The African Development Bank Group (www.AfDB.org) and the Government of São Tomé and Príncipe have strengthened their development partnership with nearly $18 million in new grant agreements, advancing renewable energy funding, fiscal reforms, and climate resilience. The agreements were signed on Thursday at the São Tomé and Príncipe Investment Forum in Brussels.
These grants focus on two reform pillars: fiscal sustainability and the energy sector transition. Through this programme, São Tomé and Príncipe committed to reforms in public procurement, customs administration, and debt management, while scaling up renewable energy funding to support long-term economic stability.
Budget Support and Fiscal Sustainability Reforms
The first agreement allocates $7.5 million to the third phase of the Fiscal Sustainability and Resilience Program – Supplementary Financing (FSERP-SF). Launched in December 2023, this budget support operation brings total financing under the programme to $20 million, disbursed directly into the national budget to reinforce macroeconomic stability.
Climate-Resilient Agriculture and Fisheries Investment
The second agreement channels Global Environment Fund (GEF) resources into the Co-Management of Climate Extremes for Agriculture and Fisheries Resilience Project (PRIASA III). This initiative strengthens agriculture and fisheries value chains by deploying climate-smart technologies to protect livelihoods from droughts, floods, and water scarcity. The project also reflects growing green energy investment and climate adaptation priorities across island economies.
Energy Transition and Renewable Power Expansion
Energy transition remains a top priority in São Tomé and Príncipe’s National Development Plan. The programme supports improved governance of the national utility, tariff reforms for cost recovery, and an accelerated shift toward clean power. This renewable energy funding framework complements infrastructure investment in electricity generation and distribution. The Nigeria Trust Fund (NTF), administered by the African Development Bank, finances this third phase, reinforcing green energy investment across the energy sector.
Water-Energy-Food Security Nexus Initiative
The third agreement provides $1.4 million through a Project Preparation Facility (PPF) for the Water-Energy-Food Security Nexus under the NEW-ERA initiative. This facility supports sustainable development across water, energy, and agriculture, while laying the foundation for future renewable energy funding and integrated climate solutions.
With total investment reaching $18.9 million, including $10 million from the African Development Bank and $8.9 million from GEF, the project will be implemented through three components. These include enhancing value chains and socio-economic benefits, reducing vulnerability through climate-smart technologies and capacity building, and ensuring effective project management for integrated climate adaptation in agriculture and fisheries.
Long-Term Impact and Development Outlook
Over the next two years, the PPF will develop studies and master plans for integrated water resources management. Planned outputs include a multipurpose dam, a water treatment plant, climate-resilience measures, and a city-wide sanitation plan. By 2030, the programme aims to expand access to potable water, explore hydropower potential, and improve food production, while creating jobs and strengthening ecosystem resilience.
As of 30 November 2025, the African Development Bank Group’s active portfolio in São Tomé and Príncipe totals about $89.4 million across 12 financing instruments. Agriculture leads the sectoral distribution at 43 percent, followed by multisector operations (23 percent), finance (17 percent), energy (15 percent), and water (two percent).
African Development Bank Country Manager for Angola and São Tomé and Príncipe, Pietro Toigo, said: “As São Tomé and Príncipe presents to the global community its National Development Plan and approaches investors to power its private sector, these three financing agreements are a clear sign that the African Development Bank stands with the country as a provider of patient capital and risk mitigation.”
Beyond infrastructure and fiscal reforms, the Bank’s portfolio highlights resilience, food security, renewable energy funding, and green energy investment, while expanding engagement in the green and blue economy. For readers planning travel or business visits linked to these development initiatives, booking options are available through https://travel.afrikeye.com/.
This story was first reported by APO Group on behalf of the African Development Bank. Read the full article here.
