UNIDO GEF 6 CC Cabo Verde 9812 Submission.Pdf Download

GEF-6 REQUEST FOR PROJECT ENDORSEMENT/APPROVAL PROJECT TYPE: MEDIUM-SIZED PROJECT

TYPE OF TRUST FUND: GEF TRUST FUND For more information about GEF, visit TheGEF.org

PART I: PROJECT INFORMATION Project Title: Sustainable energy access to manage water resources: Addressing the energy-water nexus Country(ies): Cabo Verde GEF Project ID:1 9812 GEF Agency(ies): UNIDO GEF Agency Project ID: 170001 Other Executing Partner(s): Ministry of Economy and Employment Submission Date: 06/28/2018 (MEE) – Directorate of Energy Services Resubmission Date: 09/24/2018 (DSE); Ministry of Agriculture and Environment2 (MAA); ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE); Centre for Renewable Energy and Industrial Maintenance (CERMI), National Agency for Water and Sanitation (ANAS) GEF Focal Area (s): Climate Change Project Duration (Months) 36 Integrated Approach Pilot IAP-Cities IAP-Commodities IAP-Food Security Corporate Program: SGP Name of Parent Program [if applicable] Agency Fee ($) 169,241

A. FOCAL AREA STRATEGY FRAMEWORK AND OTHER PROGRAM STRATEGIES3 (in $) Focal Area Trust Focal Area Outcomes GEF Co- Objectives/Programs Fund Project financing Financing CCM-1 Program 1 Outcome A: Accelerated adoption of innovative GEFTF 1,781,484 14,949,551 technologies and management practices for GHG emission reductions and carbon sequestration Total project costs 1,781,484 14,949,551

B. PROJECT DESCRIPTION SUMMARY Project Objective: To catalyze market-based integration of renewable energy and energy efficiency (sustainable energy) technologies in water resource management (in $) Project Components/ Financing Trust GEF Confirmed 4 Project Outcomes Project Outputs Programs Type Fund Project Co- Financing financing 1. Establishment of a TA 1.1 Energy-water 1.1.1. National platform GEFTF 51,300 231,300

1 Project ID number remains the same as the assigned PIF number. 2 The Ministry of Agriculture and Environment is the former Ministry of Rural Development. 3 When completing Table A, refer to the excerpts on GEF 6 Results Frameworks for GETF, LDCF and SCCF and CBIT programming directions. 4 Financing type can be either investment or technical assistance. 1 policy and nexus and Energy to discuss synergies institutional Services Companies between sustainable framework conducive (ESCOs) approach energy system and to the promotion of integrated in relevant water resource energy-water nexus national policies and management established approach and the regulations 1.1.2. creation of Energy Recommendations to Services Companies integrate the gender (ESCOs) dimension into energy- water initiatives prepared and presented to decision makers 1.1.3. Recommendations on how to improve the policy and regulatory environment to promote ESCOs approach in sustainable energy- water resource management projects developed and presented to decision makers 2. Build capacity to TA 2.1 Local capacity on 2.1.1. Training material GEFTF 150,000 440,000 support the market energy-water nexus on how to integrate RE integration of RE and and ESCOs approach and EE technologies in EE technologies in enhanced water management water resources system produced management 2.1.2. Training material on development and management of ESCOs and entrepreneurship produced 2.1.3. CERMI’s staff and other institution’s Staff trained using the programmes and modules produced in Output 2.1.1 and Output 2.1.2 on a train-the- trainer basis 2.1.4. 10 training sessions (5 for each module) are conducted by CERMI trained staff 3. Demonstration and Inv 3.1. Private 3.1.1. ESCOs approach GEFTF 1,358,231 13,970,251 scaling up investment investment in projects and tailored financial in projects focused on addressing the mechanism developed the use of RE and EE energy-water nexus and used to support in water resource increased – demonstration projects management systems implementation of at integrating RE and EE least 3.6MW of in water pumping and

sustainable energy- desalination systems to water investment achieve around 1.6 MW projects of installed capacity 3.1.2. Investment projects using ESCOs approach and tailored 2

financial mechanism implemented to reach about 2MW of installed capacity 3.1.3. Workshop, seminars and exposure visits organized to discuss and promote public private investment partnerships to accelerate the deployment of sustainable energy- water nexus projects 4. Monitoring and TA 4.1. Continuous 4.1.1 Terminal GEFTF 60,000 58,000 evaluation monitoring and evaluation executed evaluation (M&E) of 4.1.2. Project’s progress the implementation of monitored, documented the GEF/UNIDO and recommended project conducted in actions formulated accordance with established GEF and UNIDO procedures and guidelines Subtotal 1,619,531 14,699,551 Project Management Cost (PMC)5 (select) 161,953 250,000 Total project costs 1,781,484 14,949,551

C. CONFIRMED SOURCES OF CO-FINANCING FOR THE PROJECT BY NAME AND BY TYPE

Please include evidence for co-financing for the project with this form. Sources of Co-financing Name of Co-financier Type of Cofinancing Amount ($) Implementing Agency UNIDO Grant 45,000 Implementing Agency UNIDO In-Kind 150,000 Recipient Government Ministry of Agriculture and Environment Grant 120,000 Recipient Government Ministry of Agriculture and Environment In-kind 1,880,000 Recipient Government Ministry of Industry, Commerce and Energy Grant 31,000 Recipient Government Ministry of Industry, Commerce and Energy In-Kind 774,800 Government Institutions CERMI Grant 160,000 Government Institutions CERMI In-Kind 180,000 Government Institutions CVTradeInvest Grant 1,500 Government Institutions CVTradeInvest In-Kind 2,500 Other Multilateral ECREEE Grant 561,000 Agencies Other Multilateral ECREEE In-Kind 143,500 Agencies

5 For GEF Project Financing up to $2 million, PMC could be up to 10% of the subtotal; above $2 million, PMC could be up to 5% of the subtotal. PMC should be charged proportionately to focal areas based on focal area project financing amount in Table D below.

Private Sector6 Resolute Marine Energy Equity 5,509,000 Private Sector MASCARA Equity 3,227,800 Private Sector XS2SOLAR Equity 879,800 Private Sector XS2SOLAR Equity 449,280 Private Sector Elemental Water Makers (EWM) Equity 528,000 Private Sector ADPM Equity 154,368 Private Sector APN SA Equity 67,196 Government Institution Municipality of Ribeira Grande de Santo Equity 84,807 Antão Total Co-financing 14,949,551

D. TRUST FUND RESOURCES REQUESTED BY AGENCY(IES), COUNTRY(IES), FOCAL AREA AND THE PROGRAMMING OF FUNDS (in $) GEF Trust Country Programming of Focal Area GEF Project Agency Fee a) Total Agency Fund Name/Global Funds 2 Financing (a) (b) (c)=a+b

UNIDO GEF Cabo Verde Climate (select as applicable) 1,781,484 169,241 1,950,725 TF Change Total Grant Resources 1,781,484 169,241 1,950,725

a ) Refer to the Fee Policy for GEF Partner Agencies

6 Further co-financing is expected to be mobilized from private sector entities and/or project beneficieries during project implementation after CEO endorsement in-line with the GEF Co-financing Policy GEF/C.46/09.

E. PROJECT’S TARGET CONTRIBUTIONS TO GLOBAL ENVIRONMENTAL BENEFITS7 Provide the expected project targets as appropriate. Corporate Results Replenishment Targets Project Targets 1. Maintain globally significant biodiversity Improved management of landscapes and hectares and the ecosystem goods and services that seascapes covering 300 million hectares it provides to society 2. Sustainable land management in 120 million hectares under sustainable land hectares production systems (agriculture, management rangelands, and forest landscapes) 3. Promotion of collective management of Water-food-ecosystems security and Number of freshwater transboundary water systems and conjunctive management of surface and basins implementation of the full range of policy, groundwater in at least 10 freshwater basins; legal, and institutional reforms and investments contributing to sustainable 20% of globally over-exploited fisheries (by Percent of fisheries, by use and maintenance of ecosystem volume) moved to more sustainable levels volume services

4. Support to transformational shifts 750 million tons of CO2e mitigated (include both Direct: 126,577 metric tons towards a low-emission and resilient direct and indirect) of CO2e development path Indirect: 477,398 metric tons of CO2e Total: 603,975 metric tons of CO2e 5. Increase in phase-out, disposal and Disposal of 80,000 tons of POPs (PCB, obsolete metric tons reduction of releases of POPs, ODS, pesticides) mercury and other chemicals of global concern Reduction of 1000 tons of Mercury metric tons Phase-out of 303.44 tons of ODP (HCFC) ODP tons 6. Enhance capacity of countries to Development and sectoral planning frameworks Number of Countries: implement MEAs (multilateral integrate measurable targets drawn from the environmental agreements) and MEAs in at least 10 countries mainstream into national and sub-national Functional environmental information systems Number of Countries: policy, planning financial and legal frameworks are established to support decision-making in at least 10 countries

F. DOES THE PROJECT INCLUDE A “NON-GRANT” INSTRUMENT? NO (If non-grant instruments are used, provide an indicative calendar of expected reflows to your Agency and to the GEF/LDCF/SCCF/CBIT Trust Fund) in Annex D.

PART II: PROJECT JUSTIFICATION

A. DESCRIBE ANY CHANGES IN ALIGNMENT WITH THE PROJECT DESIGN WITH THE ORIGINAL PIF8 During the PPG phase the set-up of the project was further detailed and has been adapted in accordance with the findings and priorities of the country. Even though, the structure and nature of the current project does not have significant changes if compared with the project design at PIF level, the table below describes the main differences between the CEO Endorsement document and the approved PIF.

7 Update the applicable indicators provided at PIF stage. Progress in programming against these targets for the projects per the Corporate Results Framework in the GEF-6 Programming Directions, will be aggregated and reported during mid-term and at the conclusion of the replenishment period. 8 For questions A.1 –A.7 in Part II, if there are no changes since PIF , no need to respond, please enter “NA” after the respective question. 5

Approved PIF CEO Endorsement Limited contextual and background information was provided Complementary information was incorporated on the context and background of the country with specific emphasis on available renewable energy (RE) sources, use of RE systems applications for water resource management, involvement of the private sector in this market and the current political and macroeconomic situation of the country. Ministry of Economy and Employment– Direction of Energy Ministry Ministry of Economy and Employment (MEE) – Directorate of of Agriculture and Environment; ECOWAS Centre for Renewable Energy Services (DSE); Ministry of Agriculture and Environment Energy and Energy Efficiency (ECREEE); Centre for Renewable (MAA); ECOWAS Centre for Renewable Energy and Energy Energy and Industrial Maintenance (CERMI), National Agency for Efficiency (ECREEE); Centre for Renewable Energy and Industrial Water and Sanitation (ANAS) Maintenance (CERMI), National Agency for Water and Sanitation (ANAS) “Project Components” as referred in PIF’s Table B : Name of the project components PC was slightly modified in order to better reflect the set of activities that it incorporates. The new PC 1. Policy and institutional framework conducive to the promotion of names are: energy-water nexus approach 1: Establishment of a policy and institutional framework conducive to 2. Building capacity to support the integration of renewable energy the promotion of energy-water nexus approach and the creation of and EE technologies in water resources management Energy Services Companies (ESCOs) 3. Demonstration and scaling up investment in projects focused on the 2: Build capacity to support the integration of RE and EE technologies use of renewable energy and EE in water resource management in water resources management 4. Monitoring and evaluation 3: Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems 4: Monitoring and evaluation

“Expected Outcomes” as referred in PIF’s Table B: Name of the “Expected Outcomes” in Table B was changed to: 1.1 Energy-water nexus and Energy Services Companies (ESCOs) 1.1. Energy-water nexus and Energy Services Companies (ESCOs) approach integrated in relevant national policies and regulations approach integrated in relevant national policies and regulations 2.1 Local capacity on energy-water nexus and ESCOs approach 2.1. Local capacity on energy-water nexus and ESCOs approach enhanced enhanced 3.1 Private investments in projects addressing the energy-water nexus 3.1 Private investment in projects addressing the energy-water nexus increased increased – implementation of at least 3.6MW of sustainable energy- water investment projects 4.1 Project progress continuously monitored and evaluated 4.1 Continuous monitoring and evaluation (M&E) of the implementation of the GEF/UNIDO project conducted in accordance with established GEF and UNIDO procedures and guidelines “Expected outputs” as referred in PIF’s Table B: Name of the “Expected Outcomes” in Table B was changed to: 1.1.1 National platform to discuss synergies between sustainable 1.1.1. National platform to discuss synergies between sustainable energy systems and water resources management established energy system and water resource management established 1.1.2 Recommendations on how to integrate the gender dimension 1.1.2. Recommendations to integrate the gender dimension into into energy-water initiatives prepared and presented to decision energy-water initiatives prepared and presented to decision makers makers 1.1.3. Recommendations on how to improve the policy and regulatory 1.1.3 Recommendations on how to improve policy and regulatory environment to promote ESCOs approach in sustainable energy-water environment to promote ESCOs approach in sustainable energy-water resource management projects developed and presented to decision resource management projects developed and presented to decision makers makers 2.1.1. Training material on how to integrate RE and EE technologies 2.1.1 Technical training material on how to integrate RE and EE in water management system produced technologies in desalination plants and water pumping systems developed 2.1.2. Training material on development and management of ESCOs and entrepreneurship produced 2.1.2 Training material on the development and management of ESCOs produced 2.1.3. CERMI’s staff and other institution’s Staff trained using the programmes and modules produced in Output 2.1.1 and Output 2.1.2 2.1.3 CERMI’s staff trained using modules produced from 2.1.1 and on a train-the-trainer basis 2.1.2 on a train-the-trainer basis 2.1.4. 10 training sessions (5 for each module) are conducted by 2.1.4 10 training sessions (5 for each of module) are conducted by CERMI trained staff CERMI’s staff 3.1.1. ESCOs approach and tailored financial mechanism developed 3.1.1 ESCOs approach and tailored financial mechanism developed and used to support demonstration projects integrating RE and EE in and used to support demonstration projects integrating RE and EE in water pumping and desalination systems to achieve around 1.6 MW of water pumping and desalination systems to achieve around 1.6 MW of 6

Approved PIF CEO Endorsement installed capacity installed capacity 3.1.2 Investment projects using ESCOs approach and tailored 3.1.2. Investment projects using ESCOs approach and tailored financial mechanism implemented to reach about 2 MW of installed financial mechanism implemented to reach about 2MW of installed capacity capacity 3.1.3 Workshops, seminars and exposure visits organized to show- 3.1.3. Workshop, seminars and exposure visits organized to discuss case demonstration projects and promote public private investment partnerships to accelerate the deployment of sustainable energy-water nexus initiative 4.1.1 Project progress monitored and evaluated in timely manner 4.1.1. Terminal evaluation executed 4.1.2. Project’s progress monitored, documented and recommended actions formulated “Project’s Expected Contributions to Global Environmental Benefits” Project Target was revised and changed according to the estimates of as referred in PIF’s Table F: direct and indirect GHG expected from the identified demonstration projects carried out using the GEF Climate Change Mitigation Project Targets / 4. Support to transformational shifts towards a low- Tracking Tool. emission and resilient development path: Thus, the “Project’s:Target Contributions To Global Environmental • Direct: At least 76,600 metric tons of CO2e Benefits” as referred in Table E of the GEF CEO Endorsement is • Indirect: At least 88,000 metric tons of CO2e now: At least 603 975 metric tons of CO2e: • Direct: at least 126 577 metric tons of CO2e • Indirect: at least 477 398 metric tons of CO2e

A.1. Project Description. Elaborate on: 1) the global environmental and/or adaptation problems, root causes and barriers that need to be addressed; 2) the baseline scenario or any associated baseline projects, 3) the proposed alternative scenario, GEF focal area9 strategies, with a brief description of expected outcomes and components of the project, 4) incremental/additional cost reasoning and expected contributions from the baseline, the GEFTF, LDCF, SCCF, CBIT and co-financing; 5) global environmental benefits (GEFTF) and/or adaptation benefits (LDCF/SCCF); and 6) innovativeness, sustainability and potential for scaling up. 1) THE GLOBAL ENVIRONMENTAL AND/OR ADAPTATION PROBLEMS, ROOT CAUSES AND BARRIERS THAT NEED TO BE ADDRESSED Country Context and Background Cabo Verde is an archipelago located in the Atlantic Ocean west of the westernmost point of Africa which has a total area of 4,033 square kilometres located in the Macaronesia Region, on the North Atlantic Ocean 570 km off the coast of West Africa. It consists of 10 islands and 13 islets from which 9 of the 10 islands are inhabited. In 2016, the population reached 527,000 from which nearly 65.5% was living in urban areas.10 The island of Santiago, where the capital is located, concentrates nearly 55% of total population. It occupies the 133th position among 188 countries in the Human Development Index (HDI) having been listed in the medium human development category after graduating from the Least Developed Country (LDC) status in December 2007. In 2014, the Gross Domestic Product (GDP) per capita reached US$ 3,609 well above the average for sub-Saharan Africa and that of the SIDSs.11 Cabo Verde islands have steep terrain and volcanic soil making the economy heavily dependent on Foreign Direct Investment (FDI) and tourism as it lacks the necessary natural resources and economies of scale to sustain a large industrial or agricultural base. In 2016, industry accounted for 16.4% of the GDP and the agricultural sector contributed to only 7.4%. In Cabo Verde, rain- fed agriculture is practiced either in lowlands or highlands and produces mainly maize, beans and groundnut while irrigated agriculture is practiced at the bottom of valleys and in the lower parts of the slopes and focuses on sugarcane, cassava and sweet potatoes. Even if just 10% of the land is considered arable, agriculture and agri-businesses generate around 45% of employment

9 For biodiversity projects, in addition to explaining the project’s consistency with the biodiversity focal area strategy, objectives and programs, please also describe which Aichi Target(s) the project will directly contribute to achieving.. 10 UN Data (2017), Cabo Verde, http://data.un.org/CountryProfile.aspx?crName=Cabo%20Verde (February, 2017). 11 Trading Economics (2017), Cabo Verde GDP Annual Growth Rate http://www.tradingeconomics.com/Cabo-verde/gdp-growth-annual (January, 2017). 7 positioning the sector as a key priority to the sustainable development of Cabo Verde. In order to increase the viability of the sector, the installation of efficient technologies, such as drip irrigation and RE for water mobilization have been considered.12 The remaining 76.2% of the GDP is concentrated in the well-developed service sector. However, the service sector –specifically tourism– does not significantly contribute to job creation nor substantially support the expansion of other sectors. The exponential growth in tourism, which has doubled its contribution to the GDP in the last 10 years, and the population growth have considerably increased the national water and energy demands. The supply of water and energy is interdependent. Water is used in all stages of energy production and electricity generation in the same way energy is required to extract, convey, deliver water of appropriate quality and to treat wastewaters. In developing countries, energy costs often account for more than half of the operating costs of water and sanitation service providers. Nevertheless historically, interactions between energy and water systems have been developed, managed, and regulated independently, in most cases. Current challenges, including climate change, rapid population growth and urbanization as well as the introduction of new technologies, have further highlighted the evident interconnection between water and energy systems. By 2030, the demand for freshwater is expected to exceed renewable water supply by 40% and by 2035, the world will need to increase energy supply in more than a third to cover the water and energy requirements of the world population.13 Many forms of energy production generate significant amounts of greenhouse gas (GHG) emissions further contributing to climate change and aggravating shortages in water supply. As such, climate change will continue to put pressure on the limited natural resources available increasing human and ecosystems vulnerabilities. The increasing depletion of natural resources will only heighten the already keen competition between water and energy. As such, the use of an integrated approach to address the opportunities and challenges of the energy-water nexus is essential. During the Bonn Nexus Conference in 2011, the need to devise a comprehensive and systemic approach that considers the interlinkages and possible synergies and trade-offs among water and energy was considered. Following this global trend, Cabo Verde aims to adopt the energy-water nexus approach in order to produce the greatest possible holistic development impact as stated in its Intended Nationally Determined Contribution (INDC). Like other Small Islands Development States (SIDS), Cabo Verde is extremely vulnerable to climate change and faces severe adaptation challenges associated with water resources availability, energy security, and desertification processes. Due to its location in the Sahelian region, Cabo Verde only receives on average 260 mm of rain per year placing it in the semi desert category. In the recent past, the country has been experiencing extreme weather events with major frequency which are likely linked to climate change. In 2014 and 2015, severe droughts caused over 300,000 Cabo Verdeans to depend on external food aid. The droughts ‘severe consequences can be partly explained by Cabo Verde’s natural geography and climate which are not favourable for water storage. In fact, water availability in Cabo Verde is only 537 m3 per person per year; the second lowest of all countries in sub-Saharan Africa. In some localities, conditions are actually worse. For instance, the island of Sal presents mainly a desertic climate, with less than 200 mm of precipitation per year. As the country experiences a long dry season and short intense rainy periods, only 13% of the precipitation is able to recharge the soil, and the rest is lost to evaporation and the sea. The drinking water supply coverage has been growing but it is far from covering the increasing demand. Besides, access to piped water is still limited with low geographic coverage and significant discontinuities in service. Therefore, water security is one of the government’s major concerns. To overcome the low availability of fresh water, desalination plants in urban areas and underground boreholes in rural areas have been used to secure access to freshwater even though they require large amounts of energy to operate. In this regard, Cabo Verde is facing an increasing power deficit which is already hampering economic and social development. In 2014 after considerable investments, the total installed capacity reached 156 MW serving 95% of the population.14 Currently, the electricity production in the 9 inhabited islands relies heavily on imported fossil fuels although around 25% is produced from RE resources. The current dependence on imported fossil fuels for power generation has resulted in electricity tariffs of US$ 0.32/kWh which are the highest in the region as shown in the figure below.

12 Ministry of Rural Development (2013), Cape Verde: Agriculture and Agribusiness opportunities. https://build.export.gov/build/idcplg?IdcService=DOWNLOAD_PUBLIC_FILE&RevisionSelectionMethod=Latest&dDocName=eg_main_059 583 (February, 2017). 13 Austrian Development Cooperation (2015), Focus: Water – Energy – Food Security Nexus http://www.entwicklung.at/fileadmin/user_upload/Dokumente/Publikationen/Fokuspapiere/Englisch/Focus_Nexus.pdf (February, 2017). 14 SE4ALL (2015), Action Agenda for the Sustainable Energy for All: Cabo Verde http://www.se4all.org/sites/default/files/Cabo_Verde__AA_EN_Released.pdf (January, 2017). 8

FIGURE 1: COMPARISON OF ELECTRICITY TARIFFS ACROSS AFRICA

The high electricity costs associated with water pumping and desalination plants have been one of the main deterrents to advance water access in the country. Thus, to improve water access, the production of affordable energy and its adequate use are of outmost importance. As stated in Cabo Verde’s Energy Policy, ER and EE have been regarded as strategic, environmental and cost-effective solutions to the challenges posed by the energy-water nexus.

Barriers and opportunities to be addressed by the GEF/UNIDO project The GEF project aims at addressing existing barriers for RE and EE in water resource management on the one hand and at strengthening existing promising trends and developments in the sectors on the other hand. • Lack of appropriate regulatory and institutional framework conducive to the integration of RE and EE systems in water resources management and for the creation and establishment of ESCOs As Cabo Verde has either no traditional energy resources nor enough fresh water available, so delivering these services to the population has been a binomial challenge to the country, since there are no water resources that could be used to produce electricity and no traditional energy resources that could be used to produce the water. Until now, the country has imported fossil fuels to produce electricity and used the electricity produced to pump the underground water or desalinate the seawater in the islands/villages where there is not enough underground water. For agriculture purposes, the country has been using the limited surface water available in some valleys and also mobilizing underground water from the aquifers. These classic solutions remained feasible for a long period while the price of oil and the water demand remained low. However on the one hand, with the increase of oil prices in the international market, the cost of water increased exponentially due to the cost of electricity. On the other hand, with the increase of population and tourism, the water demand increased causing the boreholes to be dig deeper (more than 200 m) and the number of desalination plants to grow impacting the cost of energy for the provision of water. The high cost of water has been one of the main causes of unsustainability/unaffordability of several water projects with important negative impact on the economy and on vulnerable social extracts including women. The lack of an integrated approach for the water and energy sector has been one of the main handicaps for the issues refereed in the paragraph above. Indeed, the energy and water projects have been managed independently and sectorial policies have been fragmented. This fragmentation caused additional costs, inefficiency and unsuitability to several projects. For example, the price of water due to the high energy cost in some areas have reached 0.6 EUR/m3 making the farmers to leave their lands or reduce the irrigation areas as alleviation measures to bring down the electricity bill. Other example is that frequently the community’s water pumping stations do not have access to the nearby grid while the village that received the water does, revealing a disconnectivity between the supply of electricity that is provided and managed by the energy sector and the water pumping stations that are managed by the water sector.

Moreover, along with the harmonization and integration of the policies for both sectors, it is important that this is done for other sectors as energy-water nexus projects can be easily extended to energy-water-agriculture nexus projects; energy-water-health; energy-water-education etc. This harmonization is key to ensure that the custom and fiscal policies are adapted to sustainable nexus projects/initiatives. Other aspects are the fact that the management of water pumping stations has been normally taken by the NGOs/farmers who normally do not have enough technical skills or have been properly trained for the maintenance services. The lack of proper maintenance services has frequently caused technical problems that they cannot fix locally, and the systems stop working while technicians come from the capital. Having the legal and regulatory framework for the ESCOS in energy- water sector in place will contribute significantly to strength the maintenance services and success of energy-water projects. The current legislation does not allow the creation of ESCOs to supply energy. As such, a model for the creation and operation of energy-water nexus projects is needed in Cabo Verde to create a market for this type of companies. Other barriers are: • Lack of integrated institutional capacity to deal with energy-water nexus projects/initiatives: there is a need to integrate the institutional capacity of both sectors (energy and water) to address, analyse and support these initiatives in an integrated manner. Policies and regulations should be analysed and reformulated to ensure the linkages between the two sectors; • Lack of incentives for the development of RE and EE projects associated with water management systems: there is a need to put in place a package of incentives for the development of sustainable (RE and EE) energy-water nexus projects. • Lack of regulation, standards and rules: the inexistence or inadequacy of specific regulation or lack of harmonization undermines the penetration of new technologies due to the lack of a clear framework for both investors and potential customers. Clear and fair legislation and rules could boost the penetration of sustainable energy solutions in water management systems. • Lack of information on the benefits associated with the use of RE systems in water resource management systems when compared with traditional fossil fuels. • Lack of integration of gender considerations on the energy – water nexus. Although gender is considered in the water sector and several analysis are conducted by ICIEG and ANAS on the impact of the water and sanitation sector on gender (ANAS has even a gender department), the energy sector does not have an analysis of the impacts of the sector on gender nor has indicators or clear recommendations or policies/strategies addressing it. There is a need to integrate the policies/regulations/incentives of both sectors so that gender analysis and recommendations are taken on board. To address all issues mentioned previously, it is crucial that an integrated approach for the energy-water sector using a nexus approach is established, including the development and operationalization of a regulatory and policy framework which contains gender considerations in the energy-water nexus. In order to strengthen the maintenance services relative to the energy-water projects, the establishment of a legal and regulatory framework for the promotion of ESCOS is foreseen as a solution. • Limited knowledge regarding the financial and commercial viability, and availability of financial products for energy-water nexus projects Currently, financing projects in Cabo Verde has been very expensive with the commercial loans varying from 6% to 14% and a requisite of 30% of down payment. Reducing the financing cost in Cabo Verde has been a very hard task due to the specific market which is very small and dominated by micro and small companies. To foster the economic development of the country, successive governments have recognised the role of the private sector on the economy, as well as the importance of reducing the financing cost associated with the introduction of innovative technologies. Recently the government has been creating several institutions aiming to support entrepreneurship and investment (such as CV Trade Invest, Pro-Empresa, Agência para o Desenvolvimento Empresarial e Inovação (ADEI), etc.). Nonetheless, the Chamber of Commerce of Cabo Verde still claims that there is a lack of financing for private sector activities. For the energy-water nexus project, the commercial Bank Caixa Económica has a product that was establishes in 2013 that provides loans towards RE products with an interest rate of 10% over 5 years, for a maximum investment of 28,000 USD and a down payment of 30%. Although it exists, it has not been used yet. Traditionally, the RE and water mobilization projects are associated with high cost and risk by economic players. There is a certain mistrust regarding the use of sustainable energy technologies (RE and EE), either because they are unfamiliar with the technology or because they are not considered reliable enough or difficult to control and operate. The dissemination of successful demonstration projects can support raising awareness on the issue.

