Climate impact, jobs and growth

Cabeólica wind farms in the West African island state Cape Verde cover more than 14% of the country’s current energy demand. Besides the obvious climate impact, the wind farm has generated economic growth, jobs and improved income for the benefit of Cape Verdeans.

In spring 2018, Finnfund commissioned an external evaluation of the project’s impact.

Cabeólica wind farms consist of 30 wind turbines on four islands of Cape Verde, some 500 kilometres off the west coast of Africa. With its 25.5 MW capacity, Cabeólica raised the share of renewable energy generation in Cape Verde from 0 to over 20%. Cape Verde is committed to achieve 100% renewable energy rate by 2025, replacing imported oil and diesel.

The impact assessment shows that the wind farms have increased the effective supply of electricity by 14%.

By adding cheaper renewable energy to the grid, Cabeólica is estimated to have decreased the average electricity generation costs in Cape Verde by nearly 8% or € 0.02/kWh. s

Cape Verde, which is comprised of ten islands, has been highly dependent on imported oil. The shift from thermal to wind power is estimated to have displaced 12% (17 million litres) of Cape Verde’s fuel imports, equalling to € 10.6 million or 2.1% of the country’s trade deficit.

Cabeólica is estimated to have decreased outage time by 60%. More reliable power service has led to 0.8% increase in businesses’ production time and overall 0.25% in national business production. This translates into more than 500 jobs and € 2.7 million in incomes.

A key objective of the windfarm is to cut emissions. It has lowered the overall CO2 emissions by avoidance of 58.7 kt of CO2 emissions, which is approximately 12% of Cape Verde’s total emissions.

Finnfund invested in Cabeólica in 2010. The other owners of the project company are Africa Finance Corporation, local utility company Electra, and the Government of Cape Verde.

The impact study was commissioned by Finnfund and African Finance Corporation. It was conducted by Steward Redqueen, which is a specialised consultancy firm that works across the globe advising organisations on impact and sustainability. The methodology focuses on the linkages between reliable, affordable energy and the related economic output and employment increase.

Country: Cap Verde
Sector: Renewable energy
Investment year: 2010