Cabo Verde: First Sustainable and Equitable Recovery DPF

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The development objectives of the First Sustainable and Equitable Recovery Development Policy Financing in Cabo Verde are to: (i) reduce fiscal risks and improve debt transparency; (ii) strengthen the resilience of poor and vulnerable households and particularly women; and (iii) enable a sustainable private sector-led recovery. This development policy financing is structured around three mutually reinforcing pillars. Pillar A improves debt transparency and reduces fiscal risks from state-owned enterprises (SOEs). The reform program includes measures to: (i) strengthen fiscal risk management, including the adoption of a framework to issue state guarantees; and (ii) reduce fiscal risks by improving the quality, frequency, and coverage of public debt reporting, including from SOEs. Pillar B strengthens the resilience of poor and vulnerable households to shocks, particularly women and including climate-related shocks. This pillar builds on the COVID-19 response program and continues to strengthen the social protection system by: (i) supporting the continued use of safety nets to respond to COVID-19 in the short-term and further strengthening the shock-responsiveness of the safety net system in the medium-term; and (ii) strengthening the usability of the social registry, enabling broader usage for targeted service delivery. Pillar C supports a sustainable private sector-led recovery. This pillar promotes socially and environmentally responsible private investment for a more resilient recovery by: (i) supporting reforms of the electricity sector to attract private investment to lower the cost of services, strengthen energy independence, and reduce GHG emissions; (ii) promoting harmonized, streamlined and more predictable regulations for sustainable private sector investment in the tourism sector; and (iii) supporting the sustainable development of aquaculture, as a core climate adaptation measure for the fisheries sector.