To incentivise the financial and commercial viability of RE products for the Cabo Verde economy, it is crucial for the projects to have access to reasonable sources of finance. Currently, there are several financing instruments available that can be used together to address the financing of energy-water nexus projects: • Revolving Fund for Water and Sanitation (FASA from the Portuguese, Fundo Rotativo de Água e Saneamento): An autonomous revolving fund created by the Cabo Verde Government –with its own legal entity and administrative, financial and patrimonial structure– to mobilize and manage financial resources for projects in the water sector. FASA optimizes the management of financial resources by using Government funds and international donations as leveraging mechanism to get other financial resources for investment in water sector related projects. • ECOWAS Renewable Energy Facility (EREF): grant facility managed by the Secretariat of the ECOWAS Centre for Renewable Energy and EE (ECREEE) based in Praia, Cabo Verde. It provides grant co-funding for small to medium sized RE and EE projects in rural and peri-urban areas. • ProEmpresa financing instruments - ProEmpresa aims at being a reference partner and driving force for the local and national economy by promoting inter-institutional cooperation in support of entrepreneurship. Its mission is to promote, facilitate and monitor the national private investment of micro, small and medium enterprises (investment less than fifty million ECV) in all sectors of the national economy. ProEmpresa supports entrepreneurs through three financing mechanisms (i) ProEmpresa that helps the promoter to prepare a bankable project for financing; (ii) Pro-Garante that provides up to 50% guarantee; and (iii) Pro-Capital that can provide 5- 10% of co-financing to projects with values up to 50,000 EUR. • Bank Loans: although not in place yet the RE loan from commercial bank Caixa Económica is being revised and a new commercial bank loan from Banco Comercial do Atlântico (BCA) is being put forward for RE projects. Both loans products are expected to have slightly better interest rates for companies (i.e., 6.5% to 9%) for up to 10 years. These products can be used together with the other incentives refereed above to co-finance sustainable- energy nexus project. The lack of access to finance and the lack of financial incentives, risk perception and lack of information / awareness / knowledge may prevent the creation of ESCOs as ESCOs need up-front capital to ensure the provision of the contracted services for which they are paid for. Besides, there is a generalised lack of information on sustainable energy-water projects, their identification and technical design, feasibility assessment/commercial viability, importance of management and maintenance of systems. This not only prevents possible developers to identify and develop this type of projects but also increases the risks perceived by the financial sector for this type of services. To foster the implementation of energy-water nexus investment projects there is a need to: (i) develop a financial mechanism that makes use of the existing available instrument in Cabo Verde, to enable access to finance for energy- water nexus projects to project proponents and provide financing for ESCOs establishment and operations at a lower cost them the actual available loans; (ii) develop an ESCO model that can be adopted in Cabo Verde and that is adapted to sustainable energy-water initiatives; (iii) build capacity of the local financial institutions, market enablers and market players of the existing financial mechanism and/or existent financial options as well as on energy-water nexus project / project development / management and maintenance and on ESCOs creation and services; and (iv) implement sustainable energy-water nexus investment projects to demonstrate its technical and financial feasibility as well as to raise awareness on their potential for the development of both sectors and its contribution to the country’s sustainable development as well as on it direct benefits for the population. • Lack of technical and capacity building skills on the integration of RE and EE in water resources management and on entrepreneurship and ESCOs In Cabo Verde most of the desalination plants and water pumping systems are either connected to the grid or powered by diesel generators. As such while the growing number of RE projects installed in the country has promoted awareness of utility-scale projects, the technical knowledge and experience on how to install, operate, maintain and integrate EE practices on RE powered desalination plants and water pumping systems are still very restricted. In fact, some of the sustainable energy-water projects already implemented in Cabo Verde have failed due to deficiencies on the engineering design or lack of proper maintenance. Thus, having expertise for the correct engineering and proper maintenance are crucial for the success of energy-water nexus projects. As Cabo Verde has no experience with ESCOs, it is important to raise awareness on the role that ESCOs can have in providing these services and to create local capacity to develop and supply ESCO services to support the implementation, management and maintenance. For this barriers to be addressed it is important: (i) to create a critical mass of trainers on the identification, development, management and maintenance of RE and EE systems associated with water resource management projects as well as with entrepreneurship and ESCOs; (ii) to train technicians for identification, development, management and maintenance of RE and EE systems associated with water resource management projects as well as on entrepreneurship and ESCOs; (iii) to train the companies, engineers and consultants for the engineering of sustainable energy-water nexus projects; (iv) to develop guidelines about management and maintenance of sustainable energy-water nexus project.

2) THE BASELINE SCENARIO OR ANY ASSOCIATED BASELINE PROJECTS 11

In this regard, Cabo Verde has managed to circumvent its lack of water resources through desalinating the abundant seawater that surrounds it. Nevertheless, the domestic water consumption in Cabo Verde, which is around 35 liters per capita per day, is still close to subsistence levels. In the early 70s, a desalination plant started supplying fresh water to the São Vicente Island. Today, 85% of the Cabo Verdean population, mostly living in urban areas, is supplied by several desalination plants.15 In some islands like São Vicente, Sal and most of Boavista, desalinated water is the only source of drinking and irrigation water due to the scarcity of fresh water resources. At present, the only desalination technology used in Cabo Verde is reverse osmosis which requires a great amount of energy for its operation; even though it is more energy efficient than other desalination techniques. In the main towns and cities, water is mostly produced and distributed by ELECTRA –the Cabo Verde utility– even though there are few other operators who provide desalinated water for the urban population and industry. 16 In rural areas, water management and distribution vary depending on the water sources; namely if it is obtained from springs or pumped from boreholes. In the case of springs, the water resources are considered private property tied to the ownership of the land in accordance with the system inherited from colonial times. Spring water is mostly used for agricultural purposes and its distribution is carried out through informal arrangement between private individuals. As for boreholes, the government of Cabo Verde has taken policy measures to decentralize water management by giving greater responsibility to municipal authorities, by promoting partial privatization and by fostering the active engagement of local population through the development of community-type management structures. As such, underground boreholes are mostly managed by the municipalities through concessions to small private operators (i.e. private individuals, neighbourhood committees, farmers’ associations, etc.).17 According to data collected from various ministries, there are 360 operational boreholes distributed across uneven terrain amid far-flung communities throughout the country. The boreholes intended to supply drinking water for the population are under the direct responsibility of municipalities while the ones intended for agricultural activities are under the responsibility of the Ministry of Agriculture and the Environment. From the 360 boreholes, about 90% of them are equipped with pumping systems connected to the grid or diesel generator, whereas only 10% have integrated solar systems. Boreholes operators have reported great difficulties in maintaining on-grid and diesel systems due to the prohibitive cost associated with energy supply. The high energy prices have greatly hindered the normal operation of the boreholes leading in many cases to their abandonment. Besides, the vague pricing policy has allowed each municipality to approve water prices using unclear criteria which discourages private sector involvement. Furthermore, the last part of water transportation in rural areas is done by women and children, who have to walk around 4 to 5 km of rugged and hilly terrain to the nearest water source to collect water.18 Water collection is the most gendered task with women and children putting much time and effort to complete it given by their traditional gender role. Often, water collectors are at risk of head and spinal injuries from the strenuous task of carrying 20 liters or more of water on their heads at a time. Besides, by investing so much time on water collection, women have to relegate other competing needs such as health, education, income generating activities, etc. The scarcity of water resources and the lack of capital for infrastructure investment together with the weak "affordability" by customers have affected both the service provision in terms of hours per day and the drinking water quality in terms of meeting World Health Organization (WHO) standards. In particular, the high electricity cost associated with water pumping systems and desalination plants has been one of the main deterrents to increase water access in urban and rural areas. In fact, ELECTRA has by far the most expensive water tariffs in Africa at around $4/m3. 19 ELECTRA, which has a minority private sector stake, provides not only water but energy services in Cabo Verde. The installed capacity has been growing at a rapid pace and reached 156.5 MW in 2014. The utility operates 9 independent electric systems and produces electricity through 3 diesel power plants (LFO and HFO), 6 diesel power plants, 5 wind farms and 2 solar power plants.20 As electricity production is largely dependent on diesel plants, which rely on expensive fuel imports, the price of electricity is the highest for the region at around US$ 0.32/kWh. Almost 50% of the electricity demand comes from the domestic sector; the commercial, industrial and agricultural sectors are responsible for about 38%; while ELECTRA’s internal energy consumption which includes the energy intended for desalination plants represents about 18% of the total demand.21

15 Dias Fonseca, João (2014), The Current Situation of RE- Status and Challenges http://www.irena.org/documentdownloads/events/2014/september/ProjectNavigator/3.%20FONSECA_Status%20and%20Challenges%20of%20 RE%20Deplyment%20in%20Cabo%20Verde.pdf (January, 2017). 16 Suarez Bosa, Miguel (2015), Water Institutions and Management in Cabo Verde http://www.mdpi.com/2073-4441/7/6/2641/pdf (February, 2017). 17 Ibid. 18 Ibid. 19 Briceno-Garmendia, Cecilia (2011) Cabo Verde’s Infrastructure: A Continental Perspective http://elibrary.worldbank.org/doi/abs/10.1596/1813-9450-5687 (February, 2017). 20 Dias Fonseca, João (2014), The Current Situation of RE- Status and Challenges. 21 ECREEE/UNIDO, Cabo Verde : Energy Analysis And Recommendation, http://www.ecreee.org/sites/default/files/unido- ecreee_report_on_Cabo_verde.pdf (January, 2017). 12

As the fuel and fuel transportation costs are expected to increase in the future, ELECTRA and the national government have been actively seeking to expand the share of renewables as well as to increase EE. In Cabo Verde, the integration of RE and EE technologies has been considered a top priority due to the positive externalities produced in other sectors. In the last years and as a result of the government’s efforts, EE gains have been experienced, especially in the building and domestic appliances sector,22 while the percentage of RE in the energy mix increased from 1.2% in 2010 to around 25% in 2014.23 For instance, in Brava Island, electricity is currently provided by diesel generators at prices ranging from US$ 0.25 to US$ 0.32 kWh and water is supplied for US$ 2.35 or US$ 4.93/m3 depending on the quantity. By introducing a hybrid wind-diesel system and a desalination plant, it is possible to reduce the electricity costs from US$ 0.15 to US$ 0.21/kWh and to reduce water costs to only US$ 1.53m3. 24 Likewise under the UNIDO-GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde” a pilot in Praia Branca integrated an 11.5 kWp solar PV grid-connected system to a water pump for irrigation purposes. The operational results have demonstrated the positive impact of RE in the cost of water as the monthly bill of the local association responsible for the water pumping system decreased by 23%. Taking into consideration the high cost of electricity and the heavy load that pumping systems and desalination plants place on the national grid, RE and EE are meant to play a decisive role in enhancing water accessibility in Cabo Verde. It is expected that cuts in energy costs and on-grid demand will have a direct impact on reducing the financial barriers to access drinking water and improving the sanitary conditions and comfort of the population. 25 A complete overview on the situation is available in the baseline report prepared during the PPG phase (see Annex H). Baseline policies At the policy and regulatory level, Cabo Verde has developed an ambitious programme for increasing energy access tapping on the available RE resources, mainly solar and wind. The country contains clear plans, policies and a regulatory framework in place concerning the energy sector and the RE subsector, of which the key ones are the following: • The National Renewable Energy Action Plan (NREAP), the National Energy Efficiency Action Plan (NEEAP) and SE4ALL Action Agenda (AA) endorsed by Resolution 100/2015 which provide guidance on the country path towards 2030 regarding RE, EE and energy access. The NREAP revised the target for RE penetration for 2020 as stated in the Renewable Energy Plan for Cabo Verde of 2011. • Renewable Energy Plan for Cabo Verde of 2011, approved by Resolution of the Council of Ministries nº 7/2012 is the investment plan aimed to define and schedule a set of investments that achieve a RE penetration rate of 50% by 2020 in Cabo Verde. • Decree Law n° 1/2011 of the 3rd of January on the Promotion and Incentives for the Use of RE and its modification by Decree Law n° 18/2014 are key legislative instruments that discuss about the incentives applicable to RE projects in the country. It establishes the regime for promotion, licensing and exploitation of independent production of electricity based on RE sources. Decree Law n° 1/2011 creates incentives in the form of fiscal incentives and custom duties exemptions, which are further updated through Law nº 26/VIII/2013 Code of Fiscal Benefits with the modifications introduced by the Law n° 102/VIII/2016. • Law nº 26/VIII/2013 Code of Fiscal Benefits with the modifications introduced by the Law n° 102/VIII/2016, lays the principles and rules applicable to tax benefits, establishes its content and sets the rules for their granting and control. In this regard, Cabo Verde offers tax incentives for investment (Investment Tax Credit by deduction of Corporate Income Tax (CIT) collection in an amount equal to 50% for RE production and manufacture and installation of RE equipment) and exemption from custom duties to registered industrial companies on materials incorporated in the production of goods or services intended for RE generation. • Sectorial Strategic Plan for RE (SSPRE) approved by the Resolution of the Council of Ministers n° 7/2012, lays the plan for RE based on studies showing the available RE sources in the country and identified the “Renewable Energy Development Zones” (REDZ). REDZ are the areas reserved for the installation of RE equipment because of their great potential. The SSPRE due to its territorial scope, also serves as sectorial policy instrument to program and implement RE development policies, as Sector Plan for Spatial Planning (SPSP) according to the National Regulation on Spatial and Urban Planning. The installation of RE equipment in REDZ does not require the completion of the Environmental

22 UNDP-GEF Project (2015), Cabo Verde Appliances & Building Energy-Efficiency Project (CABEEP), https://info.undp.org/docs/pdc/Documents/CPV/PIMS%204996%20%20UNDP%20GEF%20Cape%20Verde%20Project%20Final.pdf (May, 2017). 23 UNFCCC (2015), Intended Nationally Determined Contribution Of Cabo Verde, http://www4.unfccc.int/submissions/INDC/Published%20Documents/Cabo%20Verde/1/Cabo_Verde_INDC_.pdf (February, 2017). 24 Bognar, Kristina (2013), Energy and water supply systems in remote regions considering renewable energies and seawater desalination. http://www.reiner-lemoine-stiftung.de/pdf/dissertationen/dissertation_bognar.pdf (January, 2017). 25 SEFORALL (2015), Action Agenda for the Sustainable Energy for All: Cabo Verde. 13

Impact Assessment (EIA) process for licensing, i.e. the SSPRE also serves as an instrument that facilitates investment in RE. • Dispatch n° 14/2011 approves the tariff regulation of the electricity sector and establishes the electricity sector tariff methodology. • Cabo Verde National Energy Policy approved in June 2008 by the Council of Ministers. This document sets out the Government of Cabo Verde objectives for the energy sector and also the aims for the RE sub-sector. The vision set out for Cabo Verde’s energy sector is to “build up a future independent of fossil fuels”. The main aims of the electricity subsector are to: (i) invest and adopt RE and alternative technologies for continually decrease Cabo Verde’s dependence on fossil fuels; (ii) reduce the dependency of energy imports and facilitate the access to a continuous supply of energy; (iii) ensure the sustainability of the energy sector in terms of environmental, socio-political and economic point of view; (iv) ensure an adequate and efficient supply, distribution and consumption system in all Cabo Verde. This policy in terms of RE also puts forward the goal of achieving 50%of RE in the electricity by 2020; and to have at least one island with 100% of electricity supplied from RE. For the electricity coverage, it fixed a target of 100% coverage at the national level by 2015. • Decree Law nº14/2006, of 20 of February, revises the Decree-law nº54/99, of 30 of August that established the bases of the Electric System in Cabo Verde (organisational framework, role of stakeholders and tariff regulatory principles). This revision better evidences the principle of freedom of establishing the production of electricity in Cabo Verde. • The Decree Law n° 30/2006 on Independent Power Licensing regulates the activity of independent power production (Independent Power Producers (IPPs) and Auto-Producers), regardless of the source of energy. The Ordinance n° 18/2006 further regulated Decree-Law No. 30/2006 on electric energy production activities - it rules on the guarantees related to energy production activities, by defining the value, validity and beneficiaries of those. The Decree Law n° 30/2006 was amended by the Decree Law n° 61/2010 on electric energy production activities and the Decree Law n° 1/2011 regulating promotion, incentives, access, licensing and exploitation of independent and self-production of electric energy. Moreover, in line with the Decree Law n.30/2006 is the Ordinance n.21/2006 of 28th of August that sets the tariff and payment procedure for Independent Producers. • Decree Law nº41/2006 of 31 July, defining the Electric Energy Crisis and respective corrective measures. • The Decree Law nº 26/2003 created the Economic Regulatory Agency (ARE, in Portuguese Agência de Regulação Económica). The Decree Law nº 27/2003 contains ARE’s statutes. • Growth and Poverty Reduction Strategy Paper III (GPRSP III) 2012-2016 that refers energy and energy infrastructure has one of the important issues and set out some recommendation for improvement of the sector. • Base Law in Spatial and Urban Planning (BLLUUP) – Legislative Decree No. 1/2006 (in the wording of Decree Law No. 6/2010 of 21 June) defines the subaltern instruments such as the National Spatial Planning Directive (NSPD) and the Special Plans for Spatial Planning – SPSP used in spatial planning. The NSPD properly integrates sustainability and EE in buildings The NREAP, NEEAP and SE4ALL AA will be complemented by the National RE Electricity Master Plan 2015-2030 once this is completed. The objective of the National RE Electricity Master Plan 2015-2030 document is to develop electrification scenarios in line with the overall national electricity policy. In 2017, the Government of Cabo Verde developed the Strategic Plan for Sustainable Development (PEDS) that aims to operationalise the Government Programme for the IX Legislative Administration. This plan includes the National Programme for Energy Sustainability and the Water and Sanitation Programme that address energy-water nexus issues in the country. It should be adopted by the cabinet in 2018. The main stakeholders in the energy sectors are the following: • The MEE: main body responsible for supervising and executing public policies related to economic activities. The energy sector falls under the MEE since 2016. • National Directorate of Energy, Industry and Commerce/ Directorate of Energy Services (DNEIC/DSE): the official technical regulator of the energy sector. It is responsible for the development of strategies, regulation and for the coordination of the implementation of the energy sector policies. It also manages the implementation of the energy sector. It reports to the MEE. • Energy Projects Management Unit (UGPE): it is responsible for managing large project loans on several sectors. It reports to the Ministry of Finance and interacts with the DSE on some energy projects). • ARE: which is an administrative institution with regulatory, oversight and sanctioning powers. It sets the tariffs applied to the clients to sell electricity and water in the market. It is also responsible for the supervision the compliance of the regulators;

Cabo Verde has in place different policies and regulation in order to strength the management of water in the country. The main water sector regulatory framework is composed by the following documents: • The Government Programme for 2016-2021 26 where the Government of Cabo Verde has committed –among other things– to achieve universal access (100%) to water supply and to adopt a social tariff for water. The programme specifically states that the focus should be on wind and solar energy, for remote areas for agricultural applications and the use of hybrid diesel/wind/solar systems to produce desalinated water. • PEDS 2017-2021 27 developed in 2017 seeks to operationalise the Government Programme for the IX Legislative Administration. It includes the Water and Sanitation Programme that aims to ensure the right to water and sanitation, ensure access to and accessibility of good quality water and sanitation services, with a view to environmental quality, gender equality and social inclusion, public health and, above all, improving socio-economic conditions and the well- being of populations throughout the national territory. • The National Strategic Water and Sanitation Plan (Plano Estratégico Nacional de Água e Saneamento - “PLENAS”) endorsed by the Resolution 10 of 2015 provides strategic guidance to the different government levels and a detailed planning process to be carried out in the islands. A key strategic objective of PLENAS is to ensure that every citizen has minimum daily water consumption level of 40l and a maximum of 90l as well as the reduction of the distance to levels not exceeding ten (10) minutes of travel for those who do not have home connections. • The Action Plan for the Integrated Management of the Water Resources (PAGIRE) endorsed by the Resolution 66 of 2010 has the main purpose to strike a balance between the current use of water resources and its conservation for future generations. This document is a reference for the Government and the different actors that operate in the field of water for the horizon between 2010-2020 28. • National Basic Sanitation Policy and Plan (2010): seeks to set a new path for sanitation in the country, with particular focus on improving institutional framework and basic sanitation infrastructure. This policy and plan states that the sanitation sector is open to private investment –including Public Private Partnerships (PPP)– as the Law n. º 49/VII/2009 of the 30 of December, allows for the establishment of concession contract in the investment projects related to: (a) water distribution services for public use; transmission and distribution of electricity and (c) sanitation services, including the collection and treatment of solid waste of the urban population 29. • Water and Sanitation Code (CAS, 2015) that defines (i) the fundamental principles applicable to water resources and establish standards that guarantee their preservation, quality, sustainability and rational use; and (ii) the public and land supply and sanitation systems, mechanisms for economic and financial sustainability and the establishment of mechanisms to safeguard water resources 30. • The Social and Gender Strategy for the Water and Sanitation Sector (ESGAS) created in 2015 has the main function to operationalize the consolidated social and gender objectives in the National Strategic Water and Sanitation Plan (PLENAS) and thus aims to give form and content to its commitments. • Communication Strategy for Changing the Water, Sanitation and Hygiene Behaviours (2017) developed within the framework of the water and sanitation sector reform aims to promote the change of attitudes and behaviours of hygiene and rational use of water of the population in general, and greater participation and engagement of a set of key players in the ongoing reform processes. The water sector has in place the FASA which is a Fund that aims at optimizing the management of financial resources using funds from the government and international donations as leverage to blend them with other financial resources to finance investments. The most significant bodies that have been set up under the National Council for Water and Sanitation (CNAS, from the Portuguese acronym) which plans, develops and protects water resources are: • ARE which is an administrative institution with regulatory, oversight and sanctioning powers; • ANAS endorsed by resolution n.46/VIII/2013 is the government entity responsible for implementing government policies and integrated investment management in the water and sanitation sector, as well as strategic planning,

26 Government of Cabo Verde, Government Programme for 2016-2021 27 Government of Cabo Verde, PEDS, 2017 28 Government of Cabo Verde, PAGIRE, 2010, http://extwprlegs1.fao.org/docs/pdf/cvi119727.pdf 29 Government of Cabo Verde, UNFCCC, INDC, http://www4.unfccc.int/submissions/INDC/Published%20Documents/Cabo%20Verde/1/Cabo_Verde_INDC_.pdf 30 CAS, Legislative Decree n.3/2015 from the 19 of October, http://extwprlegs1.fao.org/docs/pdf/cvi149045.pdf 15

monitoring, technical regulation, supervision and monitoring of production services, distribution and commercialization of water, collection, treatment and rejection of liquid effluents and waste throughout the national territory; and • National Environment Directorate (DGA) which has transversal environmental regulation functions.31 Nevertheless, the above policies and regulations historically have been developed rather independently from each other (energy, and water) and thus lack a cross-cutting approach leading to integrated solutions. This has been/is even further reasoned in the geographic and regionally fragmented landscape of the Cabo Verde islands. The rising need of energy – in general as well as in particular in water production and distribution – and the need to transform the energy landscape towards a low emission economy requires the creation of platform for continuos dialogue (bringing relevant stakeholders together) with the aim to develop, suggest and promote the market-based integration of water-energy (and land/food) approaches into the listed national policies and regulations. This will also stipulate the participation and integration of the private sector – through the ESCO approach – in the process. In that respect the project will develop/establish the policy and institutional framework conducive to the promotion of the enrgy- water nexus approach and the creation of Energy Service Companies (ESCOs). Associated baseline projects at national level: The following are some of the projects being implemented at national level: • Directorate General for Agriculture, Forestry and Livestock (DGASP) has been executing several projects relative to the water mobilization far from the national grid and some of them are still running on diesel or are unusable. In addition, the high requirement of electricity for pumping has been impacting the water production costs, especially in diesel based and very deep boreholes. In 2015 more than 20 boreholes were identified to be a priority for water mobilization or for the reduction of their associated water pumping costs. In line with DGASP initiatives, integrated sustainable energy-water projects can be experimented and would be beneficial. • United Nations Development Programme (UNDP) has several programs or initiatives on the energy-water sectors. In 2017, it implemented photovoltaic systems in four water stations to reduce the cost of water for agriculture in Santiago and Santo Antão Island. • Lux-Dev is implementing the program CV/082 for water and sanitation in which solar PV systems were installed on three water stations in Fogo Island (Genebra, Alvito and Benecha) as well as under which the FASA fund is being developed. The CV/083 is implemented to improve the regulatory framework and funds mobilization to deploy RE projects in the country. • Wind power project for Santiago, Sao Vicente, Sal and Boavista by Cabeolica: Cabeolica S.A. is the first commercial-scale, privately financed, public-private partnership (PPP) wind farm in sub-Saharan Africa. The PPP is held between the Government of Cabo Verde, ELECTRA and InfraCo, a publicly financed privately managed project development company. In 2011, Cabeólica installed 25.5 MW of wind energy in the four main electrical grids (Santiago - 9.35 MW; Sao Vicente - 5.95 MW; Sal - 7.65 MW; Boavista - 2.55 MW) which collectively produce up to 100GWh/yr. The project will analyse this successful PPP and adapt it for the promotion of public private investment to accelerate the deployment of energy-water nexus initiatives. • Solar photovoltaic project for Santiago and Sal by the Government of Cabo Verde: In 2010, the Government of Cabo Verde installed two solar PV plants. The first one occupies an area of 9.75 hectares and supplies 2.5 MW of peak power with a capacity of expansion up to 5MWp in the island of Sal. The second and biggest one occupies an area of 13 hectares and has 5 MW peak power in the island of Santiago. The two PV parks are now responsible for the production of 4% of the energy consumed in the country. Furthermore, they have reduced 13,000 tons of CO2 emission per year and have saved at least 2.6 thousand tons of imported oil. The solar PV plants were financed through a Portuguese credit fund for RE to Cabo Verde in the total value of 100 million Euros. The project will analyze this funding mechanism which could potentially be used/adapted to accelerate the deployment of energy-water nexus initiatives. • ISLHáGUA project by European Regional Development Fund (ERDF): From 2010 to 2016, the ISLHáGUA project was financed and carried out by the ERDF, the Technological Institute of the Canary Islands (ITC), the Southeast Commonwealth of Gran Canaria, the National Municipality Associations, National Water Resource Management Institute and the Cabo Verde University. Its main objectives were to promote awareness on the sustainable use of drinking water, to reinforce the existing capacities on water quality and to encourage the use of RE on waste water treatment and sea water desalination. As part of the project, a feasibility study was conducted at Espinho Branco in Santiago to install a solar PV desalination plant serving as an example for other localities with similar characteristics. This GEF project will consider the feasibility study conducted at Espinho Blanco as part of the overall scaling up efforts supporting the widespread integration of RE in water resources management.

