The African Development Bank Group (AfDB) and the Government of São Tomé and Príncipe have strengthened their development partnership through the signing of three new grant financing agreements worth $18 million, aimed at advancing energy transition, climate-smart agriculture, and integrated water-energy-food security.
The agreements were signed on Thursday on the sidelines of the São Tomé and Príncipe Investment Forum in Brussels, underscoring international support for the country’s National Development Plan and long-term resilience agenda.
Strengthening Fiscal Sustainability and Energy Transition
The first agreement provides $7.5 million for the third phase of the Fiscal Sustainability and Resilience Program – Supplementary Financing (FSERP-SF). This budget support operation, initially launched in December 2023, now totals $20 million, to be disbursed directly into the national budget.
The programme focuses on two core reform pillars:
- Fiscal sustainability, including reforms in public procurement, customs administration, and public debt management; and
- Energy sector transition, a priority under the country’s National Development Plan.
Energy-related reforms under the programme include strengthening governance of the national utility, adjusting tariffs to ensure cost recovery, and accelerating the shift towards renewable energy sources. The third phase of the programme is financed by the Nigeria Trust Fund (NTF), administered by the African Development Bank.
Boosting Climate Resilience in Agriculture and Fisheries
The second agreement mobilises resources from the Global Environment Facility (GEF) for the Co-Management of Climate Extremes for Agriculture and Fisheries Resilience Project (PRIASA III).
With a total investment of $18.9 million—comprising $10 million from the African Development Bank and $8.9 million from GEF—the project aims to strengthen agriculture and fisheries value chains while deploying climate-resilient technologies to protect livelihoods from droughts, floods, and water scarcity.
The project will be implemented through three components:
- Enhancing value chains and socio-economic benefits;
- Reducing climate vulnerability through climate-smart technologies and capacity building; and
- Ensuring effective project management for integrated climate adaptation in agriculture and fisheries.
Advancing the Water–Energy–Food Security Nexus
The third agreement involves a $1.4 million Project Preparation Facility (PPF) under the NEW-ERA initiative, designed to advance integrated planning in the water, energy, and agriculture sectors.
Over a two-year period, the facility will finance feasibility studies and master plans for:
- Integrated water resources management,
- Development of a multipurpose dam,
- Construction of a water treatment plant,
- Climate-resilience interventions, and
- A city-wide sanitation plan.
The PPF is expected to pave the way for future investments aimed at achieving universal access to safe drinking water, exploring hydropower potential, and improving food production by 2030. It will also contribute to job creation, ecosystem resilience, improved governance, and the country’s climate commitments.
AfDB Reaffirms Long-Term Commitment
Commenting on the agreements, Pietro Toigo, African Development Bank’s Country Manager for Angola and São Tomé and Príncipe, said:
“As São Tomé and Príncipe presents its National Development Plan to the global community and engages investors to power its private sector, these three financing agreements clearly demonstrate that the African Development Bank stands with the country as a provider of patient capital and risk mitigation.”
As of November 2025, the African Development Bank Group’s active portfolio in São Tomé and Príncipe stands at approximately USD 89.4 million, spread across 12 financing instruments, with an average project age of 4.2 years and a disbursement ratio of 49.5 percent.
Sector-wise, the portfolio is led by agriculture (43%), followed by multisector operations (23%), finance (17%), energy (15%), and water (2%). The Bank’s engagement reflects a strong focus on resilience-building, food security, energy transition, and macroeconomic reforms, alongside growing investments in the green and blue economy and financial infrastructure.