate,” predicted the same source.
The operation, he continued, comprises direct budget support of $42.5 million (€41 million) and a Catastrophe Deferred Drawdown Option (Cat DDO) of $10 million (€9.6 million), which can be quickly disbursed to respond to a natural disaster, including climate-related and public health shocks.
“The objective of the program is to support the government of Cape Verde in strengthening the foundations of a green and equitable private sector-led recovery,” the World Bank further outlined.
According to the World Bank’s resident representative for Cape Verde, Eneida Fernandes, quoted in the press release, the country is recovering from multiple crises, including the COVID-19 pandemic, five consecutive years of drought, and the crisis in Ukraine.
“And seizing the moment to embark on an ambitious reform agenda, this operation supports policy action to lay the foundation for economic recovery by reducing fiscal risks and improving debt transparency, strengthening the resilience of poor and vulnerable households to climate-related shocks, and enabling a sustainable, climate-resilient, private sector-led recovery,” she said.
The operation, the second in a series of two, builds on the first DPF and, according to the World Bank, is aligned with the Strategic Plan for Sustainable Development (PEDSII) 2022–2026.
In September, the World Bank and the Government of Cape Verde met in Praia to negotiate the second package of financing in the form of budget support for the implementation of Development Policies.