31 Suarez Bosa, Miguel (2015) Water Institutions and Management in Cabo Verde. 16

Besides, an introductory online course was developed to train university students on the adoption of RE in water desalination plants which was completed by 50 students from Cabo Verde. This project will build on ISLHáGUA's online course to develop a more institutionalized national capacity in the field of RE for water resources management. • Water, Sanitation, and Hygiene Project (WASH Project) by Millennium Challenge Corporation (MCC): In 2012, MCC and the Government of Cabo Verde started the WASH project which is expected to finish at the end of 2017. The project aims to establish a financially sound, transparent and accountable institutional basis for the delivery of water and sanitation services to Cabo Verdean households and businesses. WASH's approach to improving sector performance is based on a three-pronged strategy: reform national policy and utility regulators, transform inefficient utilities into independent corporate entities operating on a commercial basis, and improve the quality and reach of water and sanitation infrastructure. This project will consider the results obtained on the water national policy to develop sound recommendations on the integration of the energy-water nexus approach. • Centre of Renewable Energy and Industrial Maintenance (CERMI) by Lux-Development: In 2015, CERMI was inaugurated to contribute to the improvement of educational provision in Cabo Verde with the specific objective of creating training that meet the needs of the labour market. In the energy sector, it builds capacity on EE as well as on different RE technologies such as solar thermal, photovoltaic, and wind. This project will take advantage of the state of the art training facilities to support the ongoing capacity building efforts by strengthening the technical knowledge of CERMI's trainers and expanding the offered curricula. Associated baseline projects at regional level: • ECOWAS Regional Centre for Renewable Energy and Energy Efficiency (ECREEE) by UNIDO and the Austrian and Spanish Governments: In 2010, the ECOWAS countries decided to establish ECREEE –a unique regional agency in sub-Sahara Africa– to improve the access to modern, reliable and affordable energy services and to accelerate the uptake of renewable and energy efficiency technologies. ECREEE's activities include policy development, capacity building, awareness raising, knowledge management as well as business and investment promotion. The project will build on ECREEE's regional expertise in capacity building and policy development to build national capacity for the integration of RE in water resources management. • ECOWAS Renewable Energy Facility (EREF) by UNIDO, GEF and the Austrian and Spanish Governments: EREF is a multi-donor grant facility managed by the ECREEE Secretariat based in Praia, Cabo Verde. It undertakes regular calls for proposals to provide grant co-funding for small to medium sized RE and EE projects and businesses in rural and peri-urban areas. The Facility is open to contributions from other donors to support calls for proposals. During its first phase of operation (2011 to 2016), EREF tested and improved its funding policy to find its comparative advantage in the West African market. In the second phase (2016 to 2020), EREF will broaden its portfolio of financial instruments and support schemes (e.g. micro credits). EREF has provided grant co-funding for small to medium sized RE and EE projects and businesses in rural and peri-urban areas on the regular basis. Under this project Cabo Verde has benefited from the implementation of four mini-grid systems (Figueiras, Reibeira Alta, Cariçal e Planalto Norte), a PV plant for a water pumping station in São Nicolau and a solar plant for four boreholes in Tarrafal - Santiago. The GEF/UNIDO project will take into consideration EREF's co-funding policy in order to develop a national co-funding mechanism to support the widespread integration of renewables into water resources management. Furthermore, it will explore how Cabo Verde can take advantage of EREF's financial support to advance energy-water initiatives. • ECOWAS Renewable Energy Entrepreneurship Support Facility: ECOWAS Centre for Renewable Energy and Energy Efficiency partnered with IRENA, CERMI, 2iE and Luxembourg Cooperation to create in April 2015 the ECOWAS Renewable Energy Entrepreneurship Support Facility. The Facility aims to provide support to ECOWAS- based entrepreneurs working in Renewable energy sector by training them and offering technical support in order to refine their projects and enable their RE business to prosper. To achieve its goals, the Facility organizes training workshops according to the needs identified. • IRENA/SIDS Lighthouses Initiative: The Small Islands Developing States (SIDS) Initiative, launched at the 2014 Climate Summit, is a supporting instrument for the development of a global framework for energy transition on islands. It aims (by 2020) to ensure that all participating islands develop renewable energy roadmaps, mobilise funds (US$ 500 million) and deploy renewable energy capacity of 120MW. Through this initiative coordinated support for islands is facilitated, aiming to transform their predominantly fossil-based power systems to renewable energy through partnerships with public, private, intergovernmental, and non-governmental stakeholder organisations. Small island thus gain access to policy and regulatory advisory services, technical expertise in planning, identifying, structuring and executing projects, financing for capacity building, policy and regulatory design, early-stage transactions, and project finance, and are part of a network to share information, knowledge and practices. • ECOWAS Programme on Gender Mainstreaming in Energy Access32: this is another flagship programme being implemented by ECREEE with the objective to meet the SEforALL goals in West Africa. Established against the

32 http://ecowgen.ecreee.org 17

background that energy access, or the lack of it, affects men and women differently, and that the energy needs of both men and women sometimes differ, this programme aims to factor in these differing needs in the planning and execution of clean-energy related interventions in the region to ensure a universal access to energy services. • Word Bank is developing a regional project together with ECREEE which aims to financing the implementation of standalone systems, as well as improve the enabling environment for financing RE technologies. • Lux-Dev has just started a regional program “Anchorage of CERMI to ECOWAS” in which support is being provided to CERMI to train trainers in the ECOWAS on RE and EE. Under this programme, the trainers from the region come to CERMI in Praia to receive training. The capacity building components of the GEF/UNIDO project will be developed taking in consideration and in partnership with this project. This GEF/UNIDO project will coordinate and build upon the finding and lessons learnt from on-going projects and already implemented projects as well as fill in the gaps left from those. For example, it will: • Increase cooperation amongst on-going and new projects and programmes that target energy-water nexus system through building a platform for discussions amongst stakeholders of sustainable energy-water nexus issues and articulation and promoting cooperation between on-going and new initiatives on the area as well as identify and provide technical assistance and inform stakeholders and the public in general on those. • On the legal and regulatory framework this GEF/UNIDO will cooperate and contribute to fill in the gaps of on-going projects, such as Lux Dev and the GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde”, by analysing and proposing recommendations to address energy-water nexus projects in an integrated way, as although the two sector are intrinsically connected, the projects have been and are approached or from the energy or water sector perspective instead of being analysed on an integrated way; • Will promote the inclusion of gender into the policies and regulations that will be developed as well as make recommendation on how to include it on already existing ones. This will be done with ICIEG and cooperation with UN Women, filling in the gaps that exist in terms on how gender issues are addressed in the energy sector, as for the water sector gender issues are already analysed and to a certain point addressed; • Make use of the lessons learnt and project pipeline identified during the implementation of the GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde” in which RE projects have been implemented for the mobilization of water resources (PV for water pumping); it will replicate some of the PV solutions installed for water pumping and desalination as well as demonstrate the feasibility and commercial viability of other RE technologies (such as wind and ocean energy) to be used on desalination systems; it will contribute to continue to build a curriculum for CERMI, expanding the already existing programmes on RE and EE to the application of such technologies to water resource management activities as well as starting programmes on entrepreneurships and ESCOs. This GEF/UNIDO project will continue the good work that has been done on the GEF 4 project, but now with a expanded and more targeted scope – development not only of RE but also of EE projects associated with water management systems; • Will cooperate with the FASA (established through a Lux Dev project), the EREF, GEF-SGP project, Pro-Empresa and financial institutions in the establishment and implementation of the financial mechanism for the sustainable energy- water nexus investment projects. The project will ensure articulation between different financial mechanisms operating in the energy and water sector, thus making use of economies of scale through an integrated approach as well as promoting its application and dissemination of information on those. • Contribute to the achievement of CERMI’s targets and work in cooperation with several on-going programmes in the establishment and delivery of the capacity building project component (PC3) such as the Lux-Dev regional programme “Anchorage of CERMI to ECOWAS”, the ECOWAS Renewable Energy Entrepreneurship Support Facility, ECREEE, between others. This will complement the work that has been carried out in CERMI and expand its curriculum.

3) THE PROPOSED ALTERNATIVE SCENARIO, GEF FOCAL AREA33 STRATEGIES, WITH A BRIEF DESCRIPTION OF EXPECTED OUTCOMES AND COMPONENTS OF THE PROJECT The proposed alternative scenario is to carry out a series of components and activities that will lead to the market-based integration of RE and EE technologies in water resource management systems, with a particular focus on water pumping systems in rural areas and water desalination plants in urban centres throughout the country. Under the baseline scenario, the barriers would not be adequately addressed providing a rationale for GEF involvement. The GEF financing will provide the necessary catalytic support to create and sustain an environment that is conducive to promoting investments and adopting appropriate RE and EE technologies for water resource management system contributing to climate change mitigation and associated environmental and socio-economic benefits to Cabo Verde.

33 For biodiversity projects, in addition to explaining the project’s consistency with the biodiversity focal area strategy, objectives and programs, please also describe which Aichi Target(s) the project will directly contribute to achieving.. 18

The proposed project is aligned with the GEF Program 1 of the focal area CC1 -Promote Innovation, Technology Transfer, and Supportive Policies and Strategies as it aims to promote integrated systems EE and RE (such as solar PV, wind and ocean energy) systems for energy generation displacing the use of carbon-intensive fuels (e.g. diesel generators), thus contributing to the reduction of GHG emissions and benefiting the development of a low-emission development path. In order to reach the project’s objective, four project components (PC) are proposed: Project Component 1 (PC1): Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) Project Component 2 (PC2): Build capacity to support the market integration of RE and EE technologies in water resources management Project Component 3 (PC3): Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems Project Component 4 (PC4): Monitoring and evaluation

FIGURE 2: PROJECT COMPONENTS

Project Component 1: Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) In Cabo Verde, the current energy and water decision-making landscape is complex, regionally fragmented and has been historically developed independently from one another using different approaches in policy frameworks and objectives. With the rising importance of energy in water production and distribution, there is a growing need for a cross-cutting approach to develop integrated policies. Therefore, the objective of PC1 is to create a platform for continual dialogue among relevant stakeholders to promote market-based integration of the energy-water nexus approach in relevant national policies and regulations and promote private sector participation on it. The activities to be undertaken under PC1 are intended to adjust the policy and institutional framework in order to promote energy-water nexus approach and the involvement of the private sector. The recommendations developed within PC1, and in particular related to output 1.1.3, will be lead by a macro-economic view and thus be equal beneficial to both, the public as well as the private sector . Those activities are framed under each expected output of the Project. Output 1.1.1. National platform to discuss synergies between sustainable energy systems and water resource management established Activity 1.1.1.1 Establishment of a Nexus Platform The analysis conducted to identify the existing gaps and barriers in the policy and regulatory framework for the promotion of energy-water management nexus approach is relevant to understand what needs to be improved, modified or created in terms of policies and regulations to guarantee that a sustainable integrated approach is adopted in Cabo Verde and that the private sector is actively involved. For that, a Nexus Platform with representatives of the public/ private energy and water sectors will be created. It is envisaged that this Nexus Platform will meet on a regular basis and that it will bring together the following institutions: MEE/DNEIC/DSE, MAA/DNA, MAA/DGASP, ANAS, ARE, ICIEG. The platform will be hosted and coordinated by the MEE/DNEIC/DSE. Depending on the issues to be discussed and analysed, other stakeholders could be invited on an ad hoc basis to attend to the meeting, such as financial institutions, NGO, CSOs etc. Furthermore, the platform will also invite representatives of the direct recepients of the demonstration and scaling-up activities (such as farmers) and thus benefit from and guided by the experiences made and lessons learned. The Nexus Platform will coordinate and support the following activities:

o Conduct detailed analysis on the gaps and synergies between the energy and water sectors and the ongoing projects/initiates in order to provide recommendations on how to promote better coordination and a joint approach to energy-water nexus projects/initiatives on an integrated manner (Activity 1.1.1.3) o Provide technical assistance (TA) services that include (Activity 1.1.1.4): . Identification of the lessons learnt from the implementation of Energy-Water Nexus projects (“Best” and “Bad” Practices) . Development of guidelines on how to integrate clean energy (RE and EE) in water resource management systems . Estimation of cost benefits and other benefits from the adoption of RE and EE in water resource management initiatives/ projects when compared to traditional energy sources . Provision of ah-doc advisory services on how best to integrate RE and EE into energy-water nexus projects o Discuss and contribute towards the definition of a financial mechanism for sustainable energy-water projects (Output 3.1.1 Activity 3.1.1.1); o Encourage the adoption of gender dimension into energy-water initiatives (Output 1.1.2) o Discuss and analyse recommendations on how to improve policy and regulatory environment to promote ESCOs approach in sustainable energy-water resource management projects (Output 1.1.3) A strong coordination effort will be needed in order to organise and guide the Nexus Platform work towards the final goal of improving the policy and regulatory environment. With this in mind, establishing and improving mechanisms for synergy building, information sharing, shared awareness and advocacy is advisable. Regular meetings among Nexus Platform members could be scheduled having in mind the following suggestions:

o Each participating institution/entity should select a representative person to attend the Nexus Platform meetings as well as one or two replacements if the person cannot attend. o The Nexus Platform host (MEE/DNEIC/DSE) supported by the Project Management Unit (PMU) will be responsible for scheduling meetings and informing members about upcoming dates. o The Nexus Platform work should be coordinated by MEE/DNEIC/DSE. During the meetings, relevant activities and tasks should be identified and assigned to the corresponding members (entities), indicating objectives, critical path activities, milestones and deadlines to be fulfilled. The results should be discussed in the following meeting to identify any possible delays, hurdles or changes. o Meeting minutes should be drafted and circulated each time the Nexus Platform meets. This is useful to avoid future misunderstandings on allocated responsibilities. 20

o Create a digital sharing and storage tool within the project’s Website to which members can have access to (with a specific login function). o Create a communication protocol to be followed by Nexus Platform members. o Share the outcomes/actions of the Nexus Platform with the public through the Website (Activity 1.1.1.2) o Apply best practices in good governance to ensure intended outcomes are achieved. The function of good governance in the public sector is to ensure that entities act in the public interest at all times. o Women in member institutions and entities will be encouraged to participate in it, in order to promote equal opportunities.

It is envisaged that through the joint participation and discussions carried out under this activity, the national ownership will be strengthened on the integration of energy-water nexus into policy and regulatory frameworks. As the establishment/improvement of policy and regulatory framework will be an activity carried out throughout the entire project, the Nexus Platform will meet 2 times a year during the GEF/UNIDO project. These meetings will be half-day working meetings where the PMU will be invited to present results of the Activities 1.1.1.2 to 1.1.1.4 and the results of the activities of Outputs 1.1.2, 1.1.3, 3.1.1 and others that may contribute directly and indirectly to the improvement of the legal and regulatory framework in place) as well as to share the experience of implementing the policies and frameworks developed throughout the project. This will allow the project to adapt the developed and improved policies to the changing environment. The Nexus Platform will be a national entity representing the forum for the above mentioned stakeholders – from government and private sector – to address the integration of energy-water nexus approaches into policy and regulatory frameworks of Cabo Verde, both during as well as after the project. MEE/DNEIC/DSE as it’s host will be the owner of the platform and the related website (see Activity 1.1.1.2) and thus responsible for coordination and sustainability.

Activity 1.1.1.2. Establishment of a Website This activity will result in the creation of a Website that will serve the following functions: (1) Raise awareness among the general public on sustainable energy-water nexus initiatives by providing information on: a. the energy and water sectors; b. energy-water nexus approach; c. advantages of using sustainable energy for water resource management projects and /initiatives; (2) Share with the general public information about: a. the GEF/UNIDO project implementation status, on-going/planned activities, activities result and lessons learnt from GEF/UNIDO project implementation; b. other on-going and synergetic country initiatives; (3) Serve as a communication tool for project developers to submit their project ideas/concepts and request technical assistance in identifying/defining the most suitable clean energy options to be adopted. (4) Advertise available financial options and other incentives for sustainable energy-water nexus projects (5) List and provide contacts of energy service companies (ESCO) in the country that provide services that can support the development/management / maintenance of sustainable energy-water project/initiatives. This website will be allocated in the Energy Sector Platform/DSE platform (which is currently being development) and will be linked to MEE and MAA existing platforms. The design of the website will be done by a National IT Consultant and the maintenance and the updating of the platform content/information will be carried out during the project as a joint task of the PMU, an appointed technician from the MEE/DNEIC/DSE and a National IT Consultant on ad hoc basis.

Activity 1.1.1.3. Recommendations on how to promote better coordination and a joint approach to energy-water nexus projects/initiatives on an integrated manner This activity will result in the definition of a joint approach to energy-water nexus projects/initiatives together with a set of recommendation on how to improve the legal and regulatory environment to allow/facilitate the adoption of the approach. For that a detailed gap/opportunity analysis will be carried out that include: • analysis of current regulations and legal framework of both energy and water sectors will be carried out so to identify existing gaps and barriers that should be address in order to facilitate the adoption of a joint approach as well as synergetic opportunities between both sectors. • review of the institutional framework of both sectors will be carried out in order to assess what would be the best communication procedure for energy-water nexus initiatives/ensure better coordination between the energy – water sectors; • review of the on-going initiatives in Cabo Verde, to assess how those can be articulated with each other and should be used to ensure that there is no duplication of efforts to address the same issues. Having in mind the results of the referred gap/opportunity analysis, a set of recommendations on how to improve the legal and regulatory frameworks to allow the adoption of a joint approach to energy-water nexus projects/initiatives as well as the approach 21 on how that should be carried out will be outlined in a Report. This report will be presented to the Nexus Platform in one of their meeting for discussion, which will then decide how and when (in the short, medium or long-term) the proposed recommendations should be implemented/adopted. This activity will be done through a subcontract of consultancy services focused on legal and policy/regulatory aspects. From the analysis carried out so far, there is a need to improve the policy and regulatory framework to address energy-water nexus projects/initiative in an integrated manner as these two sectors are interrelated and depend on each other. Some of the topics that should be addressed are the following: • Revise the legislation to open the market/creation of incentive mechanism for the establishment and development of ESCOs. • Revise the legislation in order to ensure that for energy-water nexus project a synergetic and integrated approach is adopted.

It is foreseen that a first gap/opportunity analysis will be carried out during the first year of the project and will be presented to the Nexus Platform. The Nexus Platform and the consultants will then discuss the needs and agree on a strategy to start developing the necessary policy documents as well as discuss and decide what measures and actions would be the most appropriate ones to be included on the documents to be developed and approach to be implemented. These will be presented at a first stakeholder’s workshop (Activity 1.1.1.5) to collect their feedback before going ahead with their implementation. Besides, a yearly update of the analysis is envisioned to be developed and presented to the Nexus Platform. This will enable a continuous improvement of the policy and regulatory framework throughout the course of the project. The activity also foresees to incorporate and update the recommendations by taking into consideration the experiences/lessons learned from the implementation of project component 3. Respective resources are therefore foreseen towards the end of the project (Annex E ‘Annual allocation’ and Annex F ‘Work plan’).

Activity 1.1.1.4. Provision of Technical Assistance (TA) services to foster the adoption of sustainable energy-water nexus projects/initiatives This activity will result in the provision of TA services that aim to foster the adoption of sustainable energy-water nexus projects/initiatives. It is envisaged that the following TA services will be provided: • Identification of lessons learnt through the implementation of Energy-Water Nexus projects (“Best” and “Bad” Practices) • Development of guidelines on how to integrate clean energy (RE and EE) in water resource management systems; • Estimation of socioeconomic and environmental benefits from the adoption of RE and EE in water resource management initiatives/ projects when compared to traditional energy sources; • Provision of ah-doc advisory services on how best to integrate RE and EE into energy-water nexus projects • Provision of other TA services identified by the Nexus Platform During the stakeholder’s consultations, the lack of awareness and information on how clean energy could be integrated in water resource management projects and the benefits of its integration were refereed by the stakeholders as an important issue that should be addressed by the GEF/UNIDO project. Raising awareness on how clean energy should be integrated and used in water resource management projects/initiative and its benefits will ensure that: (i) clean energy is considered in the water resource management; (ii) that the implemented projects are well managed and run efficiently and according to the current/future needs and potential for which they were implemented; (iii) that all project developers are aware of the environmental and economic benefits on the long term of the adoption of RE and EE technologies when compared to traditional fossil fuel ones. Furthermore, it was refereed that as there are some energy-water nexus projects already implemented in Cabo Verde, that those should be analysed in order to identify “Best” and “Bad” practices on identification/design, implementation and management/maintenance of these projects and thus compile lessons learns from it. The Guidelines on how to integrate clean energy (RE and EE) in water resource management systems will be developed to provide guidance and advise on: • The importance of RE and EE in water resource management (water production, water extraction, wastewater treatment etc), with a strong emphasis on water desalinization and water pumping activities; • How EE measures should be incorporated in water resource management and the importance of reducing energy demand from water management projects/activities; • How RE can be used for powering water project; • What to considered when dimensioning EE measures and RE systems for water resource management activities; • Importance of good management and maintenance of clean energy-water nexus systems; • How the gender dimension should be included in clean energy-water nexus initiatives (based on the findings of Output 1.1.2); • Lessons learnt from using the implementation of clean energy-water projects/initiatives in Africa, SIDS and Cabo Verde.

The Benefit Analysis, will have a strong focus on the economic benefit / savings achieved / impact on water cost of the adoption of RE and EE in water management systems as well as indication of other benefits achieved. Thus, it will include: • Overview of the main benefits (environmental, gender, etc) from the adoption of RE and EE instead of fossil fuel energy solutions for water resource management projects; • Assessment for the different type of water projects of the impact on the cost of water/water production costs from the use of RE and the adoption of EE when compared to traditional fossil fuel-based energy source solutions; • Impact on the agriculture products (impact on cost of production of agriculture products) from the adoption of RE and EE instead of fossil fuel-based energy solutions for water pumping and water production. This Benefit Analysis report was referred by Cabo Verde stakeholders as of extreme importance for the demonstration of the economic benefits of the adoption of clean energy solutions on water management systems, as it does not exist and Cabo Verde is the country with the highest cost of water in the Sub-Saharan Africa, of which a big part of it can be directly associated to the energy needed for its production. From the analysis carried out at the PPG, Cabo Verde has already some experience in implementing EE measures and RE systems in water resource management projects. Under the GEF 4 project some sustainable energy-water projects have been implemented: (i) Praia-Branca 11,5 kWp PV system implemented in 2015; (ii) PV system for 4 water pumping station in Tarrafal Santiago (76 kWp under implementation by MAA and DSE). Lux Dev developed a project in Fogo Island (in Genebra and Avilto). The experience on the implementation of these projects will be used for the compilation of both the Guidelines as well as the Benefit Analysis report. The information will be complemented by other project examples and experience in the Sub-Saharan Africa and in Small Island Development States (SIDS). The Guidelines and the Benefit Analysis Report will be compiled and released twice during the project implementation: at the beginning and at the end of the project. The version at the end will expand the first version by adding the projects / project experience / lessons learnt from the implementation of energy-water nexus investment projects under GEF/UNIDO PC3. This report will be compiled by National and International Consultants with guidance from the PMU and presented at the Policy and Regulatory Framework Workshops (Activity 1.1.1.5). The provision of Ad-doc Advisory Services and other TA services will be provided upon request on the Website to the project ideas/concepts submitted. The Nexus Platform in its meetings will decide which projects and what type of TA should be provided and assign the TA to International / National Consultants and/or the PMU as it sees fit. It is envisaged that at least 6 Ah-doc Advisory Services will be provided during the project implementation. International and National Consultants and the PMU will be responsible for the provision of the Ad-doc Advisory Services. Feedback on the number of Ah-doc Advisory Services, type of services that have been provided and results achieved will also be reported at the Policy and Regulatory Framework Workshops (Activity 1.1.1.5). Moreover, staff of the platform host (MEE/DNEIC/DSE) as well as from other correlated institutions will be trained during the project to identify and follow up needed TA so that when the project comes to an end these services can still be identified and carried out whenever necessary (Training Programme (1): Energy Expert Training). Activity 1.1.1.5. Policy and Regulatory Framework Workshops and Reporting The objective of this activity is to carry out a at least two (2) Workshops to discuss amongst the Nexus Platform and other involved stakeholders and to present the Nexus Platform’s proposals on what should be improved in terms of policy and regulations as well as the approach to be adopted to ensure integration of both energy and water sectors. The main goal is to discuss possible options and approaches to “fill in the gaps / make use of opportunities” to surpass the policy, legal and regulatory barriers that were found from Activity 1.1.1.3 and activities carried out under Outputs 1.1.2 and 1.1.3. Besides, it seeks to improve the institutional framework to address energy-water nexus issues in an integrated way attracting the private sector to get involved in providing clean energy solutions to water resource management activities. It is envisaged that the following organisations and stakeholders participate in the workshop: • The Nexus Platform members (MEE/DNEIC/DSE, MAA/DNA, MAA/DGASP, ANAS, ARE), created in Activity 1.1.1.1 • Other government representatives (Ministry of Education, Ministry of Health) • UNIDO and the appointed PMU • Local financial institutions (public and/or private) • Local decision-makers in the field of regulations and policies • Other government representatives • Private Sector and Private Sector Associations • Other strategic partners and stakeholders (public and/or private) Conclusions from Activity 1.1.1.5 and 1.1.1.2 will be inserted in a series of Reports (namely 2), which will include recommendations about the potential revisions or additions that are needed for the enhancement of the current policy and regulatory framework. For example, this may entail the development of new regulations and policies focused on specific activities, technologies, sectors, tariffs, PPAs models, etc. The Report will also be complemented by the results obtained from 23

Activity 1.1.2.1 “Consultation to private sector actors” since its conclusions may have an impact on the policies and regulations and therefore, should be taken into consideration in this Activity. Moreover, at these workshops the results of Activity 1.1.1.4 will be presented and feedback on it will be collected. The International Consultant and National Consultant involved in Activity 1.1.1.3 and 1.1.1.4 as well as in the activities of Outputs 1.1.2 and 1.1.3 are expected to support the PMU to successfully conduct the Workshops. It is envisioned that these workshops will be a half-day workshop each with around 50 participants and that at least two (2) workshops will be carried out throughout the project execution.

