Cape Verde Regulatory Framework for Renewable Energy Licensing

CONTEXT

The government of Cabo Verde has launched an ambitious plan to further reduce the country’s dependence on imported fossil fuels. In 2008, the Council of Ministers approved the Cabo Verde National Energy Policy which sets out the overarching vision of achieving long-term independence from fossil fuels by promoting renewable energies and improving energy efficiency. In 2011, the government adopted a renewable energy law which allows IPPs to inject electricity from renewable energy sources into the national grid. The government is currently assessing the possibility of increasing the share of RE in the country’s overall electricity mix to 100% by 2020.

The basis for the electricity sector development foresees that any additional utility-scale RE generation capacity should be provided by Independent Power Producers (IPPs) through a competitive tendering process. However, the process is so far not fully defined and the underlying legal, regulatory and administrative (LRA) framework incomplete.

The Ministry of Tourism, Investment and Business Development (Ministério do Turismo, Investimento e Desenvolvimento Empresarial, MTIDE) is in charge of the energy sector in Cabo Verde and is planning to create the necessary conditions to develop a dynamic and transparent market for power production based on renewable energy technologies including storage facilities.

OBJECTIVES

The objective of the assignment was to develop the legal regime for energy production based on renewable energy sources in Cabo Verde. The main goal of the project was to develop Decree-Law 1/2011 which simplified, clarified and incentivized the development of Renewable Energy projects in Cabo Verde.

DESCRIPTION

Gesto developed the legal regime for energy production based on renewable energy sources in Cabo Verde, which resulted in the drafting of Decree-Law 1/2011 which is still active to this day.

Decree-Law 1/2011 is the diploma that establishes the legal framework for access, licensing and operations of independent power producers based on renewable energies in Cabo Verde. The diploma governs the development of energy projects based on the following renewable energy sources:

• Hydro
• Wind
• Solar
• Biomass
• Biogas
• Oceans and tides
• Geothermal

The decree-law also establishes:

• Producer rights
• Producer duties
• Process for interconnectivity to the national grid

Finally, Decree-Law also established the ZDER’s (Zonas de Desenvolvimento de Energias Renováveis), the Renewable Energies Development Areas are designated areas of Cabo Verde were in the future renewable energy projects can be developed in a fast-track way, since these are previously studied location where Environmental Impact Assessment has already been developed and the project for connection to the national grid is already available.

SUMMARY OF SERVICES

• Review of Power Sector Planning Documents and Targets
• Benchmark and Best Practices
• Strategy definition
• Reference Pricing Data Collection
• Legal, Bid & financing/guarantee strategy
• Procurement flow chart and organizational alternatives
• Market Intelligence
• Drafting of LRA documents