Output 1.1.2. Recommendations on how to integrate the gender dimension into energy-water initiatives prepared and presented to decision makers Activity 1.1.2.1 Assessment of how RE and EE initiatives in water resource management systems impact gender roles Traditionally, women have been responsible for the provision of water which is collected from boreholes far from their homes and transported on their heads risking health problems due to the heavy load. This is particularly relevant in rural areas where women and children have to walk several km to collect water and bring it to their homes. In the peripheral area the situation is similar, the women are still the most affected ones by the lack of water network access, having to go in early morning/afternoon to the fountain or neighbour houses to buy the water sometimes 5 times more expensive than the national tariff. The price of energy was identified by ANAS (2014) as one of the reasons for the low households’ water connection as the cost of energy represent in Cabo Verde sometimes more than 70% of total cost. As such, the lack of sustainable energy for pumping water facilities or desalinization water has been indirectly affecting women. Therefore, using the sustainable energy on the pumping water facilities and/or desalination plants in Cabo Verde will contribute a lot to increase the access to water and in reducing the price for different social groups. Although there is statistical information on the gender issues in the water sector, the same cannot be said for the energy sector or for the RE and EE subsectors. Therefore, an assessment on the mutual interlinkages of RE, EE, water resource management and gender roles will be compiled. This will be carried out by a national consultant that will: • use information available in the country to compile a baseline analysis on the traditional gender roles and the impacts that it has for women and the Cabo Verdean families; • If possible, carry out a consultative process with focus group meetings to understand first hand the gender roles in different social segments; • analyse projects already completed/under implementation that use RE and EE in water management systems to identify impacts that the use of these technologies may have on the traditional gender roles; • analyse impacts of similar projects from other Sub-Saharan countries and SIDS; • identify how projects have addressed and integrated gender issues so far and results achieved from that. This assessment will be carried out at the start of the project and will be updated at the end considering the impact of the gender recommendations in the project and in the policy, in general. This activity will be carried out by a national consultant with guidance and inputs from ICIEG and UN Women and its results will inform the compilation of the recommendation (Activity 1.1.2.2) on how to integrate the gender dimension into energy-water initiatives. Moreover, the results of the assessment will be presented at two of the Policy and Regulatory Policy Workshops (Activity 1.1.1.5): at the beginning to present the findings of the first report and at the end to present the updated findings of the assessment. Activity 1.1.2.2 Recommendations on how to integrate the gender dimension into energy-water initiatives Having the results of Activity 1.1.2.1 in mind, a set of recommendations on how the gender dimension should be integrated into energy-water initiatives will be compiled. The integration of RE and EE solutions for water resources management will be taken as a case study to analyse how to better integrate gender dimensions into the planning and management of energy-water initiatives. By integrating gender dimensions into the management and planning of the energy-water nexus from initial stages, the project can impact the traditional gender roles promoting women empowerment. A set of recommendations will be developed at the beginning of the project. Additionally at the end of the project, the first set of recommendations will be revised according to the experience in integrating the gender dimension on the energy-water nexus projects under GEF/UNIDO PC3 as well as the lessons learnt from the adoption of the recommendation done at the start of the project. The recommendations will also be included in the Guidelines on the integration of RE and EE in water management system and the Benefit Analysis developed under Activity 1.1.1.4. This activity will be carried out by a national consultant together with ICIEG and UN Women and the results of it presented (i) to the Nexus Platform in one of their meeting and (ii) to other policy makers and national stakeholders in the Policy and Regulatory Policy Workshops (Activity 1.1.1.5). As the recommendations were developed with the guidance from the Nexus Platform it is expected that they will be adopted due to the high level of ownership resulting from an effective collaboration and participatory approach fostered by the national Nexus Platform established under Activity 1.1.1.1.

Output 1.1.3. Recommendations on how to improve the policy and regulatory environment to promote ESCOs approach in sustainable energy-water resource management projects developed and presented to decision makers Activity 1.1.3.1. Gap analysis for the development an inclusion of ESCO In this activity, the legal and regulatory framework for the establishment of ESCO’s will be revised and gaps will be identified. ESCOs are market-based financing instruments providing a broad range of services, including design and implementation of energy savings projects, retrofitting, energy conservation, energy infrastructure outsourcing, co-finance, power generation and

25 energy supply, and risk management. ESCOs remuneration is performance based which means that the payment is done for measured output as opposed to the inputs consumed. Moreover, it guarantees for the outcome of all-inclusive cost of the service package; in other words, the ESCOs take over the commercial, technical and operational risks over the project term. The creation of ESCOs is a strategic priority for Cabo Verde's and is referred in the National Energy Efficiency Action Plan (NEEAP), in the National Renewable Energy Action Plan (NREAP), in the SE4ALL Action Agenda and in the INDC. • The NEEAP states that one of the Government strategic priorities is to promote the incremental involvement of the private sector (companies and families) to progressively replace public investment in the RE and EE sector. Within this the Government: (i) assumes the role as project developer, promoter and regulator of a dynamic, innovative and efficient energy production and supply market, creating the conditions for private investment to replace public investment in the transformation of the energy sector; and (ii) acts as facilitator and catalyst in the search for innovative solutions for financing the energy market, which do not constitute direct support or subsidies. As such, the promotion of ESCOs for the EE market is envisaged to be built upon strong public-private cooperation. 34 • The NREAP refers to ESCOs as a mean to promote the RE market, particularly associated with auto production of energy including the local energy production associated with a final consumption point (i.e. photovoltaic microgeneration and the production of solar hot water). • The INDC clearly seeks to built-up of a comprehensive network of energy services ESCOs and clean-energy business incubators as mitigation activities. 35 From the analysis carried out so far, the following main barriers for the creation/operation of ESCOs have been identified: • There is no legal framework that allows, incentivizes, promotes and supports the creation of ESCOs to provide all type of services from project identification, generation and supply of energy and management and maintenance of systems. The policy in place does not allow ESCOs to provide energy generation / supply services as Independent Power Producers (IPP) since all energy generated needs to be sold to ELECTRA, the national utility. Nonetheless, ESCOs can be created to supply other services, such as project management and maintenance services. • There are no incentives to promote the establishment of ESCOs and/or financing of ESCOs activities. At the moment, as a result of the NEEAP and NREAP there is a Draft Decree-Law waiting to be adopted that establishes the legal framework applied to ESCOs for auto producers. The Draft Decree-Law: • establishes the conditions for the development of an ESCO market, highly specialized and valued by the different actors in the market. • establishes the legal regime applicable to ESCOs, regulating the access and exercise of the activity. • defines the general guidelines for the elaboration of the Energy Performance Contracts (EPC) and the Energy Sustainability Plans (ESP); and • provides for the creation of the Energy Services Management System (ESMS). 36 Nevertheless, the Draft Decree-Law does not include specific incentives to promote the establishment and / or financing of ESCOs so far. The gap analysis will also include: • Analysis of RE/EE and Water service providers openness to ESCOs services: RE/EE and water service providers will be consulted to have an idea of their openness to engage and provide this type of services in the country as well as to analyse what barriers are preventing them to do so; • Look into companies in Cabo Verde that are providing/provided ESCOs type of services. Águas de Ponta Preta have implemented an ESCO model with Porto Novo Municipality (through the creation of the PPP, Águas de Porto Novo (APN, SA)) in which they have a contract of “take-or-pay” for the provision of 600m3/day of drinking water to the water distributor. Thus, APN SA needs to ensure the operation and maintenance of the desalination unit guaranteeing the agreed water supply.

The gap analysis will build on and expand the analysis already carried out in the Baseline Report. It will be carried out at the beginning of the project and updated towards the end. It will be conducted by a consultant and the results of it will be presented and discussed in one of the Nexus Platform meetings. The results of this activity will be the basis for the development of Activity 1.1.3.2.

34 Government of Cabo Verde, Projeto do Decreto-Lei que estabelece o regime jurídico aplicável às Empresas de Serviços Energéticos, 2015 and ECREEE/DGE (now DSE) Plano Nacional de Ação para a Eficiência Energética Período [2015-2020/2030] Cabo Verde 35 Government of Cabo Verde, Projeto do Decreto-Lei que estabelece o regime jurídico aplicável às Empresas de Serviços Energéticos, 2015 36 Government of Cabo Verde, Projeto do Decreto-Lei que estabelece o regime jurídico aplicável às Empresas de Serviços Energéticos, 2015 26

Activity 1.1.3.2. Recommendations on how to improve the policy and regulatory environment to promote ESCOs This activity will result in the development of policy and institutional recommendations on how to integrate the ESCOs approach into existing legislation with focus on energy-water nexus related services. The recommendations will be developed to address the gaps and barriers identified in Activity 1.1.3.1, discussed and agreed in the Nexus Platform established by Output 1.1.1. The recommendations will be developed at the start of the project and updated towards the end. The final version of the recommendations will include how recommendations have been implemented; lessons learnt and barriers faced, etc. This activity will be carried out by a consultant and will be presented (i) to the Nexus Platform in one of their meeting and (ii) to other policy makers and Cabo Verde stakeholders in the Policy and Regulatory Policy Workshops (Activity 1.1.1.5). As the recommendations were developed with guidance from the Nexus Platform it is expected that they will have a high chance to be adopted due to the high level of ownership resulting from an effective collaboration and participatory approach fostered by the national Nexus Platform established under Output 1.1.1. The following table summarises the outputs and activities of PC1. Project Component 1: Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) Outcome 1.1. Energy-water nexus and Energy Services Companies (ESCOs) approach integrated in relevant national policies and regulations PC1 seeks to enhance the policy and institutional framework to promote energy-water nexus approach and the involvement of the private sector Output 1.1.1. National platform to discuss synergies between sustainable energy system and water resource management established Planned and Envisioned Activities Responsibility Activity 1.1.1.1 Establishment of a Nexus Platform MEE/DNEIC/DSE, MAA/DNA, MAA/DGASP, ANAS, ARE Activity 1.1.1.2. Establishment of a Website PMU Activity 1.1.1.3. Recommendations on how to promote better PMU coordination and a joint approach to energy-water nexus Nexus Platform projects/initiatives on an integrated manner Activity 1.1.1.4. Provision of Technical Assistance (TA) PMU services to foster the adoption of sustainable energy-water Nexus Platform nexus projects/initiatives Activity 1.1.1.5. Policy and Regulatory Framework Workshops MEE/DNEIC/DSE, MAA/DGASP and Reporting PMU, UNIDO Output 1.1.2: Recommendations on how to integrate the gender dimension into energy-water initiatives prepared and presented to decision makers Planned and Envisioned Activities Responsibility Activity 1.1.2.1 Assessment of how RE and EE initiatives in ICIEG/ UN Women water resource management systems impact gender roles Activity 1.1.2.2 Recommendations on how to integrate the ICIEG/ UN Women gender dimension into energy-water initiatives Nexus Platform PMU Output 1.1.3: Recommendations on how to improve the policy and regulatory environment to promote ESCOs approach in sustainable energy-water resource management projects developed and presented to decision makers Planned and Envisioned Activities Responsibility Activity 1.1.3.1. Gap analysis for the development an inclusion Nexus Platform of ESCOs PMU Activity 1.1.3.2. Recommendations on how to improve the Nexus Platform policy and regulatory environment to promote ESCOs PMU

Project Component 2 (PC2): Build capacity to support the integration of RE and EE technologies in water resources management Cabo Verde has extensive experience with desalination and pumping systems as well as with RE and EE technologies. Nevertheless, there is limited awareness and technical knowledge on how to integrate RE and EE technologies in water management systems. Besides, the ESCOs market in the country is almost non-existent partly due to the insufficient awareness and technical knowledge on ESCOs operations and business development as well as the limited legal framework supporting/incentivising it. The Centre for Renewable Energy and Industrial Maintenance (CERMI) of Cabo Verde is a Corporate Public Entity whose vision is to be a “centre of excellence” in the field of RE and industrial maintenance at national, ECOWAS and the PALOP (“Países Africanos de Língua Oficial Portuguesa”, African countries with Portuguese as official language) level in the fields of training and certification of equipment and professionals, business incubation and R&D (Research and Development) 37 . CERMI was inaugurated in March 2015, and officially created by the Cabo Verde Decree-Law nº 29/201438. It was established to support the operationalization of the country's energy policy, to promote activities of public interest in the area of energy, and to serve as an interface with other sectoral policies.39 Table 1 summarises CERMI’s main strategic business axes and its sub-domains. TABLE 1: CERMI BUSINESS STRATEGY40 Main strategic business axes Strategic business sub-domains (1) Interventions in 1.1. Solar thermal systems covering the operationalization of laws, technical regulations and the area of standards, the certification of persons, companies and systems, the training of the technical energy community and knowledge dissemination; management and 1.2. RE production - (decentralized generation and micro-generation) focusing on the industrial operationalization of laws, regulations and technical regulations, certification of people, maintenance companies and systems, training of the technical community and dissemination of knowledge; 1.3. Comfort in buildings including the development of normative devices in collaboration with Institute for Quality Management and Intellectual Property (IGQPI), DSE and competent entities; operation of laws, technical norms and regulations; certification of people, systems and buildings; technical community training and knowledge dissemination; 1.4. Efficiency of equipment including certification, inspection of partnerships, development of incentive mechanisms in partnership with competent entities, training of the technical community and dissemination of knowledge. 1.5. Industrial maintenance covering training and certification of persons, knowledge dissemination, development of the technical normative framework for safety, quality and extended useful life of industrial systems and equipment. (2) Scientific and 2.1. Scientific and technological research for the development of prototypes covering research, technological laboratory testing, provision of services to third parties and scientific education programs; domain for 2.2. Networking and management of scientific knowledge including the development, research and implementation and management of the scientific and technological platform, the innovation development and management of the scientific and technological network, the promotion and participation in scientific and technological working groups, the organization and the organization of conferences, workshops, forums, fairs and exchanges, the publication of technical manuals and the publication and dissemination of articles, newsletters, magazines and scientific and technological works.

By 2020, CERMI aims at being a centre recognised at both national and regional level with political, technical and financial sustainability contributing to the overall sustainability of the environment and the quality of life through: • Mitigation of greenhouse gas (GHG) emissions and climate change; • Development and dissemination of technologies of greater efficiency of the use of resources; • The scientific community and attracting national and international strategic partners; • Greater dynamics in the sectoral market by acting on energy demand; • A better balance between demand and supply in the employment market. 41

37 http://www.governo.cv/index.php/rss/7484-governo-quer-que-cermi-seja-um-espaco-de-referencia-para-as-energias-renovaveis-fernando-elisio-freire 38 Government of Cabo Verde, Decree-Law n.29/2014, http://extwprlegs1.fao.org/docs/pdf/cvi134635.pdf 39 Programa Estratégico do CERMI, E.P.E 2015-2020 40 Programa Estratégico do CERMI, E.P.E 2015-2020 41 Programa Estratégico do CERMI, E.P.E 2015-2020 28

CERMI will undergo organizational learning and development to create readiness in its management system, infrastructure and human, material and financial resources. CERMI offers facilities for education, applied research and experimentation, seven training workshops, catering space and a resource centre of 4100 m2 with a capacity of 300 trainees. The Centre integrates different production technologies and RE storage: (i) on-grid PV of 117 kWp (ii) off-grid PV of 32 kWp connected to batteries, and (iii) two wind turbines (rated power of 6 kW and 1 kW). Also, the Centre is equipped with a climate control system based on an absorption chiller which allows cold production from the heat produced by solar collectors and a domestic solar water heater. CERMI’s building itself was built as a model of respect for the environment, EE, and cost efficiency in its construction and maintenance, taking into consideration the materials and equipment lifecycle and contributing to the reduction of global warming. As such, CERMI will actively contribute to the achievement of the GEF/UNIDO project by: • Enlarging its curriculum by having designed and implemented capacity building courses on: o Integration of RE and EE in water management systems; and o Entrepreneurship and development and management of ESCOs companies; • Building a national network of trainers able to provide these training courses in Cabo Verde, the ECOWAS and the PALOP. • Contributing to the development of a new market / business model of energy services in Cabo Verde. During the PPG phase discussions have been held with the different stakeholders regarding their views on the importance, needs and contents for the training courses to be developed and implemented under PC2. All stakeholders were in agreement that: (i) It is an added value to increase CERMI capabilities and training courses offered as well as to make use of the existing facilities. These services are not only important for the country but also for other ECOWAS and PALOP countries; thus, in line with CERMI business plan; (ii) Capacity building of the different institutions is key: it is important that the relevant stakeholders dealing with energy understand water issues and vice-versa to guarantee an integrated approach in their interventions. (iii) It is of extreme importance to build a critical mass of people that can install, operate and maintain these systems with the adequate technical knowhow so that energy-water nexus projects are sustainable in the long-run. In fact, it was stressed by several stakeholders that the training course should have a strong component on project maintenance and management as there are several energy-water pumping projects that fail or are inefficient due to poor design, implementation, management and maintenance of the system. A strong emphasis on hands-on training on maintenance and management will be beneficial not only for energy-water nexus projects but also for all RE and EE systems installed in the country. (iv) It is of extreme importance that the adequate qualified professionals are contracted by the project proponents to implement, maintain and manage energy-water nexus projects. In this view this component is critical, for the creation of qualified professionals and for raising awareness on this need. (v) It will contribute for the development of a service market that is required in the country, which will consequently be beneficial for the creation of jobs. Furthermore, Cabo Verde could become a service provider hub for other countries in the ECOWAS region and in the PALOP. (vi) It should target: a. Public sector institutions that promote/regulate energy-water management projects: institutions such as ANAS, ARE, DSE as well as other energy/water operators. b. Farmers / Municipalities managing energy-water nexus projects: in Cabo Verde agricultures and municipalities manage several water pumping projects. It has been reported by several stakeholders that there are a lot of water pumping projects that fail or are inefficient due to poor design, implementation, management and maintenance of the system. Thus, capacity should be built so that: i. projects are better designed and correctly implemented; ii. projects are better managed and maintained. c. Teachers: awareness and information should be provided to teachers so that they could integrate energy-water issues in the school’s curriculums. There was an initiative on how RE could be advantageous for delivering classes; unfortunately, it only happened once and it wasn’t integrated in the school’s curriculums. (vii) Training course should target different stakeholder’s groups and capacity needs as summarised in the Table 2. TABLE 2: IDENTIFIED CAPACITY NEEDS FROM DIFFERENT STAKEHOLDERS GROUPS Stakeholders Groups Capacity Needs Policy makers in the RE • Sustainable energy-water nexus projects and how RE and EE can be better integrated in and EE sectors and the water resource management projects. energy sector in general. • Key aspects to consider when integrating RE systems and EE measures in water resource management projects • ESCOs and possible ESCO models that can be adopted in Cabo Verde • Sustainable operation and maintenance aspects of energy-water nexus projects • Mainstreaming climate resilience and gender Policy makers from non- • Sustainable energy-water nexus project and how RE and EE can be better integrated in energy sectors like water resource management projects. agriculture, health, water, • How to look into energy for water projects 29 private sector, transport • How to integrate/look for energy/water nexus project components in other sectors (e.g. sectors etc. health, rural development, tourism industry etc) • Benefits/impacts of energy/water nexus project in other sectors of activity • Basic design of RE systems and EE measures • ESCOs and possible ESCO models that can be adopted in Cabo Verde • Mainstreaming climate resilience and gender Entrepreneurs, project • Sustainable energy-water nexus project and how RE and EE can be better integrated in developers, equipment water resource management projects. manufacturers, • Identification, design, installation, operation and maintenance of sustainable energy-water agricultures/municipalities nexus projects with theoretic and hands-on training modules managing energy-water nexus projects, consultants • Identifying, developing and packaging a pipeline of potential sustainable energy-nexus and industry support bodies investment projects • Preparing quality business plans that are consistent with existing financing mechanisms • Mobilizing and structuring investments in RE&EE – water projects • Mainstreaming climate resilience of energy infrastructure and gender • ESCOs and possible ESCO models that can be adopted in Cabo Verde • Entrepreneurship and business management Recipients/buyers of • Sustainable energy-water nexus project and how RE and EE can be better integrated in energy/water services and water resource management projects. technologies • Ability to assess the benefits of adopting of energy-water nexus projects (cost savings) • Cost benefit from the adoption of adequate energy management/maintenance activities • Willingness and ability to pay for energy/water nexus and ESCOs services

The activities to be undertaken under PC2 are intended to build local technical capacity on how to design, operate and maintain RE and EE based water management systems (with a special focus on desalinisation plants and pumping system) as well as to develop, manage and finance ESCOs. The environmental and social safeguards (developed in line with GEF and UNIDO policy during the PPG phase and articulated in detail in the Environmental and Social Management Plan; ESMP; Annex L) will form an intrinsic part of the capacity building activities, and thus will ensure that environmental and social elements are/will be integrated into the project design and development circle. The component will be carried out in close cooperation with CERMI to build national capacity in Cabo Verde in view of becoming a regional knowledge hub in the RE and EE sectors Cabo Verde, the ECOWAS and the PALOP.

Output 2.1.1. Training material on how to integrate RE and EE technologies in water management system produced Activity 2.1.1.1. Development of a training programme and training material on the integration of RE and EE technologies in water management system In this activity, a training programme and respective materials on how to integrate RE and EE in water management systems will be developed to complement CERMI curriculum. Although CERMI does not have a specific course/training module related to the integration of RE and EE in water management system, it has in place the following courses in the field of RE and EE: • Installation and maintenance of small PV systems for electricity production includes several modules from basic technical English to electric machines, basic principles of electricity and magnetism, project management, among others. • Installation and maintenance of air conditioning and refrigeration systems includes several modules on chemical physics, planning of preventive maintenance in air conditioning and refrigeration installations; assembly of mechanic components; assembly of electrical and measurement/control components; installation and maintenance of equipment’s, etc. Besides the above mentioned, CERMI is implementing a Lux Dev project “Anchorage of CERMI to ECOWAS” in which support is being provided to CERMI to train trainers in the ECOWAS on RE and EE. Under this programme, the trainers from the region come to CERMI in Praia to receive training. Furthermore, in the PPG stage, it was identified that FAO is running a project on Solar Power Irrigation Systems (SPIS) in which it has developed training manual and tools (toolbox) for SPIS42 and are now running workshops on how to finance, design, install and manage solar pump systems, whilst being aware of the risks to groundwater resources. ECREEE has also been a key institution on the provision of capacity building on RE and EE in Cabo Verde and in the ECOWAS region.

42 Toolbox on Solar Powered Irrigation Systems (SPIS): https://energypedia.info/wiki/Toolbox_on_SPIS 30

Links with existent projects/programmes in place will be taken into consideration when designing the training programme and the corresponding training materials. In order to better design this training programme, at the start of the GEF-UNIDO project the PMU together with CERMI will make an evaluation of the institutional capacity, training needs of market enablers and market participants, revising in this way the capacity needs inventory carried out at the PPG stage and summarised in Table 2. Moreover, the setup of the programme will be discussed and agreed with CERMI, the developed training materials could either be: • an autonomous training programme which may or not use basic modules of information already taught at some of CERMI existing courses, and or being developed/implemented through other projects/programmes in place; or • an extension of existing training programmes, and in this case, specific attendance requirement will need to be fulfilled by the participants in order to participate in the programme.

Depending on the capacity building needs inventoried and the agreed setup of the programme, the training programme will be developed including a detailed implementation work plan with a schedule, role/objectives/milestones, responsibilities and costs. This will be carried out by a consultant, CERMI, and the PMU. Table 3 highlights possible components of the training course. TABLE 3: TRAINING PROGRAMME ON THE INTEGRATION OF RE AND EE IN WATER RESOURCES MANAGEMENT SYSTEMS Training Programme / Modules of Contents of training programme/ module of the programme Target Groups the Programme • Energy and water nexus: relation and importance of the consideration of sustainable energy-water nexus project / opportunities and risks • Providing technical assistance to enterprises and coaching on RE and EE measures implementation in water resource management systems • Providing technical assistance on the identification of the aspects to (1) Energy Expert Training consider when integrating RE systems and EE measures in water DSE, CERMI, Cabo Verde (~0,5 week) resource management projects / opportunities and risks University, ECREEE • Conducting training sessions for stakeholders interested in developing their own RE and EE projects (Output 2.1.4) • Definition of the financial mechanism to be implemented for energy- water nexus initiatives • Mainstreaming climate change and gender in sustainable energy- water nexus projects • Energy and water nexus: relation and importance of the consideration of sustainable energy-water nexus project / opportunities and risks Management and technical Module 1: Training • Identify what sort of projects each participant could develop at their people involved in on Identification, sites developing RE projects Development and • Identify, develop a project pipeline of potential sustainable energy- associated with water Management of RE nexus investment projects resource managements projects associated • Identify the technical issues of the projects systems who are looking to with water • Carry out a life cycle cost analysis of the project develop a project, possibly management • Use a software for RE potential analysis with support from the GEF systems • Analyse the impact on the water cost of using RE when compared project with fossil fuels (2) Training • Special focus will be provided for the technologies associated with on RE integration in the demonstration projects and to RE technologies associated with desalinisation and water pumping systems Water • Understand all the issues related to the design and development of Resource Technical persons RE projects from assessing the site-specific resource available, to Management responsible for developing sizing and designing a system, to either writing or commissioning Projects RE projects. someone to write a specification, planning and permitting and (~2 Weeks) Module 2: Design providing links to additional information resources. The module is designed as a and Development of • Incorporate specific issues RE development associated with water follow-up from the RE Projects resource management systems in tendering Identification, Development • Importance of contracting certified installers / oversee the project and Management of RE installation Projects Training (Module • Mainstreaming climate change and gender in RE-water nexus 1) projects • Analyse existent financing instruments, including the FASA, the Project developers and Module 3: financial mechanism established under this GEF/UNIDO project, financial institutions that Financing carbon financing, available for RE-water nexus projects want to develop and/or instruments for RE • Analyse the financial viability and sustainability of these types of provide financing for RE projects projects. projects and who wish to • ESCOs as financial mechanism better understand the issues, 31

Training Programme / Modules of Contents of training programme/ module of the programme Target Groups the Programme • Guidance in the development of a quality business plan that is as well as technicians who consistent with existent financial mechanism want to expand their services to RE associated with water resource management projects. Project developers looking Module 4. • Guidance on operational and management issues of RE systems to develop a RE project Operation associated with water resource management projects including who wish to better Management and monitoring and quality control understand the issues better, Maintenance of RE • Guidance on maintenance operations of RE systems associated with as well as technicians who Projects water resource management projects and its importance want to expand their • Possible role ESCOs services to RE Project developers looking • Implementation of RE solutions in water management system, with a to develop a RE project who wish to better Module 5: Hands special focus on desalination plants and pumping systems understand the issues better, on Training • Realisation of maintenance operations on RE systems associated with water resource management projects (projects installed under as well as technicians who PC3 can be used for this purposes) want to expand their services to RE • Fundamentals of EE and the importance of the adoption of EE measures in water resource management projects: o EE terms and indicators o Load characterization and load management studies o Evaluation of the energy consumed per working area, per equipment and voltage level monitoring o Load curve and load factor calculation o Calculation and control of maximum load and optimization procedures Project developers and o Design, implementation and evaluation of energy savings and energy conservation programs financial institutions that want to develop and/or o Elaboration of energy consumption standards for different types of electric equipment provide financing for RE (3) Training on EE integration in projects and who wish to o Equipment energy performance certificates Water Resource Management better understand the issues, o Measurement of electric variables (power, active and reactive Projects (~1 Weeks) energy, voltage, current and power factor) as well as technicians who • Energy audits want to expand their services to RE associated o Definitions and process Energy performance analysis with water resource o management projects. o Assessment of energy saving opportunities for water resource management projects • Economic of EE systems associated with water resource management projects o Investment criteria o Cash-flows o Simple payback, internal rate of return and paybacks o LCC decision making method o Financing options • Role of ESCO in EE Specific training course that will be compiled using the information of the Specific training for ANAS, MAA, Training Programmes (2) and (3) will be developed. This training course ANAS, MAA, Águas de AdS and Association of aims at providing information on sustainable energy-water nexus Santiago (AdS) and Municipalities initiatives (importance, identification, important aspects to consider, stage Association of (~1 week) of development). It is supposed to be compiled as a lighter version of Municipalities Training Programmes (2) and (3).

Training Programme (2) that will focus on PV systems for water pumping should be designed together with FAO, as they demonstrated interest in cooperating with this GEF/UNIDO project and on running structured training sessions based on their SPIS programme in Cabo Verde. Once it has been established the necessary supporting materials will be developed by consultants. These will include a compilation of bibliographic references, guidelines PowerPoint presentations, work assignments (theoretical and hands-on training) and other training materials as the expert sees fit. Environmental and social safeguards will form an intrinsic part of the package.

The environmental and social safeguards (developed in line with GEF and UNIDO policy during the PPG phase and articulated in detail in the Environmental and Social Management Plan; ESMP; Annex L) will form an intrinsic part of the capacity building activities, and thus will ensure that environmental and social elements are/will be integrated into the project design and development circle. Due to its experience in capacity building on RE and EE in Cabo Verde and in the ECOWAS, ECREEE will be involved in the training programme definition and in the preparation of the training materials. In addition to the training programme and materials, it is estimated that at least two technical manuals covering design, operation and maintenance of water management system will be developed: one on RE based desalination plants and other on RE based water pumping system. This will be developed by a consultant in close cooperation with CERMI and ECREEE.

Output 2.1.2. Training material on entrepreneurship and development and management of ESCOs produced Activity 2.1.2.1. Development of training programme and material on entrepreneurship and development and management of ESCOs A training programme and respective materials on entrepreneurship and development and management of ESCOs will be developed to complement CERMI curriculum. During the stakeholder’s consultation in the PPG phase, it was identified that: • CERMI would like to have this activity expanded to cover entrepreneurship (previously and at PIF stage this output will be only dedicated to the developing of training material for the development and management of ESCOs); • Chamber of Commerce of Sotavento (CCS) has an entrepreneurship programme in place. ECREEE has an entrepreneurship program on RE and EE supported by IRENA and implemented with CERMI and I2EE which is coming to the end. This program is expected to continue as an ECREEE-World Bank project targeting RE and EE off-grid project in ECOWAS. The program has components on: training, enabling finance mechanism and entrepreneurship. ProEmpresa – Institute for Support and Enterprise Promotion (herein referred as ProEmpresa) has programmes that support entrepreneurs in the establishment of their activities/projects. They have two programmes: (a) Young Start-Up 43 and (b) Promoting Micro Entrepreneurship44. In order to better design this training programme, at the start of the GEF-UNIDO project the PMU together with CERMI, CCS and ECREEE will make an evaluation of the institutional capacity, training needs of market enablers and market participants, revising the capacity needs inventory carried out at the PPG stage and summarised in Table 4. Depending on the capacity building needs inventoried, this autonomous training programme on entrepreneurship and ESCOs will be developed including a detailed implementation work plan with a schedule, roles/objectives/milestones, responsibilities and costs. This will be carried out by a consultant, CERMI, CCS (as CCS demonstrated willingness to cooperate in the development of the training programme and in its delivery), ECREEE, ProEmpresa and the PMU. The aim of this training programme is two folded: • The entrepreneurship component will aim to train entrepreneurial managers as acting agents to accelerate the creation, dissemination and application of new business/ innovative ideas. • The ESCOs component will aim at providing all information that will enable the participants to create and manage ESCOs.

TABLE 4: PROPOSED CONTENT FOR THE ENTERPRENEURSHIP AND ESCOS TRAINING PROGRAMME MODULES Entrepreneurship (~2weeks) ESCO (~1week) • Entrepreneurship and its national role • Financing options for RE and EE • Innovation and development of new products and services / • ESCOs and its potential national role start-ups and scale up o Basic concepts of ESCOs • Marketing / Digital Marketing o Current applications of ESCOs • Methods of business research o Comparative analysis of different ESCOs models • Financial analysis for decision making • ESCO Success drives / necessary ESCO development • Business plan development condition • Creativity and innovation • Energy Performance contracting • Presentation techniques and elevator-Pitch o Financial mechanism o Business revenue models

43 ProEmpresa Start-Up Programme: http://www.proempresa.cv/index.php/promoempre/13-programas/21-startup-jovem 44 ProEmpresa Promoting Micro Entrepreneurship: http://www.proempresa.cv/index.php/promoempre/13-programas/20-fomento- ao-micro-empreendedorismo 33

• Financing instruments available • Potential ESCO model for energy-water nexus projects • Financing for ESCO

Once the topics to be covered are selected in consultation with relevant stakeholders, the necessary supporting materials will be developed by consultants. These will include a compilation of bibliographic references, guidelines, PowerPoint presentations, work assignments (theoretical and hand on training) and other training materials as the expert sees fit. Output 2.1.3. CERMI’s staff and other institution’s Staff trained using the programmes and modules produced in Output 2.1.1 and Output 2.1.2 on a train-the-trainer basis Activity 2.1.3.1. Train trainers on the modules developed in Output 2.1.1 and Output 2.1.2 The objective of this activity is to carry out Train-the-Trainers programmes taking advantage of CERMI’s state of the art infrastructure, to build capacity amongst CERMI staff as well as staff of other energy/water public institutions (such as ANAS, MAA, DSE) on the subjects using the training materials developed in Outputs 2.1.1 and 2.1.2. This activity aims at contributing to mitigate the barriers associated with the limited technical knowledge on the installation, operation and maintenance of combined systems as well as on ESCOs business models and operations by creating a critical mass of trainers that can deliver the established programmes in Cabo Verde, the ECOWAS and the PALOP. It is envisaged that at least two train-the-trainers programmes will be carried out: one for CERMI staff and the second for energy/water public institution staff. The trainings will seek to have at least 40% female participation. The following sub-activities will be implemented: 2.1.3.1.1. Design and definition of the Train-the-Trainers Programme The two Train-the-Trainers programmes will be designed having in mind the results of the capacity needs inventory conducted in Output 2.1.1. and 2.1.2. and the content to be taught in Output 2.1.4. The detailed work plan for each of the modules will be compiled and will clearly highlight the schedule, objectives, roles and responsibilities, milestones, target audience etc. This will be carried out by consultants with support from the PMU, CERMI, CCS and FAO. 2.1.3.1.2. Execution of the Train-the-Trainers Programme A group of approximately 20 professionals will be trained through classroom lessons, on-the-job and mentoring by the international experts and equipped with the expertise and the tools required for the following services: • technical assistance to enterprises and coaching on RE and EE system implementation on water resource management project • Conducting training programmes for stakeholders interested in developing RE/EE-water nexus projects.

It is expected that the training participants will come from CERMI, DSE, Cabo Verde University and ECREEE. Some of the trained professionals will subsequently assume roles as RE and EE experts for water resource management projects and become a source of expertise and services for the GEF/UNIDO project as well as for the energy-water nexus sector. Women will be actively encouraged to participate. The Train-the-Trainers programme will follow the following steps: Step 1: Preparation of the training programme This involves the preparation of the training material and contents of the lessons, the selection of trainees, the identification of 1-2 demonstration projects for the practical training, securing approval for site visits, classroom logistics, etc. Step 2: 1st training period International experts provide training (summarised in Table 3 and Table 4) to national trainees in classrooms and at projects locations implemented under Output 3.1.1. For each of the courses, the International Expert(s) will train National RE Experts on the use of the training curriculum. This curriculum will be introduced to the national experts in three stages: observing the international experts teaching / delivering the first training; co-teaching / delivering the second training with the international experts; and delivering the third training with international experts observing and providing feedback of teaching/ delivering techniques. Any future workshops will be delivered by the national experts alone. Step 3: 2nd training period: trainees apply knowledge, skills and tools provided Trainees coming from potential project developers apply the knowledge, skills and tools that have been provided to identify potential projects and to start on the design and development of the projects. During this period of time, trainees have access to international experts’ “remote” coaching and technical advice. Step 4: 3rd training period International experts provide advanced training to national trainees in classrooms and at demonstration project sites. They review and discuss the projects development and the status that the participants have reached. They observe and provide feedback to trainees in the application of skills in project development. 34

2.3.1.2. Evaluation of the Train-the-Trainers Programme This activity aims at evaluating the training component of the Train-the-Trainers course and will be carried out by the PMU.

Output 2.1.4. 10 training sessions (5 for each training programme) are conducted by CERMI trained staff Activity 2.1.4.1. Deliver 10 training sessions (5 of each model) to interested stakeholders This activity will result in the delivery of 10 training sessions: 5 of the Training Programme on Integration of RE and EE in Water Resources Management Systems and 5 on the Training Programme on Entrepreneurship and Development and Management of ESCO. It is envisaged that around 100 market enablers (project proponents/organisations/technicians) will have their capacity built on these subjects. During the implementation of the GEF/UNIDO project the detailed work plan for the execution of these 10 training sessions will be established between the PMU and CERMI. These training programmes will be delivered at CERMI and by the trained CERMI staff and trained staff from other institutions (people trained in Output 2.1.3). At the end of each training session the trainees and the training session will be evaluated. This evaluation will be carried out by the PMU.

The following table summarises the outputs and activities of PC2. Project Component 2 (PC2): Build capacity to support the integration of RE and EE technologies in water resource management Outcome 2.1. Local capacity on energy-water nexus and ESCOs approach enhanced PC2 is directed to build local technical capacity on how to design, operate and maintain RE/EE based water management systems (with a special focus on desalinisation plants and pumping system) as well as to develop, manage and finance ESCOs Output 2.1.1. Training material on how to integrate RE and EE technologies in water management system produced Planned and Envisioned Activities Responsibility Activity 2.1.1.1. Development of training material on the FAO, ECREEE, CERMI integration of RE and EE technologies in water management PMU systems Output 2.1.2. Training material on entrepreneurship and development and management of ESCOs produced Planned and Envisioned Activities Responsibility Activity 2.1.2.1. Development of training material on CCS, CERMI, ECREEE, ProEmpresa entrepreneurship and development and management of ESCOs PMU Output 2.1.3. CERMI’s staff and other institution’s Staff trained using the programmes and modules produced in Output 2.1.1 and Output 2.1.2 on a train-the-trainer basis Planned and Envisioned Activities Responsibility Activity 2.1.3.1. Train trainers on the modules developed in CCS, CERMI, FAO Output 2.1.1 and Output 2.1.2 PMU Output 2.1.4. 10 training sessions (5 for each module) are conducted by CERMI trained staff Planned and Envisioned Activities Responsibility Activity 2.1.4.1. Deliver 10 training sessions (5 of each model) National Experts to interested stakeholders CERMI trained staff PMU

Project Component 3 (PC3): Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems Previously conducted feasibility studies and pilots have showed the solid potential and benefits of integrating RE and EE technologies in desalination plants and water pumping systems in Cabo Verde. Nevertheless, the majority of the pilots have been led by the public sector and NGO’s. Therefore, the objective of PC3 is to promote an environment conducive to the widespread market-based adoption of RE and EE technologies in water management systems with a special focus on desalination plants and water pumping systems. Under this component, technical assistance will be provided to develop and use an appropriate energy service business model and a robust 35 tailored financial mechanism supporting the scaling-up efforts. In addition, a number of high impact RE and EE technologies in water management projects with a total capacity of 3.6MW will be developed and implemented while promoting the establishment of public private investment partnerships as a sustainable mechanism to accelerate the deployment of clean energy- water nexus initiatives. During the PPG stage more than 25 sustainable energy-water nexus projects have been received from public and private project proponents from the different islands of Cabo Verde. The GEF/UNIDO project will establish execution contracts with ECREEE (as proofed to be effective and successful in previous projects). The project – through the to be established management structure – will provide the planned and foreseen technical cooperation services to and for the identified investment projects. Any contracts between the identified portfolio of projects and financing mechanisms and/or asset providers will be handled and executed between the respective partners.

Output 3.1.1. ESCOs approach and tailored financial mechanism developed and used to support demonstration projects integrating RE and EE in water resource management systems to achieve around 1.6 MW of installed capacity Activity 3.1.1.1. Development of an ESCO approach and tailored financing mechanism to support the implementation of energy-water nexus investment projects RE and EE are key elements of energy and climate policies which have triggered the creation of a market for RE and EE services attracting private capital in several countries. In addition, rising energy prices and increased interest in energy management in public and private organisations have created a new demand for energy services. Nevertheless, ESCOs in African countries – with the exception of Tunisia and South Africa– are almost non-existent. Besides the absence of appropriate legislation, ESCO’s financing has been highlighted by experts as one of the main barriers preventing ESCOs’ development in Africa. In fact, most commercial banks still perceive financing of ESCOs’ interventions as a high-risk investment and therefore they are reluctant to provide financing for ESCOs projects. This activity aims at providing technical, business and financial support to develop an energy service business model and tailored financial mechanism to jointly support ESCOs targeting the integration of RE and EE in water management system. During the PPG, in consultation with relevant stakeholders (including government authorities, private sectors and financial institutions) and having into account the different financing instruments being developed and implemented in Cabo Verde a draft of the business model for ESCO and financial mechanism was developed. During the PPG phase, all the stakeholders consulted agreed that the creation of an ESCO market would be beneficial for Cabo Verde, especially if they could provide management and technical assistance to energy-water nexus projects. A potential model that could be adopted for ESCOs is the following: • Investors could provide the capital for the ESCOs to design and implement an energy-water solution in a municipal system or even in a large institutional setting; • The solution would yield towards water and/or energy saving; • The ESCO would be paid based on a series of performance milestones and savings thresholds; • The returns to the ESCO and the dividends paid to investors will compensate for shouldering the risks. There are several financing instruments being developed/in place in Cabo Verde that can be used for financing ESCO services and sustainable energy-water nexus projects: • FASA 45 : An autonomous rolling fund created by the Cabo Verde Government with its own legal entity and administrative, financial and patrimonial structure, created to mobilize and manage the resources needed to finance projects in the water sector. FASA aims at optimizing financial resources by using Government funds and international donations as leverage to obtain other financial resources for investment in water sector related projects. FASA provides financing for technical assistance and investment projects classified in three different categories: (I): studies, technical assistance, R&D and for investigation and development activities necessary for the preparation of investments for improvement and expansion of water and sanitation systems; (II) investment and renovation, renovation and operational improvement of existing systems, including support for institutional development and improvement of the operational performance of public and private entities that provide services of public interest in the water and sanitation sector; (III) investments to expand infrastructure and facilities in the water and sanitation sectors. The following entities are eligible to submit project proposals and requests for financing to FASA: municipalities; public, private and PPP, educational institutions; ONGs; Community based Associations and Organizations (OBCs) or professional; private sector organisations or representatives; other entities eligible for studies, publications, capacity building and technical assistance. The received project proposals for financing are evaluated through a set of transparent criteria: financial, economic, technical, operational, environmental, social and gender inclusion and its contribution determined per project. FASA may provide up to 80% of the project investment with a 4.5% interest rate, provided that the project proponent provides/proves that it is able to provide the necessary remaining financing. FASA will also manage a social fund to help

45 Draft version of the FASA statutes. 36

poor families headed by women, to get better access to water and sanitation. FASA has already secured 4Million Euros from Lux Dev. Other financing will be mobilized for this fund once it starts its operation. FASA aims to be operational in the beginning of 2018. • ECOWAS Renewable Energy Facility (EREF)46: grant facility which is managed by the Secretariat of the ECREEE based in Praia, Cabo Verde. It provides grant co-funding for small to medium sized RE and EE projects and businesses in rural and peri-urban areas. • ProEmpresa financing instruments aims at being a driving force for the local and national economy by promoting inter- institutional cooperation in support of entrepreneurship. Its mission is to promote, facilitate and monitor the national private investment of micro, small and medium enterprises (investment less than fifty million ECV) in all sectors of the national economy. ProEmpresa supports entrepreneurs through three financing mechanisms (i) ProEmpresa that helps the promoter preparing the project idea to submit to the bank for financing; (ii) Pro-Garante that provides up to 50% guarantee; and (iii) Pro-Capital that can provide 5-10% of co-finance to projects with values up to 50,000 EUR. During PPG ProEmpresa demonstrated interest in participating in the definition of the financing instrument for sustainable energy-water projects. • Bank loans for RE & EE project: there are several financial institutions that can offer loans for the development of RE and EE – water nexus projects, but not all of them have a dedicated line towards RE and EE. Caixa Económica, with approximately 30% market share, has a credit line open to finance RE equipment to companies and households. However, as a result of the combination of high interest rates (10% p.a. and varying eligibility conditions47 plus the need to present important guarantees, virtually no transactions have taken place). On the other hand, Banco Comercial do Atlântico (BCA) which is the main commercial bank in Cabo Verde with approximately a 50% market share, is offering slightly better interest rates for corporate loans (i.e., 6.5% to 9%) for up to 10 years and very similar terms for household’s loans destined to financing RE equipment. However, in spite of having better terms but still requiring important guarantees, virtually no loans for RE investments have been granted. Some of rest of the banks48 are offering financing for RE investments on similar terms but still requiring steep guarantees which the majority of the corporate and household customers find unattractive as proven by the fact that almost all of the decentralised generation systems that have been installed to date have been financed on a 100% equity basis. More details on these financial instruments can be found in the Baseline Report (Annex H). Having in mind the existing/being developed financial instruments and the GEF funding, the following is the financial mechanism to be used for sustainable energy-water nexus projects implemented through this GEF/UNIDO project. It can be used to provide support for the implementation of energy-water investment projects and/or the development of ESCOs to support the implementation/maintenance of RE and EE projects associated with water management system. Figure 3 shows the relations between the different co-finance sourced to be used as a financial mechanism for project implemented under PC3.

46 Information on EREF can be found at: http://www.ecreee.org/page/renewable-energy-facility-peri-urban-and-rural-areas-eref 47 RE loans are being offered at 10% for 5 years, covering up to 70% of the equipment cost, for companies up to a maximum of ECV 1 million and for 100% of the equipment cost for households up to a maximum of ECV 3 million, plus in both cases a signature fee of 1% of the loan principal 48 According to Banco de Cabo Verde there are 8 commercial banks operating in Cabo Verde which are: Banco Angolano de Investimentos Cabo Verde, S.A. (BAI), Banco Caboverdiano de Negócios, S.A. (BCN), Banco Comercial do Atlântico, S.A. (BCA), Banco Interatlântico, S.A. (BI), Banco Internacional de Cabo Verde, S.A., Caixa Económica de Cabo Verde, S.A. (Caixa), Ecobank Cabo Verde, S.A. and Novo Banco 37

FIGURE 3: RELATION OF THE DIFFERENT CO-FINANCE SOURCES FOR PC3 DEVELOPMENT AND IMPLEMENTATION

In general, it is expected that under this financial mechanism: • The project proponents will contribute with at least 10% of the total investment of the project (sourced by his/her own funds and/or through a bank loan); • GEF grant can contribute up to 30% of the total investment, varying from project to project, and its contribution can be in the form of a grant or technical assistance services to support the development/establishment of the project. The GEF grant can only be used for the RE and EE component of the project or/and for the provision of ESCO services under the project or/and ESCO establishment; • EREF can contribute up to 50,000 USD per project and it can only go towards the RE & EE part of the project and not the water management facility; • FASA can provide up to 80% of the necessary co-finance for the projects (at a 4.5% interest rate), covering both the energy and the water management components of the project; • ProEmpresa can either contribute to a small percentage of the necessary financing and/or support the project proponents in getting a loan for the financing institutions at a lower interest rate (at around 4.5% interest rate). The financial mechanism /mix of financing sources to be used for each project will depend on the project’s needs and will be discussed and defined with each project proponent. At the start of the GEF/UNIDO project, and once that the Nexus Platform is established, the financing mechanism here proposed will be used as a basis to set up a general financing mechanism that can be easily adapted to the projects identified. This will be carried out by the PMU, ANAS, ECREEE, ProEmpresa and other identified financial institutions and with support from a National and International Finance Expert, if required. The proposed financing mechanism will be used (and adapted if needed) for financing the demonstration projects to be implemented through Activity 3.1.1.2 and the investment projects to be implemented under Output 3.1.2/Activity 3.1.2.1. The proposed financing mechanism will be first tested in the implementation of the demonstration projects (Activity 3.1.1.2) and then enhanced for the implementation of the projects under Output 3.1.2. Capacity will be built on the definition of the financial mechanism and its adaptation for sustainable energy-water nexus projects under PC2 (Training Programme (1): Energy Expert Training) to staff of the platform host (MEE/DNEIC/DSE) as well as to staff from other correlated institutions. This will ensure sustainability of the implementation of the defined financial mechanism after the GEF/UNIDO project comes to an end.

Activity 3.1.1.2. Identification and implementation of 1.6 MW of sustainable energy-water nexus demonstration projects Under this GEF/UNIDO project, at least 1.6MW of RE and EE projects associated with water management systems will be developed and their implementation facilitated to demonstrate the potential and benefits of using clean energy technologies in water management systems. During the PPG phase, several projects have been identified and screened according to their: relevance, feasibility, cost-effectiveness, sustainability, impact and replication potential (see Table 5). Using these criteria, 10 projects with a capacity of more than 2MW were selected from the project pipeline for implementation during Phase I (first year and a half). From the project pipeline, further 1.6 MW of projects will be selected by the project’s Nexus Platform & Steering

Committee to be implemented in Phase II (last year and a half). The list of projects to be implemented in Phase II can be found under Activity 3.1.2.1 and all pre-feasibility studies have been included in Annex I. TABLE 5: PILOT PROJECT SELECTION CRITERIA

Criterion Specific Assessment Criteria • Alignment of the project with national policies and GEF 6 project objectives o RE installed capacity (MW) and generated energy (kWh) Relevance o Reduction in the demand through adoption of EE (kWh) and reduction of the peak load (MW) o Financial model adopted by the project • Alignment with national plans (PANER, PANEE, INDC, PNES, etc.) • Implementation probability • Economic viability Feasibility • Co-finance structure (% of investment sought) • Timing for implementation • Risks/ barriers for project implementation and adopted mitigation measures Cost • Cost / m3 of water Effectiveness • Pollution reduction and GHG emission reduction Sustainability • Management model adopted by the project • Social inclusion/social impact: o Number of beneficiaries Inclusion of gender issues Impact o o Contribution to water access. • Environmental impacts and mitigation measures adopted • Diesel savings Replication • Scalability: number of habitants / businesses that can benefit from this type of projects potential • Ease of Replication

The selected projects cover a range of RE technologies (solar PV, wind and ocean energy technologies), water management systems applications (water pumping for consumption, water pumping for irrigation, water desalinisation for consumption, water desalinisation for irrigation) and target groups (urban and rural water consumers, rural communities, agriculture sector). The generated outcomes/lessons learnt, and financial models adopted will be used for activities carried out under PC1 and PC2 of the GEF/UNIDO project and will be widely disseminated in the ECOWAS region and SIDs. The selected projects are expected to have high potential for replication and generate positive social, economic and environmental impacts. For the demonstration projects that will establish solar water pumping facilities (in particular the below projects #6, #8,# 9 and #10 the GEF/UNIDO project will address the risk of overexploitation of groundwater and the subsequently resulting in salt-water intruisions. For the desalination projects (#1, #2, #3, #4, #5 and #7) the GEF/UNIDO project will address the effects for the marine habitat (marine/ fish population, marine algaes, sea-water quality). The more than 2MW of RE and EE projects associated with water management systems identified are briefly described below. For detailed descriptions on of each project, see Annex I- Prefeasibility Studies. Project #1: WAVE2OTM in Praia Grande, São Vicente Island Resolute Marine proposed project aims at installing a commercial scale ocean energy-based desalination plant that will produce 4,000 m3/day of drinking water to be supplied to São Vicente population. This project will have an approximately 1,000 kW of RE capacity installed generating approximately 5,840 MWh/year. The project is now in pilot project development stage, in which a 100 kW ocean energy desalination plant with 500m3/day of production capacity producing 338 m3/day of drinking water will be installed in Praia Grande, São Vicente to prove the concept before the deployment of the commercial scale solution. The GEF/UNIDO project will support this project by providing a 150,000 USD grant towards the development/installation of the commercial scale solution. The GEF grant corresponds to 3% of the pilot project capital cost and to 1% of the cost of the commercial scale project.

This pilot project is envisaged to contribute to the reduction 388.8 tCO2/year of GHG emissions, totalizing 7,777 tCO2 during its lifetime (25 years). The full project (commercial scale) is envisaged to contribute to the reduced 5,242.1 tCO2/year, totalizing 104,843 tCO2 during the 25 years of lifetime of the commercial scale installation. The estimation of the GHG emission was carried out assuming an equivalent electricity-based desalination plant with and electricity requirement of 3.6 kWh/m3 of water produced.

Project #2: MASCARA PV Solar Desalination Project, Maio Island The Mascara Renewable Water proposed project consists on the installation of an autonomous solar-powered desalination unit to produce drinking water to be supplied to Maio Island. The desalination unit will produce 600 m3 per day of fresh water where the 39 electricity needs are fed by a 450kWp solar system generating approximately 742.5 MWh/year. For the purposes of the project development an ESCO will be created to cover part of the investment needs as well as to ensure operation and maintenance needs of the system over the project lifetime. If the proposed project is not installed an electricity-based desalination plant would be installed. The CAPEX for the project is 3,427,800 USD including all the project components, management, installation, and commissioning of the project. OPEX costs are estimated at 77,657 USD/year. An ESCO will be created by XS2SOLAR to provide part of the necessary financing of the project as well as it will be in charge of management, operation and maintenance of the installation for 15 years. The water is expected to be sold to the water distributor at 2.7 USD/m3 which is more affordable to the population and below todays cost of water in Maio Island. Water sales revenue was estimated at 564,038 USD/year and electricity savings at 337,338USD/year. The GEF/UNIDO project will support this project by providing 200,000 USD grant towards the development/installation of the proposed project which corresponds to 6% of the projects capital cost.

In terms of CO2 emissions, the 100% solar energy desalination plant will avoid 520.8 tCO2 per year in GHG emissions; and for a 20-year lifecycle it will add up to 10,416 tCO2 in addition to the social, economic and health benefits for the local population.

Project #3: XS2SOLAR Desalination Plant with 300kW Retrofitted NordTank Wind Turbine, Sal Island The XS2SOLAR proposed project is based on the modification of an existing 300kW wind turbine in combination with the refurbishment of a reserve osmosis (RO) unit of ELECTRA to produce drinking water to be supplied to Sal. The turbine will generate 600 MWh/year that will produce around 200,000 m3 of water per year. The system will work 333 days per year. For the purposes of the project an ESCO will be created to provide the necessary investment for the project development as well as ensure operation and maintenance of the system. If the proposed project is not installed a diesel-based desalination plant would be installed. The CAPEX costs for the project is 1,054,800 USD including all project components, management, installation, and commissioning of the project. OPEX costs are estimated at 60,000 USD/year and a reinvestment of 300,000 USD will be made in year 6 of the project. An ESCO will be created by XS2SOLAR to provide part of the necessary financing of the project as well as to manage, operate and maintain the installation for 15 years. XS2SOLAR will establish a Water and Power Purchase Agreement with ELECTRA to sell the produced drinking water at 1.13USD/m3. Water sales revenue was estimated at 226,717 USD/year during a 15-year period (period of the Water and Power Purchase Agreement). It is estimated that the project will save around 144,144 USD/year in diesel costs when compared with a diesel-based desalination plant. The GEF/UNIDO project will support this project by providing a 175,000 USD grant towards the development/installation of the proposed project, that corresponds to 17% of the projects capital cost.

In terms of CO2 emissions, the proposed project will avoid 369.4 tCO2 per year in GHG emissions and 5,540 tCO2 during the system’s lifetime (15 years) in addition to the social and economic benefits for the local population.

Project #4: XS2Solar Remodified 2-blade Wind turbine of 80 kW at the Power and Desalination Plant of ELECTRA, Sal Island The XS2Solar proposed project is based on retrofitting a 2-blade 80kW wind turbine in combination with a reverse osmosis desalination unit to be installed at an ELECTRA site in Palmeira which aims to produce drinking water for the Sal population. The turbine will generate 160 MWh/year producing around 53,500m3 of drinking water per year. The system will work 333 days per year. For the purposes of the project an ESCO will be created to provide the necessary investment for the project development as well as ensure operation and maintenance of the system. If the proposed project is not installed a diesel-based desalination plant would be installed. The CAPEX for the project is 561,600 USD including all the project components, management, installation and commissioning of the project. OPEX costs are estimated at 40,000 USD/year and a reinvestment of 125,000 USD will be made in year 10 of the project. An ESCO will be created by XS2SOLAR to provide part of the necessary financing of the project as well as to manage, operate and maintain the installation for 15 years. XS2SOLAR will establish a 15-year Water and Power Purchase Agreement with ELECTRA to sell the produced drinking water at 2.28USD/m3. Water sales revenue was estimated at 121,980 USD/year for the 15-year period (period of the Water and Power Purchase Agreement). It is estimated that the project will save around 34,703 USD/year in diesel costs when compared with a diesel-based desalination plant. The GEF/UNIDO project will support this project by providing a 112,320 USD grant towards the development/installation of the proposed project which corresponds to 20% of the projects capital cost.

In terms of CO2 emissions, the proposed project will avoid 98.8 tCO2 per year in GHG emissions; and 1,482 tCO2 during the system’s lifetime (15 years) in addition to the social and economic benefits for the local population.

Project #5: Salamansa PV Desalinator: 100% Autonomous PV Desalination Plant, São Vicente Island The project promoted through a partnership between the São Vicente Municipality and the company Elemental Water Makers (EWM) consists on the implementation of 100% autonomous 60kW solar energy water desalination plant in Salamansa to produce the necessary drinking water for the Salamansa population (currently supplied by tank trucks). The 60kW solar plant will generate 78.8MWh/year and the desalination plant will produce 50m3/day of drinking water that meets the Cabo Verde quality standards and is more affordable to the population. If the proposed project is not installed a less efficient grid-connected desalination plant would be installed. The GEF grant will allow the project to lower its water cost so that it is at a similar price as the one charged for water in Mindelo providing a long-sought solution to the São Vicente Municipality. The CAPEX for the project is 660,000 USD including all the project components and installation. Moreover, EWM will provide an ESCO type of service as it has a contract to deliver 50m3 of water per day to the Municipality to be distributed in Salamansa and is in charge of management, operation and maintenance of the installed system for 20 years. It is estimated that the project will save around 45,900 USD/year in electricity costs when compared with a more traditional (and thus less efficient) grid- connected desalination plant. The GEF/UNIDO project will support this project by providing a 132,000 USD grant towards the development/installation of the proposed project, that corresponds to 20% of the projects capital cost. In terms of CO2 emissions, the 100% solar energy desalination plant will avoid 56.6 tCO2 per year in GHG emissions and 1,132 CO2 during the system’s lifetime (20 years) in addition to the social and economic benefits for the local population.

Project #6: Solar Pumping System for the Young Framers of the Casa do Meio, Santo Antão Island The project promoter ONGD (Non-Governmental Organization for Development) ADPM (Associação de Defesa do Património de Mértola) will execute the project in partnership with Associação dos Jovens Agricultores da Zona Peri-Urbana de Porto Novo (AJAZPUPN), the Municipality of Porto Novo and the Cabo Verde Ministry of Agriculture. The project, located in Casa do Meio, intends to retain young farmers' in the territory by creating self-employment opportunities in agriculture sector including creating the conditions for the use of plots of land already distributed to a few dozen families. The project will pump the water for efficient irrigation system through a solar PV system of 25.44 kWp. The CAPEX for the PV project is 220,526 USD. It is estimated that the project will save on average 11,803 USD/year in electricity bills and 236,068 USD over the project lifetime (20 years). The project has already 70% of the financing aligned and is requesting the remaining 30% from GEF. The project is only viable with the GEF grant, thus the GEF/UNIDO project will support this project by providing a 66,158 USD grant towards the development/installation of the proposed project.

In terms of CO2 emissions, the proposed project will avoid 33.3 tCO2 per year in GHG emissions and 666 tCO2 during the system’s lifetime (20 years) in addition to the social and economic benefits for the local population.

Project #7: Introduction of Renewable Energy for Sustainability of the Drinking Water Production System in Porto Novo, Santo Antão Island The project promoter is Águas de Porto Novo, SA (APN, SA) that is a public-private partnership (PPP) that includes in its shareholder structure the Government of Cabo Verde represented by the Government and the Porto Novo Municipality and the Cabo Verdean company Águas de Ponta Preta, Lda (APP). APN, SA is responsible for the design, construction and operation of a seawater desalination system (IDAM, Portuguese acronym for Instalação de Dessalinização de Água do Mar) for the city of Porto Novo. Other activities of the company also include: collection, purification and treatment of waste water; recycling and reuse of purified water for other purposes than human consumption; as well as the construction and production and commercialization of electricity through renewable and/or conventional resources that may prove necessary. The proposed project aims to improve the sustainability and performance of the drinking water production system in the city of Porto Novo, through the introduction of a RE solution. The project consists on the implementation of 55kWp photovoltaic plant for self-consumption at APN, SA premises displacing the diesel based produced electricity. This will be an opportunity for the company to reinforce its capacities in terms of RE and EE. Porto Novo has the IDAM (with a drinking water production capacity of 1 000m3/day) that produces around 600m3/day of drinking water that is supplied to the population. Currently, IDAM electricity needs are meet through diesel generation as they are using the 400 kW power station installed at the beginning of the project for emergency power supply, on its day to day activities. The water cost in Porto Novo is set by ARE and includes a component that reflect the energy production cost. The water tariff in

Porto Novo, due to its high electricity generation costs is above the national average. If the proposed project is not installed IDAM would continue to use for its operation diesel-based electricity from the emergency generators. The CAPEX for the project is 95,995 USD including all the project components and installation. It is estimated that the project will save around 22,046 USD/year in diesel for energy production. The GEF grant will allow the project to lower its water cost by approximately 5% for the population of Porto Novo enabling Porto Novo inhabitants to pay for the water according to the national average. The GEF/UNIDO project will support this project by providing a 28,798 USD grant towards the development/installation of the proposed project.

In terms of CO2 emissions, the proposed project will avoid 62.8 tCO2 per year in GHG emissions; and 1,256 tCO2 during the system’s lifetime (20 years) in addition to the social and economic benefits for the local population. The project intends to be a model to contribute to the growth of the green economy, allowing the technological transference of RE, with direct impacts in the performance of the drinking water production system, creating more jobs and specialized human resources in RE systems, as well as to allow the appearance of new business opportunities in the field of outsourcing of services (such as maintenance, import of equipment).

Project #8, Project #9 and Project #10: Photovoltaic Plants for Strengthening the Drinking Water Supply System, Santo Antão Island The Câmara Municipal da Ribeira Grande proposed project consists of two 15kWp and one 11kWp solar photovoltaic (PV) installations to supply electricity to 3 different pumping stations located in Ponta do Sol, Pedrene and João Afonso that are currently fed with grid electricity. The 3 PV units will produce a total of 70.3MWh/year. For the purposes of the project development an ESCO will be created to cover part of the investment needs as well as to ensure the operation and maintenance of the system over the project lifetime. The CAPEX for the PV project for the three PV systems is 121,155 USD and the OPEX are 1,696 USD per year. It has been estimated that the project will have a 55% electricity saving per year per pumping station. The GEF/UNIDO project will support this project by providing 9,752 USD grant towards the development/installation of the proposed project that corresponds to 30% of the projects capital cost.

In terms of CO2 emissions, the 3 PV plant will avoid 49.7tCO2 per year and 1,242 tCO2 during the system’s lifetime (25 years) in addition to the social and economic benefits for the local population.

TABLE 6: KEY FEATURES OF THE SELECTED DEMONSTRATION PROJECTS Estimated Estimated Capital Water Total capital Investment annual direct GHG Project size GEF Grant cost/ton ID Project Name production costs Costs/kW electricity reduction GHG saved generation per year kW (m3/day) USD USD USD MWh tCO2/year USD/tCO2 1 WAVE2OTM in Praia Grande 1,000 4,000 5,659,000 150,000 5,659 5,840.0 5,242.1 1,080 2 MASCARA PV Solar Desalination Project 450 600 3,427,800 200,000 7,617 742.5 520.8 6,582 XS2SOLAR Desalination Plant with 300kW 300 550 1 054 800 175 000 3 516 600.0 369.4 2,855 3 Retrofitted NordTank Wind turbine XS2Solar Remodified 2-blade Wind turbine of 80 kW at the Power and Desalination Plant of 80 162 561,600 112,320 7,020 160.0 98.8 5,684 4 ELECTRA Salamansa PV Desalinator: 100% Autonomous PV 60 50 660,000 132,000 11,000 78.8 56.6 11,661 5 Desalination Plant Solar Pumping System for the Young Framers of 25.44 NA 220,526 66,158 8,668 46.4 33.3 6,622 6 the Casa do Meio Introduction of Renewable Energy for Sustainability of the Potable Water Production 55 600 95,995 28,798 1,745 91.8 62.8 1,529 7 System in Porto Novo 8,9 Photovoltaic Plants for Strengthening the Drinking 41 692 121,155 36,348 2,955 70.3 49.7 2,438 e 10 Water Supply System TOTAL 2,011 6,654 11,800,876 900,624 6,023* 7,629.8 6,433.5 4,806* Legend: *Values are the average value and not the total NA- Not Available

The demonstration projects will be implemented under the supervision of the PMU with support of the National and International RE & EE Experts and various specialized subcontractors (e.g. equipment suppliers, etc). The PMU will take care that important cross-cutting issues such as gender, conflict-sensitivity and minority rights of disadvantaged population groups are considered during project implementation. The final GEF contributions to the individual investment projects will be determined in cooperation with the co-financiers and final price offers received. In case that individual investment projects should proof not to meet the established selection criterias (in particular economic viability) projects identified in the Output 3.1.2. will be considered. The following sub-activities will be implemented to ensure the implementation of the 1.6MW of sustainable energy- water management demonstration projects: Sub-Activity 3.1.2.1.1) Finalize the design and procurement documents of the RE and EE demonstration projects and negotiate the final cost-sharing and co-financiers and promoters The first sub-activity to be implemented for the implementation of the 1.6MW of demonstration projects is to finalise the feasibility studies and procurement documents (including technical specifications) for the selected projects; and the ESCO and financial model to be adopted for the project. Each of the selected demonstration projects has already a pre-feasibility study developed under the PPG stage. Based on the feasibility studies and procurement documents the final cost-sharing will be agreed between all financiers. This sub-activity will be carried out by the PMU in cooperation with the National and International RE & EE Experts. The assisting experts will be hired through public tender process. Sub-Activity 3.1.2.1.2) Provision of technical assistance for the implementation of the demonstration projects This sub-activity includes: • tendering/subcontracting of equipment and specialized services for the implementation of the RE and EE demonstration projects; and • day-to-day management of issues coming up during the transport, installation, commissioning and operation of the projects in cooperation with the co-financiers and the project promoters. The PMU will be responsible to oversee the implementation progress of the individual projects and will recommend disbursements of GEF resources upon achieved milestones and results. The PMU will coordinate closely with equipment suppliers and executing partners. Regular reporting on the progress of each demonstration project will be required and provided by the PMU to the Project Steering Committee (PSC). Activity 3.1.1.3. Monitoring and evaluation of the demonstration projects Continuous day-to-day monitoring of the implementation of the demonstration projects will be required and conducted by the project proponents by using agreed monitoring indicators (the project proponents and the PMU will agreed with project monitoring indicators, monitoring periodicity and reporting for each project). The PMU will monitor the project operation periodically (in the beginning every two months until month six and then every six months. The evaluation of the demonstration projects will be carried out by an Independent National Consultant/Evaluator. The PMU will prepare the Terms of Reference for the evaluation. Each project evaluation should follow the same reporting structure for this GEF/UNIDO project. This will include as a minimum: • Assessing the relevance, effectiveness, efficiency, impact and sustainability of the individual projects and respective financial mechanism adopted • Assessing the commercial operation of the project • Monitoring and verifying the energy generated and GHG emissions avoided directly due to the GEF/UNIDO project • Assessing the socio-economic impacts of the projects (by considering gender aspects) • Identifying faced challenges • Compiling lessons learnt Activity 3.1.1.4 Preparation of Case Studies and dissemination For each demonstration project a case study for dissemination and capacity building purposes will be prepared and disseminated in the Website of the Project. The lessons learned will provide valuable input for the policy development project component (PC1) of this GEF/UNIDO project. This activity will be of the PMU responsibility.

GEF6 CEO Endorsement /Approval Template-August2016

Output 3.1.2. Investment projects using ESCOs approach and tailored financial mechanism implemented to reach about 2MW of installed capacity Activity 3.1.2.1. Identification and implementation of further 2MW of sustainable energy-water nexus investment projects Once the financial mechanism and the ESCOs approach have been effectively demonstrated through the implementation of Activity 3.1.1.2, this activity will support the scaling up efforts through the identification and implementation of investment projects to reach about 2 MW of installed capacity. All projects implemented in PC3 (under Outputs 3.1.1 and 3.1.2) are investment projects. The difference is that the projects implemented in Output 3.1.1, called the demonstration projects, will be selected to be implemented having into consideration: (1) the demonstration of the use of varied sustainable energy technologies (RE and EE) in varied water management projects; (2) the adoption and advantages of using ESCOs approaches/models in the project design and implementation phases; and (3) to test the use of the financial mechanism defined and adopted in this GEF/UNIDO project. Also, as projects of Output 3.1.1 aim to be implemented in the first year and a half of the GEF/UNIDO project, they should be projects in a more advanced phase of the design and closer to financial closure at the PPG stage then the ones that are implemented through Output 3.1.2. The investment projects implemented through Output 3.1.2 will then benefit from the experiences gained in and mechanisms established for/with the demonstration projects implemented through Output 3.1.1. During the PPG stage a list/pipeline of sustainable energy-water management projects were identified. The ones remaining in the pipeline after the implementation of Activity 3.1.1.2, will be further developed and implemented during this activity and in Phase II of the project or in Phase III (after the end of the project). Out of the project pipeline, sustainable energy-water projects with a total capacity of at least 2MW will be selected by the Nexus Platform and/or Steering Committee to for implementation under this output. The potential pipeline includes the following projects: • Ribeira da Vinha 25kW PV plant for a Desalination Unit and 7kW PV pumping system for production of water and water pumping for irrigation of agricultural crops. Project promoted by Agrosoluções Ltd. Project located in São Vicente Island. • 12kW PV pumping system and efficiency improvement in water production on the well FST835 de Canto Grande, Ribeira de São Miguel, Santiago Island. Project promoted by São Miguel Municipality. • Terra Boa Promotion of the use of RE to improve water access in Sal Island. Project promoted by the Sal Municipality. • Desalination on the basis of EE (use of waste heat from ELECTRA power plants / AquaStill technology). Project promoted by XS2SOLAR. • Desalination plant 100% driven by RE (3.6kW PV system) in Monte Trigo, Santo Antão Island. Project promoted by Elemental Water Makers. • Wind and PV for electrification and water pumping in Ribeira dos Bodes and Ribeira Fria, Santo Antão Island. Project promoted by ADAD. • PV for water pumping for irrigation in Boa Vista Island. Project promoted by Boa Vista Municipality – Water and Energy Department. • PV for desalination plant in João Galego, Boa Vista Island. Project promoted by Boa Vista Municipality – Water and Energy Department. • “Mais Clima Praia”, located in Santiago Island. Project promoted by Praia Municipality • PV pump systems for Santa Cruz Municipality. Project promoted by Santa Cruz Municipality • 235kW Wind for desalination plant in Preguiça, São Nicolau Island. Project promoted by Ribeira Brava Municipality. • Ribeira Grande 6.25kW PV for submersive water pump, Santiago Island. Project promoted by Santiago City Municipality. • Desalination and water pumping in Brava Island. Project promoted by MAA-Brava and PCA-ANAS.

The listed pipeline projects have been identified and selected having the potential to be developed into bankable investment projects, ie: the financial/economic viability is the basis for the sustainability of Output 3.1.2. The PMU will ensure that the expected and planned buy-in of investors is for the reason of an economic viable business case and thus this principle will be applied throughout the below subactivities of Output 3.1.2.

GEF6 CEO Endorsement /Approval Template-August2016

The following sub-activities will be carried out to ensure the implementation of at least 2MW of sustainable energy- water management investment projects: Sub-Activity 3.1.2.1) Identification of potential sustainable energy-water investment project pipeline The identification of the sustainable energy-water investment project pipeline will be carried out throughout the duration of the GEF/UNIDO project (with stronger emphasis on Phase I) by the PMU in cooperation with the National and International RE & EE Experts and ECREEE. The projects submitted by project proponents through the project’s Website will be added to the pipeline. The selection of the projects to be implementing will follow the same criteria as outlined for the selection of the demonstration projects (Output 3.1.1). Within this activity it is envisioned that the pipeline will be further expanded, and more projects identified and analysed to be implemented. The list and used selection criteria will be available and disseminated through the project’s Website. Sub-Activity 3.1.2.2) Analysis of the technical and economic viability of the identified projects The potential sustainable energy-water management investment projects identified in Activity 3.2.1.1 will be further analysed in terms of technical and economic viability. This will be carried out through the use of already existing tools like RETScreen, Homer and any other software the National and International RE & EE Experts think appropriate. In this analysis, the viability of the projects will be assessed, including technical design, economics, environmental and social benefits (including gender inclusion) of each of the projects will be identified. Moreover, for each project possible sources of co-finance will be highlighted. This activity will be carried out by the National and International Experts (RE & EE and Finance), coordinated by the PMU. Sub-Activity 3.1.2.3) Selection of at least 2MW of sustainable energy-water management investment projects to be implemented Having in mind the results from the previous sub-activities and the scoring on the different project selection criteria, at least 2MW of sustainable energy-water management investment projects will be selected for implementation. The selection of these projects will be carried out in either one of the Nexus Platforms’ or Steering Committee’s meetings, following the recommendations of the PMU and of the National and International RE & EE experts. The selected projects to be implemented will be advertised on and promoted through the GEF/UNIDO Website. Sub-Activity 3.1.2.4) Finalize the design and procurement documents of the RE and EE demonstration projects and negotiate the final cost-sharing and co-financiers and promoters The first sub-activity to be implemented for the implementation of the 2.0MW investment projects is to finalise the feasibility studies and procurement documents (including technical specifications) for the selected projects; and the ESCO and financial model to be adopted for the project. If the projects don’t have feasibility assessment, support will be provided for its development. Based on the feasibility studies and procurement documents the final cost-sharing will be agreed between all financiers. This sub-activity will be carried out by the PMU in cooperation with the National and International RE & EE Experts. The assisting experts will be hired through public tender process. Sub-Activity 3.1.2.5) Provision of technical assistance for the implementation of the demonstration projects This sub-activity includes: • tendering/subcontracting of equipment and specialized services for the implementation of the RE and EE demonstration projects; and • day-to-day management of issues coming up during the transport, installation, commissioning and operation of the projects in cooperation with the co-financiers and the project promoters. The PMU will be responsible to oversee the implementation progress of the individual projects and will recommend disbursements of GEF resources upon achieved milestones and results. The PMU will coordinate closely with equipment suppliers and executing partners. The PMU will take care that important cross-cutting issues such as gender, conflict-sensitivity and minority rights of disadvantaged population groups are considered during project implementation. Regular reporting on the implementation/operation progress of each investment project will be required and provided to the Nexus Platform. The sub-activity will be executed by the PMU. Activity 3.1.2.2. Monitoring and evaluation of the investment projects Continuous day-to-day monitoring of the implementation of the investment projects will be required and conducted by the project proponents by using agreed monitoring indicators (the project proponents and the PMU will agreed with project monitoring indicators, monitoring periodicity and reporting for each project). The PMU will monitor the project operation periodically (in the GEF6 CEO Endorsement /Approval Template-August2016

beginning every two months until month six and then every six months). The evaluation of the investment projects will be carried out by an Independent National Consultant/Evaluator. The PMU will prepare the Terms of Reference for the evaluation. Each project evaluation should follow the same reporting structure for this GEF/UNIDO project. This will include as a minimum: • Assessing the relevance, effectiveness, efficiency, impact and sustainability of the individual projects and respective financial mechanism adopted • Assessing the commercial operation of the project • Monitoring and verifying the energy generated and GHG emissions avoided directly due to the GEF/UNIDO project • Assessing the socio-economic impacts of the projects (by considering gender aspects) • Identifying faced challenges • Compiling lessons learnt

Activity 3.1.2.3 Preparation of Case Studies and dissemination For each investment project a case study for dissemination and capacity building purposes will be prepared and disseminated in the Website of the Project. The lessons learned will provide valuable input for the policy development project component (PC1) of this GEF/UNIDO project. The PMU will be responsible for the execution of this activity.

Output 3.1.3. Workshop, seminars and exposure visits organized to discuss and promote public private investment partnerships to accelerate the deployment of sustainable energy-water nexus projects Activity 3.1.3.1. Workshop, seminars and exposure visits It is of utmost importance to integrate different market actors to achieve the greatest possible policy impacts and encourage innovative partnerships. As such, this activity will raise awareness among government officials, investors, financial institutions and other relevant stakeholders on the successful implementation of sustainable energy-water management investment projects under Outputs 3.1.1 and 3.1.2 and through information workshops, seminars and exposure visits to the actual sites. It is expected that at least 3 events that can take the form of a combination of workshops /seminars with exposure visits will be carried out throughout the project. It is expected that these will take place after the first year of the project and once at least some of the demonstration projects are implemented. The organization of the workshops / seminars with exposure visits will be of the responsibility of the PMU and project proponents. Activity 3.1.3.2. Promotion of public private investment partnerships to accelerate the deployment of sustainable energy- water nexus investment projects This activity aims to promote the development of investment partnerships with and between government institutions, energy services providers, financial institutions and other relevant stakeholders and donors such as ECREEE, AfDB etc. The development of multi-stakeholder partnerships will be pivotal for the mobilization of financial resources as well as the political support required to upscale energy-water nexus interventions. Public and Private Partnerships (PPPs) are an important way to fund and sustain infrastructure projects and public services, as its main purpose is to allocate the tasks and risks to those parties that are best able to manage them (i.e. the private sector). They can be quite complex and complicated to complete, with numerous conceptual and structural issues to resolve. Government around the world, due to lack of resources, look at involving the private sector to help in the supply of energy, water, sanitation, transportation, health and other services49. There is a general recognition that private sector partnerships may be able to deliver, operate, and maintain such services more efficiently than Governments alone. Thus, PPP involves a contract between a public-sector institution/authority and a private sector party, in which the private sector party provides public services (e.g. electricity / water supply) and assumes a substantial amount of the technical, financial and operating requirements. Depending on the PPP contract established, the cost for using the service can be borne exclusively by the service users or the government, or by both in a blend of these opposite approaches. Government contributions for a PPP may also be in kind (i.e. transfer of assets or land). Alternatively, the government may support a given project by providing favourable taxes,

49 Gallo, Joshua and Marques de Sá, Isabel; Strateguc Collaboration to Create Public-Private Partnerships, https://www.mcc.gov/resources/story/story-story-kin-apr-2015-strategic-collaboration-to-create-ppps GEF6 CEO Endorsement /Approval Template-August2016

revenue subsidies or other means. Typically, PPP schemes, involve the creation of a special-purpose company to develop, build, maintain, and operate a given project for a contracted period of time. The special-purpose company enters into a contract with the government and with subcontractors to build the facility/system and then operates and maintains it. The special-purpose company is the central administrative and operating entity that handles all contracts for funding and debt investors; construction and operation and maintenance contracts, as well as billing of the end users50. Cabo Verde has a policy framework in place for Public Private Partnership (PPPs) (Decree Law n. 63/2015 of 13 November51) which establishes the principles that should guide the decision-making process of public entities that will use PPPs to improve infrastructure and the provision of public services to users in the country52. In Cabo Verde a PPPs are defined as legal regimes that fall on some of the models of public contracts existing in the country’s’ legal system. Therefore, PPP is not a type of contract available to the public administration, but rather a legal regime, which as a "veil" that may or may not fall on a contract model provided for in the legislation53. As a scheme, the implementation of PPPs depends on some conditions54: • The PPP contractor is necessarily a public agency (public partner), and the other pole of the contract is necessarily occupied by a private party (private partner/company). • The PPP regime can be applied to contribute to the satisfaction of a public interest or service that cumulatively contemplates the following elements: the capital needed to implement the project comes from the private party, which receives from the public partner in exchange for the investments (construction phase) and the provision of services and maintenance of assets (operation phase), periodic payments through the duration of the contract; there is an effective risk transfer from the public partner to the private partner; and that involve activities of difficult execution through traditional models of public contracting, due to the high degree of specialization and technical complexity. It is important to refer that the PPP regime in place serves mainly for the realization of multiple of objectives, such as "construction of public works, acquisition of services and rental and acquisition of movable property". That is, under PPPs such scopes cannot be contracted in isolation but together. Therefore, the guideline is that the PPP regime is not used to "compete" with traditional contracting models, but rather to serve as a complementary public procurement option to traditional models55. Besides the typical PPP contracts, this policy framework states that certain types of privatizations are “compatible with the PPP regime”, namely: (i) concession and exploration of public institute, production facilities and other public means (as in the Decree- Law n.34/2005 of the 30 of May); (ii) the concession of public infrastructure or of the exploration of public resources (as in the Decree-Law n.34/2005 of the 30 of May); and the (iii) the sub concession, as allowed by the Decree-Law n.1/2004 of the 26 of September for the airport sector, and allowed by the Decree-Law n. 31/2015 of the 18 of May. The framework also created the Unit for Privatizations and PPP (UPPPP), that together with the sectorial ministries (and other entities involved in the contract) is the entity responsible for the coordination of the internal processes, as well as for the procurement, monitoring and management procedures. The PPP policy in place is supported by a Procedure Manual that describes and consolidated the different steps that should be taken to establish a PPP in the country.

50 Asian Development bank, Business Models to Realize the Potential of Renewable Energy and Energy Efficiency in the Greater Mekong Subregion, 2015, available at: https://www.adb.org/sites/default/files/publication/161889/business-models-renewable-energy-gms.pdf 51 Decree-Law n.63/2015 available at: http://www.anas.gov.cv/index.php/legislacao/legislacao-agua/26-portaria-n-57-2015-que-tipifica-as-zonas- balneares-avalia-e-determina-o-perfil-das-aguas-balneares/file. This Decree-Law revogates the Decree-Law n. 46/2005 of the 4th of July, through with PPP where first introduced in Cabo Verde. 52 Decree-law n. 63/2015 of 13 November (http://www.anas.gov.cv/index.php/legislacao/legislacao-agua/26-portaria-n-57-2015-que-tipifica-as- zonas-balneares-avalia-e-determina-o-perfil-das-aguas-balneares/file ); Policy Framework and Procedures Manual for the Implementation of Public Private Partnerships in Cabo Verde, 2016 (http://cvtradeinvest.com/wp-content/uploads/bsk-pdf-manager/2017/09/PPP-Manual-Policy- Framework-and-Procedures-Manual-for-the-Implementation-of-Public-Private-Partnerships-in-Cabo-Verde.pdf ) 53 Ibid 54 Ibid 55 Ibid GEF6 CEO Endorsement /Approval Template-August2016

The energy sector, and renewable energies in particular, is a target sector for PPP in Cabo Verde. The life-cycle of a PPP in Cabo Verde begins with a preliminary proposal of interest from a private entity and continues with the development of feasibility studies, and is concluded with tendering of the public contract and the management and monitoring of the contract56 (see Figure 4)

Management,Fi Audition and Unsolicited Pre-feasibility Feasibility Procedure for scalization and Public Prelimininary Proposal assessment Assessment Public Contract Monitoring of Consultation the Contract

FIGURE 4 LIFE CYCLE OF A PPP PROJECT IN CABO VERDE57.

The following are PPPs operating in Cabo Verde energy and/or water sectors: • Cabeólica S.A. is a RE generator that generates electricity from wind resources. Cabeólica SA, established in 2008 by the Government of Cabo Verde, ELECTRA and InfraCo Africa (the lead project developer) has a total installed capacity of 25.5 MW distributed among the islands of Santiago (9.35 MW), São Vicente (5.95 MW), Sal (7.65 MW) and Boavista (2.55 MW). Cabeólica was the first commercial scale PPP wind farm developed in the Sub-Saharan Africa and also the first Independent Power Producer (IPP) in Cabo Verde, and it has won recognition in the International Finance Cooperation Emerging Partnerships top ten PPPs in Africa 58. The goal of the PPP was the development, financing, construction, ownership and operation of the four wind farms referred. • Águas e Energia da Boavista (AEB): operates as a sub-concession of ELECTRA since 2011 providing public water and electricity service in Boavista Island, under an agreement with the Government of Cabo Verde and ELECTRA SARL (Decree-Law nº 26/2008). AEB’s contract is valid until 2036. AEB produces and distributes water and energy to hotels and households except in Bofareira and Povoação Velha, where the Municipal Chamber is responsible for electricity generation and distribution. 60% of AEB belongs to Sociedade de Desenvolvimento Turístico das Ilhas de Boavista e Maio, and the remaining 40% to Bocan, from Spain. • Águas de Porto Novo, AS (APN, SA): PPP between the Government of Cabo Verde, Porto Novo Municipality and Águas de Ponta Preta (APP) that has the corporate purpose of granting the concession for the design, construction and operation of a sea water desalination system (IDAM) in the City of Porto Novo. It also develops other business activities, such as: collection, treatment and purification of wastewater; recycling and reuse of purified water for purposes other than human consumption; and construction, production and commercialization of electricity through renewable and / or conventional resources that may prove necessary. The PPP was executed through a 30-year Build, Operate & Transfer (BOT) concession agreement (for construction of IDAM of 1000 m3/day and infrastructure operation) signed between the Cabo Verde Government and APN, SA and a “take or pay" contract for the purchase and sale of drinking water with a minimum of 600 m3 / day signed, between Porto Novo Municipality and APN, SA. APN activity is regulated by ARE. The experience resulting from the established PPP were used in the development of the new PPP framework in place in the country. According to the WB PPP knowledge Lab59, when considering PPPs in the water and energy sectors, it is important to understand the risks and opportunities. When considering the development of PPP in the water/energy sector, regardless of the scale and services being provided, it is necessary to:

o Understand the risks and opportunities involve in the sector;

56 Decree-law n. 63/2015 of 13 November; Policy Framework and Procedures Manual for the Implementation of Public Private Partnerships in Cabo Verde, 2016 (http://cvtradeinvest.com/wp-content/uploads/bsk-pdf-manager/2017/09/PPP-Manual-Policy-Framework-and-Procedures- Manual-for-the-Implementation-of-Public-Private-Partnerships-in-Cabo-Verde.pdf) 57 Policy Framework and Procedures Manual for the Implementation of Public Private Partnerships in Cabo Verde, 2016 (http://cvtradeinvest.com/wp-content/uploads/bsk-pdf-manager/2017/09/PPP-Manual-Policy-Framework-and-Procedures-Manual-for-the- Implementation-of-Public-Private-Partnerships-in-Cabo-Verde.pdf ) 58 http://www.africafc.org/What-We-Do/Projects/Cabelioca-Wind-Farm-Project.aspx 59 WB PPP Knowledge Lab: https://pppknowledgelab.org GEF6 CEO Endorsement /Approval Template-August2016

o Have an adequate institutional framework in place; o Have clarity in the definition of the objective of the project and the contribution that the private sector can realistic make to achieve the set objective; o Have in place high-quality oversight and commitment from the public sector, strong accountability mechanisms; and clear and consistent contractual arrangements. CVTradeInvest, is the country’s investment promotion and exports agency, focusing on the promotion, dissemination, facilitation and monitoring of investment opportunities in the country and export of goods and services produced in Cabo Verde60. In the sector of RE PPPs are highlighted as one of the main business opportunities. Moreover, the Government is available to negotiate PPP in several sectors and in the CVTradeInvest website there is a pipeline of more than 20 companies that the state wishes to privatize, restructure or explore under PPPs. During the consultations activities carried out in the PPG, discussions were held with CVTrandeInvest to identify synergies and cooperation modes under this project as well as promotion methods and activities that may foster the adoption of energy-water nexus projects/initiatives in Cabo Verde. Thus, this activity, due to its investment advertising and supporting nature, is expected to be implemented in partnership with CVTradeInvest. Thus, this activity aims at promotion investment in energy-water nexus areas through: • The development of an Energy-Water Nexus Infographic: this will contain information about the clear links between energy and water sectors, the objectives and main benefits from energy-water nexus projects/initiatives (with a special focus on the benefits for Cabo Verde and the SIDS); information on the GEF/UNIDO project and project pipeline developed under PC3. This will be disseminated through the Website created in PC1 and through the CVTradeInvest website (http://cvtradeinvest.com), so that it can reach and attract the biggest number of potential investors in the energy and water sectors. The drafting of the 1st Infographic will be carried out by the PMU at the beginning of the project, which should be compiled using the GEF/UNIDO Project Brochure and information on the Baseline Report and of this CEO Endorsement Request document. The Infographic should also include information on the project Website and how that can be used as a communication hub for questions / submission of ideas and project concepts to be developed under the GEF/UNIDO project. The Infographic should be updated at least three times, at the end of each year of the project implementation. CVTradeInvest will provide comments and guide the PMU on the Infographic template layout and main content. • Cooperation with CVTradeInvest: CVTradeInvest will advertise and send information about the project to potential project developers and investors interested in developing project in both the energy and water sectors. During the PPG phase CVTradeInvest presented the GEF/UNIDO project to one potential project developer which proposed a project that was integrated in the PC3 Project’s Pipeline. • Investment promotion meetings/forums: it is expected that through the duration of the GEF/UNIDO project at least two (2) investment promotion meetings will be organised in partnership with CVTradeInvest. The objective of these meetings is to present possible project investors to sustainable energy-water nexus projects, with the aim of providing information on the projects that can be developed in the country (and even exported to the ECOWAS region or other SIDS) and attracting investment into the Country. The sustainable energy project pipeline will be presented to possible investors during these meetings. The following table summarises the outputs and activities of PC3. Project Component 3 (PC3): Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems Outcome 3.1: Private investment in projects addressing the energy-water nexus increased – implementation of at least 3.6MW of sustainable energy-water investment projects PC3 aims to promote an environment conducive to the widespread market-based adoption of RE and EE technologies in water management systems with a special focus on desalination plants and water pumping systems. Output 3.1.1: ESCOs approach and tailored financial mechanism developed and used to support demonstration projects integrating RE and EE in water resource management systems to achieve around 1.6 MW of installed capacity Planned and Envisioned Activities Responsibility

60 http://cvtradeinvest.com/ GEF6 CEO Endorsement /Approval Template-August2016

Activity 3.1.1.1. Development of and ESCO approach and PMU (providing guidance and assistance to the Finance tailored financing mechanism to support the implementation of Experts), ANAS, ECREEE, ProEmpresa energy-water nexus investment projects Steering Committee or Nexus Platform (approving the demonstration/investment project’s financial mechanism) Activity 3.1.1.2. Identification and implementation of 1.6 MW of PMU sustainable energy-water nexus demonstration projects Activity 3.1.1.3. Monitoring and evaluation of the demonstration Project Proponents projects PMU Activity 3.1.1.4 Preparation of Case Studies and dissemination PMU Output 3.1.2: Investment projects using ESCOs approach and tailored financial mechanism implemented to reach about 2MW of installed capacity Planned and Envisioned Activities Responsibility Activity 3.1.2.1. Identification and implementation of further PMU 2MW of sustainable energy-water nexus investment projects ECREEE (cooperation in the identification of the project’s pipeline) Steering Committee or Nexus Platform (approving the demonstration/investment project’s financial mechanism) Activity 3.1.2.2. Monitoring and evaluation of the investment Project Proponents projects PMU Activity 3.1.2.3 Preparation of Case Studies and dissemination PMU Output 3.1.3: Workshop, seminars and exposure visits organized to discuss and promote public private investment partnerships to accelerate the deployment of sustainable energy-water nexus initiative Planned and Envisioned Activities Responsibility Activity 3.1.3.1. Workshop, seminars and exposure visits PMU Demonstration/Investment Project Proponents (participate in the organization of the exposure visits) Activity 3.1.3.2. Promotion of public private investment PMU partnerships to accelerate the deployment of sustainable energy- CVTradeInvest water nexus investment projects

Project Component 4 (PC4): Monitoring and evaluation The overall objective of PC4 is to ensure continuous monitoring and evaluation (M&E) of the implementation of the GEF/UNIDO project conducted in accordance with established GEF and UNIDO procedures and guidelines. This will be achieved through: • Establishment of Project Management Office (PMU) and Steering Committee (SC) • Establishment and implementation of an adequate and systematic monitoring, evaluation (M&E) and reporting of all project indicators following UNIDO and GEF procedures to ensure successful project implementation; • Timely and continuous dissemination of project activities and results through the Website established in PC1. The following are the two main outputs of PC4:

GEF6 CEO Endorsement /Approval Template-August2016

Output 4.1.1. Terminal evaluation executed Activity 4.1.1.1. Terminal evaluation The PMU will prepare the Terms of Reference (TORs) for the recruitment of an Independent Evaluator that will perform the terminal (final) evaluation of the project. Achievements made should be Achievements made up to this stage should be identified and compared against baseline and targets, impacts and sustainability of results assessed in order to evaluate the overall project performance during its implementation period. This evaluation should be carried out three months prior to the end of the project. Since this project falls under GEF CCM-1 Program 1 “Promote the timely development, demonstration, and financing of low- carbon technologies and mitigation options”, achieved greenhouse gas emissions reductions should be evaluated as well. This should be used using the GEF Climate Change Mitigation tool. Output 4.1.2. Project’s progress monitored, documented and recommended actions formulated Activity 4.1.2.1. M&E Framework design The first activity is to develop a detailed working plan for the execution of the project (schedule, roles and responsibilities, milestones, etc.). This plan should consist of all the necessary items to be applied during project execution and should be designed following GEF and UNIDO procedures. The plan should have a logical framework that captures the identified indicators per outcome and/or output. An indicator is a quantitative or qualitative factor or variable that provides a simple and reliable means to measure achievement, to reflect the changes connected to an intervention, or to help assess the performance of an activity. A “starting point” (e.g. value) for each indicator should be selected in order to allow for later comparison against achievements during evaluation stages. A proper M&E framework should consist of the following: • Monitoring process: it refers to the continuous process of collecting data on the agreed indicators to provide information on the extent of progress and achievements made. It involves the systemic collection of information and data as well as calculating specific indicators to evaluate the effectiveness of the activities implemented. The monitoring should be conducted following specific procedures to collect and manage information, data, and variables. Procedures that are already in place in the country to track variables should be taken into consideration and synergies with other on-going initiatives should be taken into consideration (for example, the SEforAll initiative). • Evaluation process: it refers to the action of assessing the achievements in comparison to the original baseline scenario (at any given moment during implementation) and to the expected targets. This will help the evaluator to understand if the objectives set for each indicator were met or not. This comparison enables the country to identify delays or deviations and to take corrective actions accordingly (e.g. modify targets or implementation strategies). Proper monitoring is vital for conducting a successful evaluation, which will aid to keep the initiative on track. A proper evaluation frequency should be selected in accordance with the type of activity under execution and the targets. Typical evaluation frequency is once a year. • Reporting process: refers to the systematic and timely provision of essential and useful information showing how Cabo Verde is progressing toward the achievement of the project’s goals. It should take place at periodic intervals and should result in the publication of a simple report indicating for the corresponding monitoring period which were the expected objectives and what was achieved, as well as any problems faced during monitoring in order to take the necessary corrective actions. The National Project Coordinator will be responsible for the design the M&E framework and to provide the necessary capacity building course to those involved in the implementation of the M&E framework. Activity 4.1.2.2. M&E Framework implementation The M&E will be applied as described in its design. Roles and responsibilities of the different actors involved in the application of the M&E Framework should be defined. The M&E plan will be reviewed and updated periodically basing on the results that are being achieved throughout project implementation. The PMU will be responsible for the day-to-day management, monitoring and evaluation of project activities as in the agreed M&E plan. The PMU will coordinate all project activities being carried out by project national and international experts and partners. The following table summarises the outputs and activities of PC4.

GEF6 CEO Endorsement /Approval Template-August2016

Project Component 4 (PC4): Monitoring and evaluation Outcome 4.1: Continuous monitoring and evaluation (M&E) of the implementation of the GEF/UNIDO project conducted in accordance with established GEF and UNIDO procedures and guidelines Project progress towards objectives continuously monitored and evaluated

Output 4.1.1: Terminal evaluation executed Planned and Envisioned Activities Responsibility Activity 4.1.1.1. Terminal evaluation International Independent Evaluator Output 4.1.2: Project’s progress monitored, documented and recommended actions formulated Planned and Envisioned Activities Responsibility Activity 4.1.2.1. M&E Framework design PMU Activity 4.1.2.2. M&E Framework Implemented PMU

4) INCREMENTAL/ADDITIONAL COST REASONING AND EXPECTED CONTRIBUTIONS FROM THE BASELINE, THE GEFTF, LDCF, SCCF, CBIT AND CO-FINANCING61 Due to Cabo Verde’s natural geography and desertic climate, water security has become one of the government’s major concerns. Desalination plants in urban areas and underground boreholes in rural areas have been used to secure access to freshwater even though they require large amounts of energy to operate. The high electricity costs associated with water pumping and desalination plants have been regarded as one of the main deterrents to advance water access in the country. Recently, the Government of Cabo Verde has been undertaking major efforts to increase the RE share in the energy mix and to promote EE practices in major consumers. Nevertheless, RE and EE have seldom been considered as key elements to improve water resources management. As imported fossil fuel prices remain high, the Government is slowly becoming aware that to improve the water production and distribution services, affordable energy as well as its optimal utilization are necessary. Consequently, it is expected that RE and EE will gradually be integrated in desalination plants and water pumping systems. Yet, the process is anticipated to be lengthy, costly, and cumbersome and lead by the public sector as there are still major barriers that need to be addressed. In order to facilitate and accelerate the market-based integration of RE and EE in water management systems, the proposed project will take a systematic approach combining technical and investment assistance to integrate RE and EE for water pumping systems in rural areas and desalination plants in urban areas overcoming current barriers through the coverage of the following incremental costs. For Component 1, GEF financing will support the integration of market-based energy-water nexus approach in relevant national policies and regulations and will create a national platform to promote a better coordination and a joint approach to overcome the challenges and take advantage of the opportunities of the energy-water nexus. The nexus approach is completely aligned with the country’s ambitious targets in RE and EE penetration as well as water accessibility set by the Government of Cabo Verde. Furthermore, the GEF financing will also promote gender equality and women’s empowerment by assessing how to better integrate gender dimensions in the implementation of energy-water nexus initiatives producing a direct impact in women’s lives. Presently, RE powered water pumping systems and desalination plants are few and technical knowledge for their management is restricted to few operators. Besides, the ESCOs market is still in the process of early development and establishment with very limited experience and expertise on how to identify, finance, implement and assess the risk of RE and EE projects related to water management. As such, Component 2 will use GEF funding to develop relevant training material and will provide extensive training to CERMI’s trainers to ensure that the knowledge transferred is used to develop a sustainable and sound knowledge base in Cabo

61 Further co-financing is expected to be mobilized from private sector entities and/or project beneficieries during project implementation after CEO endorsement in-line with the GEF Co-financing Policy GEF/C.46/09.

GEF6 CEO Endorsement /Approval Template-August2016

Verde. Under Component 3, GEF funding will enable the development of a business model and financial mechanism appropriate for the country’s current situation and targeted technologies. In this regard, GEF funding will be used to implement demonstration projects utilizing the energy business model and tailored financial mechanism enabling a transformational change in the market of RE and EE in water resources management. Finally, the GEF funding will promote the development of public-private investment partnerships to mitigate financial and political risks related to the integration of RE and EE in water pumping systems and desalination plants. It is expected that the energy-water nexus approach will provide useful lessons to other SIDSs that face similar energy and water challenges. The project will be co-financed by the Government of Cabo Verde through the Ministry of Agriculture and Environment, the Ministry of Economy and Employment, and the Municipalities. Besides, it is envisaged that private operators and financial institutions will also contribute financially to implement investment projects. In the absence of this project, the national market- based adoption of energy-water initiatives will not occur at the pace needed to overcome the current energy and water gap. Moreover, there is a risk of adopting inappropriate policies and disconnected approaches due to insufficient knowledge, competencies and cooperation on energy-water issues. Summarizing the above ambitions of the project, co-financing letters for the projects identified in Component 2 have been already obtained. For the pipeline projects already identified under Component 3 the GEF/UNIDO project will provide the necessary and planned technical cooperation services (guided and coordinated through the PMU and the Nexus Platform) leading to the preparation of bankable investment projects applying the water-energy nexus and ESCO approaches. The establishment of a structure – through this project - that invites stakeholders from different disciplines (public, private, financing sector, service providers, etc.) to cooperate on a regular basis and within a jointly developed policy and operational framework will leverage co- financing after/through the CEO endorsement.

5) GLOBAL ENVIRONMENTAL BENEFITS (GEFTF) AND/OR ADAPTATION BENEFITS (LDCF/SCCF) As per the GEF, the global environmental benefits in the Climate Change Mitigation focal area is the sustainable mitigation of the concentration of anthropogenic greenhouse gases (GHG) in the atmosphere. The project intervention will contribute to climate change mitigation since GHG would be reduced due to the replacement of diesel-fuelled systems with RE systems. GHG emissions in the form of CO2 (carbon dioxide) from diesel combustion (fossil energy resources) will be avoided or reduced. RE will be generated from solar, wind and ocean (wave) energy resources available in the country. GHG Emissions Reduction Estimate as Global Environmental Benefit The implementation of this project will generate direct and indirect GHG emissions reductions and avoidance. The estimate of emissions reductions was done following the Manual for Calculating GHG Benefits of GEF Projects: EE and RE Projects (April, 2008) as well as the CO2 Spreadsheet provided by GEF. Moreover, the 2006 Intergovernmental Panel on Climate Change (IPCC) Guidelines for Greenhouse Gas Inventories were used as reference. Direct Emissions Reduction: Part of the outputs of the project will be the implementation of RE project and the adoption of EE measures which will result in direct GHG emissions reductions during the project’s implementation phase. The direct GHG emission reductions are on a case by case scenario listed in Table 7.

GEF6 CEO Endorsement /Approval Template-August2016

TABLE 7: DIRECT GHG EMISSION REDUCTIONS: Project Direct GHG emissions Total reduction over ID Project Name lifetime Reductions (tCO2e/year) lifetime (tCO2)* (years) 1 WAVE2OTM in Praia Grande 5,242.1 25 104,843 2 MASCARA PV Solar Desalination Project 520.8 20 10,416 XS2SOLAR Desalination Plant with 300kW Retrofitted 3 369.4 15 5,540 NordTank Wind turbine XS2SOLAR Remodified 2-blade Wind turbine of 80 kW at 4 98.8 15 1,482 the Power and Desalination Plant of ELECTRA Salamansa PV Desalinator: 100% Autonomous PV 5 56.6 20 1,132 Desalination Plant Solar Pumping System for the Young Framers of the Casa do 6 33.3 20 666 Meio Introduction of Renewable Energy for Sustainability of the 7 62.8 20 1,256 Potable Water Production System in Porto Novo 8,9 e Photovoltaic Plants for Strengthening the Drinking Water 49.7 25 1,242 10 Supply System, Santo Antão Island TOTAL: 6,433.5 - 126,577

It is worth mentioning that additional GHG emissions reductions will be achieved after the Financial Mechanism is operative and further projects start to be implemented under PC3. The expected reductions from these are difficult to calculate on an ex-ante basis since data and information on potential projects to be undertaken is not sufficient at this stage. Table 8 shows the baseline and alternative scenarios for each case. TABLE 8: BASELINE AND ALTERNATIVE SCENARIOS OF DEMOSTRATION PROJECTS Alternative ID Project Name Baseline Reduction/Avoidance scenario Reduction of electricity Wave energy- Traditional grid-connected consumed from the grid for 1 WAVE2OTM in Praia Grande based desalination desalination plant the production of drinking plant water. Reduction of electricity Traditional grid-connected 100% PV consumed from the grid for 2 MASCARA PV Solar Desalination Project desalination plant desalination plant the production of drinking water. Reduction of the diesel 300kW wind XS2SOLAR Desalination Plant with 300kW Traditional diesel-based consumed for the 3 energy Retrofitted NordTank Wind turbine desalination plant production of drinking desalination plant water Reduction of the diesel XS2Solar Remodified 2-blade Wind turbine of Traditional diesel-based 80kW wind energy consumed for the 4 80 kW at the Power and Desalination Plant of desalination plant desalination plant production of drinking ELECTRA water Reduction of electricity Salamansa PV Desalinator: 100% Autonomous Traditional grid-connected 100% PV consumed from the grid for 5 PV Desalination Plant desalination plant desalination plant the production of drinking water. Electricity from the grid would Reduction of electricity Solar Pumping System for the Young Framers of be used to pump the water for PV plant for water consumed from the grid for 6 the Casa do Meio irrigation of the 30 parcels of pumping water pumping for land. irrigation. Reduction of the diesel Introduction of Renewable Energy for Traditional diesel-based PV plant for consumed for the 7 Sustainability of the Potable Water Production desalination plant desalination plant production of drinking System in Porto Novo water

GEF6 CEO Endorsement /Approval Template-August2016

Alternative ID Project Name Baseline Reduction/Avoidance scenario Photovoltaic Plants for Strengthening the Electricity from the grid would PV plants for Reduction of electricity 8,9 e Drinking Water Supply System, Santo Antão be used for drinking water drinking water consumed from the grid for 10 Island pumping. pumping drinking water pumping.

Assumptions made and data obtained to estimate emissions reductions on a case by case basis are included in the Pre-feasibility studies in Annex I. Table 9 shows the estimated projects indirect emission reductions TABLE 9: INDIRECT EMISSION REDUCTIONS Indirect bottom-up GHG ID Project Name emissions avoided Comments (tCO2equivalent) Replication factor: 3 This is a project that can be replicated in other 1 WAVE2OTM in Praia Grande 314,528 island of Cabo Verde and it is the first of its kind. Replication factor: 5 2 MASCARA PV Solar Desalination Project 52,081 The project can be replicated in other villages/ towns/municipalities in Cabo Verde Replication factor: 10 The replication factor was selected due to the XS2SOLAR Desalination Plant with 300kW 3 55,404 huge availability of wind resource and the fact Retrofitted NordTank Wind turbine that the project can be replicated in other islands of Cabo Verde. Replication factor: 10 XS2SOLAR Remodified 2-blade Wind turbine of The replication factor was selected due to the 4 80 kW at the Power and Desalination Plant of 14,821 huge availability of wind resource and the fact ELECTRA that the project can be replicated in other islands of Cabo Verde. Replication factor: 5 Salamansa PV Desalinator: 100% Autonomous 5 5,659 The project can be replicated in other villages/ PV Desalination Plant towns/municipalities in Cabo Verde Replication factor: 15 The replication factor was selected due to the Solar Pumping System for the Young Framers of 6 9,996 fact that this project can be easily replicated in the Casa do Meio other villages/ towns/municipalities in Cabo Verde. Replication factor: 5 Introduction of Renewable Energy for The project can be easily replicated in other 7 Sustainability of the Potable Water Production 6,278 desalination plants running on diesel or System in Porto Novo electricity in Cabo Verde. Replication factor: 15 Photovoltaic Plants for Strengthening the The replication factor was selected due to the 8,9 e Drinking Water Supply System, Santo Antão 18,631 fact that this project can be easily replicated in 10 Island other villages/ towns/municipalities in Cabo Verde. TOTAL: 477,398 -

Summarizing Tables 7 & 9 the expected direct, indirect and total CO2 reductions are:

Direct: 126,577 metric tons of CO2e Indirect: 477,398 metric tons of CO2e Total: 603,975 metric tons of CO2e

GEF6 CEO Endorsement /Approval Template-August2016

6) INNOVATIVENESS, SUSTAINABILITY AND POTENTIAL FOR SCALING UP. This GEF/UNIDO project proves its innovativeness, sustainability and scaling-up potential through its strategic components: Innovation: The innovativeness of this GEF/UNIDO project relies on its targeted technology as the integration of RE and EE in water management systems (with a special focus on desalination plants and water pumping systems) have been barely explored in the country. While the government of Cabo Verde is very proactive in the promotion of RE and EE, few efforts have been made to introduce RE and EE in the overall water resources management. Apart from targeting innovative technology for the country context, the project will analyse the current barriers which hinder the energy-water nexus initiatives. After the implementation of several pilot projects under the GEF 4 project “Promotion of Small-to- Medium scale RE projects in Cabo Verde,” it has been acknowledged that the co-financing of a significant portion of the project (normally up to 70%) has represented a big challenge for most local investors. As such, this project will design an energy service business model and a tailored financial mechanism to further support the nascent ESCOs sector and maximize the active involvement of the private sector promoting the market-based adoption of RE and EE in water management systems. Besides, by facilitating the development of public-private investment partnerships, interested public and private stakeholders – that would have been otherwise discouraged to adopt RE and EE technologies in water resources management systems due to large up-front investments, regulatory and institutional ambiguity as well as limited technical and energy management expertise – will be able to implement investment projects providing water services at a lower cost in urban and rural areas. Furthermore, the project is emphasizing on the broad integration of gender considerations into the project components. This will not only ensure the inclusive view on the problems to be targeted and addressed but will also ensure that the project directly contributes to the achievement of the Sustainable Development Goals (SDGs) beyond SDGs 7 & 9 as well as to the sustainability of the project as a whole. Sustainability: While the project outputs were developed focusing on the duration of the project, all project components are expected to continue beyond project closure ensuring their sustainability. For instance, in PC1 under Output 1.1.1, the project will establish a platform for different stakeholder to continually discuss issues related to the energy-water nexus and for project developers to submit their energy-water nexus projects and ask for TA while Output 1.1.3 will develop sound policy recommendations to be presented for formal adoption as national legislation. It is expected that once the project is completed, the established platform will keep promoting the continual discussion of energy-water nexus, provide TA services when requested and will develop additional policy and institutional recommendations, whenever deemed necessary. This is ensured by building the capacity of the platform host under the PC2 and in involving him in in the development and outcomes of all activities of PC1. Besides, after the implementation of capacity building activities under the GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde,” it has been acknowledged that in order to guarantee the sustainability of the knowledge generated a more institutionalized and systematic approach was necessary. To ensure this, the capacity building project component (PC2) under this GEF/UNIDO project: • Was designed together with CERMI and targets –among others–, CERMI staff, in order to guarantee knowledge institutionalization; • Was designed to have two training programmes that complement CERMI existing curriculum and that can be implemented in Cabo Verde as well as in the ECOWAS and PALOP after the completion of the project in line with CERMI business plan and the Government aspirations for the centre; • Will create sound expertise on RE based water resource management systems with a special focus on water pumping and desalination plants as well as on entrepreneurship and ESCOs’ establishment, operations and business model among CERMI’s staff and appointed staff from other institution directly related with the energy and water sectors through a train- the-trainers programme. • In addition, through Outputs 2.1.1 and 2.1.2 will develop the necessary training material to be used during the train-the- trainers programme as well as in the trainings of direct beneficiaries. It is expected that by enhancing CERMI’s expertise and the expertise of appointed people from other Cabo Verdean institutes operating in the energy and water sectors, the project ensures that the knowledge will be transferred continuously to beneficiaries and can continue to be transferred even after project completion.

GEF6 CEO Endorsement /Approval Template-August2016

In PC3, it is expected that the financial mechanism and ESCOs models adopted for the investment projects (implemented in Outputs 3.1.1 and 3.1.2) will continue to be used in sustainable energy-water nexus projects even after the project completion. For that capacity of the platform host staff (MEE/DNEIC/DSE) as well as of staff from energy and water institutions will be trained on PC2 on the application and adaptation of the ESCO and financial model developed in this GEF/UNIDO project. Moreover, the investment projects implemented in PC3 will be maintained and managed by the project proponents during and after the completion of the GEF/UNIDO project (project considered under PC3 have an average lifetime of around 20 years), guaranteeing in its way their individual sustainability. In that context – and in particular related to Output 3.1.2 – this GEF/UNIDO project will incorporate the close and continuos involvement of the project stakeholders (through and within the the Nexus Platform) into the project development cycle process of the portfolio projects. This will not only develop the respective capacities and skills but establish national ownership in the respective projects as well as in the application and use of the policy and institutional framework established in Cabo Verde. In addition, social sustainability will be strengthened due to the systematic gender mainstreaming throughout the project cycle. Scaling up: The project has a strong potential for scaling up as few desalination plants and only 10% of the water pumping systems have integrated RE technology and EE has been mainly being pursued in the building sector. Under the GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde,” the technical and financial feasibility of integrating RE in desalination plants and water pumping systems have been demonstrated through the implementation of pilot projects, some of which have already showed returns on the investment. Nevertheless, most pilots have been driven by public institutions. To fully achieve the high scaling-up potential, the active involvement of the private sector –business owners, commercial banks, ESCOs, pension funds, etc – is needed and can be leveraged by public contributions. As such, PC1, through Output 1.1.1 and Output 1.1.3, will promote a policy and institutional framework conducive to the promotion of energy-water nexus approach as well as the private sector involvement. Besides PC2, will create the required expertise and training material to train local energy entrepreneurs, financial institutions, business managers, etc developing the necessary set of skills needed to identify, finance, implement, manage risk, maintain etc. RE and EE projects associated with water management systems. The developed CERMI’s expertise on RE based water management system (with a special focus on water pumping systems and desalination plants) could be adapted/used to build capacity at a regional level (in ECOWAS and PALOP) by specialized regional organizations (e.g. ECREEE). Finally, under PC3 Output 3.1.1, an energy service business model and a tailored financial mechanism will be developed to encourage the active involvement of the private sector and the creation of an ESCO market that at the moment does not exist. Moreover, by supporting the scaling up efforts under Output 3.1.2 and by facilitating public private partnerships and awareness raising under Output 3.1.3, private investment in the energy-water initiatives is expected to increase significantly in the country.

A.2. Child Project? If this is a child project under a program, describe how the components contribute to the overall program impact. N/A A.3. Stakeholders. Identify key stakeholders and elaborate on how the key stakeholders engagement is incorporated in the preparation and implementation of the project. Do they include civil society organizations (yes /no )? and indigenous peoples (yes /no )? 62 The integration of RE and EE in water management system, such as in desalination plants in urban centers and water pumping systems in rural areas, requires an effective collaboration and participatory approach with the beneficiaries as their needs and past experiences as well as their ability and willingness to pay have to be properly considered. Stakeholder consultation and involvement is at the heart of the project preparation phase (PPG) as well as of project implementation phase. During the preparation of the project (PPG) During PPG Cabo Verdean and international stakeholders were engaged in the definition of the activities to be implemented in the project and in the identification of the demonstration/investment projects and analysis of their feasibility. This was carried out through: (i) face-to-face individual meetings with different stakeholders; (ii) workshops/meetings with larger number of stakeholders; and (iii) direct consultation by e-mail or phone or teleconference. These were carried out throughout the project

62 As per the GEF-6 Corporate Results Framework in the GEF Programming Directions and GEF-6 Gender Core Indicators in the Gender Equality Action Plan, provide information on these specific indicators on stakeholders (including civil society organization and indigenous peoples) and gender. GEF6 CEO Endorsement /Approval Template-August2016

duration by the International Consultant that went on field missions to Cabo Verde and by a National Consultant and Cabo Verde - UNIDO office manager, who were always present on the ground to ensure constant flow of information. The following were the stakeholders directly and indirectly involved in the project definition at PPG stage: • Public sector / Government Institution: Ministry of Economy and Employment (MEE)/ Nacional Directorate of Energy, Industry and Commerce (DNEIC, Direção Nacional da Energia, Indústria e Comércio) / Directorate of Energy Services (DSE, Direção dos Serviços de Energia); National Energy for Water and Sanitation (ANAS / Agência Nacional para a Água e Saneamento); Ministry of Agriculture and Environment (MAA) / Directorate General for Agriculture, Forestry and Livestock (DGASP, Direcção Geral da Agricultura, Silvicultura e Pecuária); GEF Focal Point / MAA/National Directorate of Environment (DNA – Direcção Nacional do Ambiente) Centre for Renewable Energy and Industrial Maintenance (CERMI); Economic Regulatory Agency (ARE / Agência de Regulação Económica); Special Projects Management Unit (UGPE) / Ministry of Finance; Cabo Verde TradeInvest (Investment Promotion Agency); National Association of the Cabo Verde Municipalities (ANMCV– Associação dos Municípios de Cabo Verde); Sotavento Chamber of Commerce (CCS – Câmara do Comércio do Sotavento); Instituto Cabo-Verdiano de Igualdade e Equidade de Género (ICIEG); Milennium Challenge Corporation (MCC); Câmara do Comércio Indústria e Serviços do Sotavento (CCISS); Municipalities (São Miguel; Sal; Maio; Boa Vista; São Vicente, Brava, Santiago, Praia, Ribeira Grande, Santa Cruz, Ribeira Brava), ICIEG • Donors/International Cooperation: United Nations Industrial Development Organization (UNIDO); ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE); UN Coordinator in Cabo Verde (UN); United Nations Development Programme (UNDP); UNDP/GEF Small Grants Programme (SGP); Lux Dev CV083 / DNEIC; Lux Dev CV082 / MAA; Spanish International Agency for Cooperation and Development (AECID); Portuguese Cooperation (PC) / Portugal Embassy; Food and Agriculture Organization (FAO); GIZ/ECREEE; UN Women; • Financial Institutions: ProEmpresa, Caixa Económica de Cabo Verde • Public and Private Partnerships (PPP): Cabeólica; Águas de Santiago (AdS), APN, SA • Private Sector: Resolute Marine, Águas de Ponta Preta (APP), Lobo Solar, GTEK, REPOWER, freelancers, University of Santiago, Agrosoluções Ltd, XS2SOLAR; Elemental Water Makers, MASCARA • Civil Society Organisations (CSO): Associação para Defesa do Ambiente e Desenvolvimento (ADAD), Solar Ambiente; Associação dos Jovens Agricultores da Zona Peri-Urbana de Porto Novo (AJAZPUPN), ADPM. A decsription and analysis of each of the mentioned and other Cabo Verdean energy-water nexus stakeholders is shown in the Baseline report (Annex H).

During project implementation The project execution will be undertaken through multiple contractual arrangements between UNIDO and national governmental entities and private operators. The following table summarises the roles of the different stakeholders that will be involved during project implementation.

Roles Stakeholders Project’s Main Executing MEE/DNEIC/DSE; MAA/DNA; CERMI; ANAS; ECREEE (please refer to section A.6, as well as Annex H). Partners Other Stakeholder Partners Local associations, private sector companies institutions and NGOs such as ADAD, CCS, ProEmpresa, FAO, ICIEG and UN Women have already agreed and showed their intention to play a role as partners in the implementation of sustainable energy-water nexus investment projects and capacity building. Bilateral donor partners, local and development banks as well as project developers and investors are important stakeholders when it comes to the implementation of demonstration projects and their subsequent scaling-up. Strategic Partners Resolute Marine, MASCARA, XS2Solar, Elemental Water Makers, ADPM, APN SA and the Municipality of Ribeira Grande de Santo Antão are the demonstration project proponents. ICIEG and UN Women will have a crucial role in the development and implementation of Output 1.1.2 and ensuring that gender is mainstreamed into all project components/activities. ProEmpresa and CCS will have an important role in the generation of knowledge and participation in the capacity building activities. In addition, gender focal points of stakeholders as well as women and associations that GEF6 CEO Endorsement /Approval Template-August2016

promote gender equality and the empowerment of women will be involved. Through their regular engagement the project will also ensure that gender perspectives are integrated throughout project activities. Other Stakeholders All stakeholders already contacted at PPG stage, plus, other: public and private institutions, market players and enablers, international cooperation, rural associations, financial institutions interested in the development of sustainable energy-water nexus projects, Cabo Verde citizens. Stakeholder participation in the project activities will be recorded in registries, newsletters, newsflash etc. This will be important to measure the key performance indicators of the project during project execution. A more detailed description of the roles of the different stakeholders during the project implementation is presented below in section A.6. Institutional Arrangement and Coordination.

A.4. Gender Equality and Women's Empowerment. Elaborate on how gender equality and women’s empowerment issues are mainstreamed into the project implementation and monitoring, taking into account the differences, needs, roles and priorities of women and men. In addition, 1) did the project conduct a gender analysis during project preparation (yes /no )?; 2) did the project incorporate a gender responsive project results framework, including sex-disaggregated indicators (yes /no )?; and 3) what is the share of women and men direct beneficiaries (women 40%, men 60%)? 63 Gender equality and the empowerment of women have a significant positive impact on sustained economic growth and inclusive development, which are key drivers of poverty alleviation and social progress. The commitment of UNIDO towards gender equality and women’s empowerment is demonstrated in its policy on Gender Equality and the Empowerment of Women (2015), which provides overall guidelines for establishing a gender mainstreaming strategy. Moreover, UNIDO has developed an operational energy-gender guide to support gender mainstreaming of its sustainable energy initiatives. UNIDO recognizes that energy interventions are expected to have an impact on people and are, therefore, not gender-neutral. In fact, due to diverging needs and rights on energy consumption and production women and men are expected to be affected differently by the project. In this regard, the Government of Cabo Verde is determined to reduce rural poverty levels by increasing employment opportunities in the rural areas and supporting the establishment of a stronger economic base to sustain rural livelihood systems with a focus on agriculture, agri-businesses, livestock and fisheries. To do so, the promotion of gender equality and mainstreaming are particularly relevant for rural areas in Cabo Verde. There is a manifest gender bias in the level of poverty (56% of poor households, mainly concentrated in rural areas, are headed by women), the level of education (68% of rural women are literate as opposed to 83% of rural men), and the traditional division of productive and reproductive work. In rural areas, women are responsible for provision of water for the family. As such, women and children have to walk long distances to fetch water from boreholes which are often dry or abandoned forcing them to walk further. Apart from the serious long-term health impacts, this traditional role exposes women to violence, and prohibits them to fully engage in other productive or educational activities. This situation has already had negative impacts in several sectors including agriculture, agri-business, sanitation, etc. perpetuating the current levels of rural poverty. By integrating RE and EE in water resources management projects (as desalination plants and water pumping systems), the project will reduce the production costs of water increasing its affordability in urban and rural areas, respectively. Besides by lowering the energy costs, new investment opportunities will derive to expand the water production base and therefore, its accessibility. The project will seek to integrate RE not only in operating water pumping systems but in abandoned or planned boreholes directly supporting the government target of reducing the travel from household to boreholes to less than 10 minutes. As such, water collectors will be able to reallocate their time and energy towards other productive activities enabling rural households to climb out of poverty through sustainable means. This GEF/UNIDO project has been categorized as “Significant Gender Mainstreaming” as gender equality and/or women’s empowerment is a cross-cutting key result of the project, and more than 50% of the project outputs have activities promoting gender equality and/or the empowerment of women. In fact, the project will set an example in mainstreaming gender aspects in energy- water nexus initiatives. To do so, Output 1.1.2 will conduct a comprehensive assessment on how to integrate the gender dimension in the sustainable energy-water nexus initiatives and policies development. By doing so, the project acknowledges gender differences in the provision of water and energy and the need to integrate women empowerment in climate friendly initiatives in line with GEF 6 Strategic programming.

63 Same as footnote 8 above. GEF6 CEO Endorsement /Approval Template-August2016

To mainstream gender into this project, the baseline analysis carried out at PPG phase identified entry points for defining gender- responsive project outcomes, outputs as well as related activities (such as the Output 1.1.2). The gender analysis during PPG identified the specific circumstances of women and youth, and provided a basis on how the priorities and needs of these groups are to be integrated in the implementation of the project. During the PPG phase, UNIDO ensured that the relevant gender dimensions were considered, and the project log-frame was developed to reflect key gender dimensions of the respective outputs, activities, indicators and targets. Guiding principle of the project will be to ensure that both women and men are provided equal opportunities to access, participate in, and benefit from the project. In practical terms: • At the onset, it is envisaged that all activities under this project are targeted to have at least 40% beneficiaries or service providers being women and youth; • under its PC1, the GEF/UNIDO project will ensure that the regulations developed are gender sensitive, and it even includes Output 1.1.2 in which recommendations on how to integrate the gender dimensions into energy-water initiatives will be put forward and expect to be adopted; • Efforts will be made to promote participation of women in the Nexus Platform and in the Legal and Regulatory Framework Workshops (PC1). The target for the PC1 is to have at least 40% of women in the Nexus Platform and 40% of women participating in the Legal and Regulatory Framework Workshops. • Efforts will be made to promote participation of women in the training activities (PC2), both at managerial and technical levels, as participants, trainers and facilitators. For the training component, the project targets at least 40% of those to be trained will be women. • Gender-sensitive recruitment will be practiced at all levels where possible, especially in selection of project staff. Gender responsive TORs will be used to mainstream gender in the activities of consultants and experts. In cases where the project does not have direct influence, gender-sensitive recruitment will be encouraged. Furthermore, whenever possible existing staff will be trained and their awareness raised regarding gender issues. • All decision-making processes will consider gender dimensions. At project management level, PSC meetings will invite observers to ensure that gender dimensions are fairly taken into account. Also, at the level of project activity implementation, efforts will be made to consult with stakeholders focusing on gender equality and women’s empowerment issues. This is especially relevant in policy review and formulation. • When data-collection or assessments are conducted as part of the project implementation, gender dimensions will be considered. This can include sex-disaggregated data collection, performing gender analysis as part of Environmental and Social Impact Assessments (ESIAs), etc. For instance, during the PPG stage, on the identification/characterisation of demonstration projects gender was considered and information was collected on disaggregated indicators whenever possible (e.g. % of women/men working as framers / if women and youth are expected to be involved I project implementation and operation). In sum, the project was designed to acknowledge the differences of energy-water nexus project’s impacts considering distribution of economic activities and social roles between women and men in rural areas of Cabo Verde, in line with GEF 6 Programming Strategy. A.5 Risk. Elaborate on indicated risks, including climate change, potential social and environmental risks that might prevent the project objectives from being achieved, and, if possible, the proposed measures that address these risks at the time of project implementation. (table format acceptable):

Impact on Risks Likelihood Risk Description and Mitigation Actions the Project 1. Proposed High Low There may be some Government reluctance in integrating and articulating the project findings strategy for into national policy. The GEF/UNIDO project has been developed based on the request from addressing the the Government of Cabo Verde which has expressed its willingness to deliver an action plan energy-water for the deployment of RE and EE technologies in water management infrastructure. Besides nexus is not under Output 1.1.1, the project will establish a national platform composed of a Discussion articulated to the Platform and an Internet Platform to continuously discuss the energy-water nexus among key national policy stakeholders. As such, the recommended strategy derived from these discussions will have a high level of ownership and therefore is expected to be articulated to the national policy. Probability: Very low. Mitigation Measures:

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Impact on Risks Likelihood Risk Description and Mitigation Actions the Project The project integrates activities to provide support to the integration of the findings on national strategies. the GEF/UNIDO project Output 1.1.1 will establish a national platform (Nexus Platform) to continuously discuss the energy-water nexus among key stakeholders and to make information available on the activities and progress achieved by the different project components to the interested stakeholders and the public in general (projectc’s Website). The project has already identified partner public institutions and will ensure that their representatives provide full support throughout the project implementation and beyond. 2. RE systems are Moderate Low Markets of RE systems for power generation are mature enough that technology is almost not technically standardized and prices are highly predictable. There are already experiences in the country in viable in water RE stand-alone systems and learning from their models will contribute to identify required management and technologies. The involvement of beneficiaries and financial institutions while developing the the business business model will ensure that their needs are fairly taken into account. model proposed Probability: Low does not allow Mitigation Measures: beneficiaries to invest in the The GEF/UNIDO project actively seeks to promote systems that have been promoted in the technology country and by UNIDO in similar environments and countries. The project also integrates in PC2 training programmes to establish the required skills to provide operation and maintenance services for these types of technologies. Moreover, the demonstration projects selected encompass and pay a great attention to the integration and demonstration of operation and maintenance activities. Moreover, under PC3, operation and maintenance support will be integrated into the financial mechanism to mitigate any potential technology risk. ESCOs models to ensure these services will be considered in the implemented projects as needed. 3. Delay in Moderate Low There is a technical risk associated with the demonstration projects due to reduced experience commissioning of in the country with the implementation of energy-water nexus projects. demonstration There are no noteworthy technical risks associated with the policy measures and capacity and replication building activities proposed by the GEF/UNIDO project. All of them are well proven projects and interventions, tested by national experiences and in many other countries. availability of Probability: low. results Mitigation Measures: Execution of activities to be implemented under PC3 will be carried out with the support of international experts/companies with demonstrated and successful past experience. Only mature and proven small to medium scale RE technologies are being proposed to be installed as demonstration projects. Capacity building and enabling activities will pay special attention to further defining the existing baseline in order to develop effective tailored and well-targeted training programmes and curricula. The status of projects will be regularly reviewed and any necessary corrective steps will be promptly taken. Demonstration project results and lessons learnt will be widely disseminated. 4. Sector Moderate Very Low Due to the lack of information and awareness in sustainable energy-water nexus initiatives, stakeholders do there is a risk that there is not active participation from stakeholders. Although the PPG phase not participate/ revealed that Cabo Verde public and private stakeholders are very engaged in the project the engage actively GEF/UNIDO project included actions/measures to prevent/address this barrier. In addition, in the project the very high cost of energy in water production in the country means that organizations are looking for and considering new alternatives such as RE. During the PPG stage, there has been a strong involvement of the sector stakeholders and participants have been involved in the activities by providing feedback and information that has been crucial for the project development. Probability: Low. During the PPG phase, there has been a very strong level of stakeholder’ engagement in the project: high number of participants in the developed events, a high number of meetings conducted and requested from stakeholders; high number of project ideas/concepts submitted for analysis and implementation under PC3, etc.

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Impact on Risks Likelihood Risk Description and Mitigation Actions the Project Mitigation Measures: The Project Website that will be established under Output 1.1.1 will ensure that information on the energy-water initiatives and on the project activities, progress and project results are disseminated. Stakeholders will be consulted/involved during the implementation of the project activities. PC1 contemplates the execution of 3 workshops to present the findings of PC1 and update stakeholders on the project/progress. PC2 will build the capacity of stakeholders in the areas of RE and EE applied to water resource management systems and in entrepreneurships’ and ESCOs. PC3 will develop and ESCO model and implement sustainable energy-water nexus projects with public and private institutions in the country. A well-structured national results dissemination campaign demonstrating the viability of the demonstration projects and ESCO models adopted and outlining the opportunities during project implementation combined with an active dialogue and involvement of associations at the national and local level during the whole project duration will ensure the desired stakeholder response to the project 5. Reluctance or Low Very Low There could be some reluctance against, or lack of interest in the project activities from lack of interest in stakeholders, especially with regard to the active promotion of gender equality. There could be the project also low participation of female candidates to deliver support services due to lack of interest, activities from inadequate project activity or not enough candidates to engage in planned activities. stakeholders Probability: Low. The project activities have been designed to foster women participation and regarding the integration. The project integrated an Output focused on the provision of recommendation on active promotion mainstreaming gender in energy-water nexus activities. The selected demonstration projects of gender integrate a high level of participation of women in the projects activities. equality Mitigation Measures: A thorough gender responsive communication strategy that will ensure stakeholders involvement at all levels, with special regard to involving women and men, as well as, CSOs and NGOs promoting Gender Equality and the Empowerment of Women (GEEW), and the inclusion of ICIEG and UN Women in the development of some of the activities in the project will ensure the desire women engagement in the project activities. The demonstration projects also integrate mitigation measures to promote gender equality, create a culture of mutual acceptance, and maximize the potential contribution of the project to improving gender mainstreaming in the energy field. Gender specific targets and indicators have been established for the different project activities in the Projects Result Framework. 6. Finance Moderate Low The project will start by prospecting the financial institutions represented in the country on institutions do their willingness to participate. Recently the number of those institutions has grown at both not partner in national and local levels. Also, there has been a series of financing instruments that have been business models or are being set up in the country of which energy-water nexus project activities can make use developed for of (examples: EREF, FASA, 3 Pros etc). The GEF grant will contribute to lower the risks beneficiary’s foreseen by many finance institutions by providing a guarantee to the prospective loans. access to Furthermore, financial institutions will be encourage to participate in the platform established financing under Output 1.1.1. and will be invited to attend specialized seminars and exposure visits under Output 3.1.3 to raise awareness on the technical and financial feasibility of RE and EE in water management systems. As such, it is expected that with clear policy mechanisms as well as increased knowledge, the risk of investing in RE and EE projects will decrease. Probability: Low Mitigation Measures: Early dialogue with grant/funds/financial providers will be initiated. The financial mechanism will be fully established, having into account the financial instruments existent in the country, which will enable the access to finance for small scale promoters at affordable interest rates. One of the key advantages to invest in RE is the offset of either grid electricity or diesel fuel – both of which are very expensive. In fact a big percentage of the cost of the water in Cabo Verde is related to the necessary use of energy for desalination and/or water pumping. As part of the training in PC2 life cycle analysis will be taught to show the lifetime benefits of RE GEF6 CEO Endorsement /Approval Template-August2016

Impact on Risks Likelihood Risk Description and Mitigation Actions the Project projects, particularly in a volatile fossil fuel market. Moreover, as part of PC1 a study will be carried out to demonstrate the impact on the water production costs of the use of RE instead of traditional fuels (grid electricity/diesel). Demonstrating these benefits is expected to lead to further investment in RE projects associated with water resource management infrastructure. For the scale-up of demonstration projects additional technical assistance will be provided to help the projects take off the ground. Training will also be provided to local financial institutions so that they fully understand the risks and benefits of RE projects and the establishment of ESCO and provide appropriate financial mechanisms for both. 7. Low prices of Moderate Low The decision to invest in integrated RE systems by industries will be based on cost savings oil / continued opportunity. In the recent past, the price of oil has been varying a lot: in between 2013 and low prices of oil 2016 the price of the barrel of oil dropped drastically from around 110USD/barrel to values make RE projects below 50 USD/barrel and from 2016 to 2017 the price of the barrel of oil has been increasing and business not to values between 60 - 70USD/barrel64. According to information from the EIA between now viable and 2050 the price of the barrel of oil is supposed to increase to values between 110- 125USD/barrel65. The tendency of the last few year could make some of the industries, farmers, project proponents no longer interested to invest in RE systems when the price of oil, and therefore diesel, decreases. Probability Low Mitigation Measures: The criteria used on the project to show the attractiveness of RE systems do not only focus on cost savings but include other aspects such as energy independence and reliability of supply, as well as, local and global environmental benefits. In all projects to be implemented under PC3 an analysis of the cost of the RE vs conventional energy system will be undertaken. Moreover, in PC1 the impact on the water production cost from the shift from traditional fuels to RE will be analysed. 8. Negative Low Low The interventions under this project will comply with the requisite national environmental impacts of safeguards that include the ESIAs. All impacts will be assessed, and corrective measures taken project activities whenever necessary. During the PPG phase, an Environmental and Social Management Plan on local (ESMP) (Annex L) was developed to guarantee that environmental and social elements are communities’ e.g. integrated into the project design. This Plan was carried out in close consultation with relevant decrease of stakeholders including governmental and civil society organizations as well as the private revenues from sector in line with GEF and UNIDO policy. sales of diesel Probability: Low intended for Mitigation Measures: water pumping systems ESMP developed. This plan will be implemented through the implementation of the GEF/UNIDO project. In all project implemented in PC3 the environmental and social impacts will be identified and corrective/mitigation measures appointed to be implemented. 9. Climate Low Moderate Climate Risk Assessment tools will be used to assess the vulnarebility of all the projects to change risks / ensure that potential impacts of climate variability and change are fully integrated into the Water supply project design. This will include the thorow selection of project sites in order to avoid especially ground devastation through eg flooding or marine flash floods. water could be During the project implementation as well as during the scaling-up phase continuous climate affected by change analysis will be performed and if necessary mitigation strategies developed. climate variability

64 Information extracted from: http://www.infomine.com/investment/metal-prices/crude-oil/5-year/ 65 US Energy Information Administration (EIA), Evolution up until 2050 of the barrel of oil cost: https://www.eia.gov/outlooks/aeo/data/browser/#/?id=12-AEO2018&cases=ref2018&sourcekey=0 GEF6 CEO Endorsement /Approval Template-August2016

Impact on Risks Likelihood Risk Description and Mitigation Actions the Project 10. Social and Moderate Moderate There could be a risk of resistance against the involvement of women or activities that Gender Risk promote GEEW. Or there could be a lack of interest in, the project activities from stakeholders, especially with regard to the active promotion of gender equality. Low participation rates of suitable female candidates due to lack of interest, inadequate project activity or missing qualified female population within engineering sector.

Mitigation measures: To mitigate this risk the project will pursue thorough and gender responsive communication showing the benefits of gender equality for both women and men, and ensure stakeholder involvement at all levels, with special regard to involving both women and men, as well as CSOs and NGOs promoting GEEW, and gender experts. This shall mitigate social and gender related risks, promote gender equality, create a culture of mutual acceptance and understanding, and maximize the potential contribution of the project to improving gender equality in the energy field. To attract qualified female candidates to the project, adequate and gender responsive communication strategy will be carried out by reaching out to women’s groups and associations, while also making trainings and workshops accessible for women, e.g. by providing safe transport, offering childcare, offering trainings at suitable times for women when children are in school and day-care, etc. If necessary and in the scope of the project additional bridging courses for women will be considered, developed and implemented to empower women.

A.6. Institutional Arrangement and Coordination. Describe the institutional arrangement for project implementation. Elaborate on the planned coordination with other relevant GEF-financed projects and other initiatives. Institutional Arrangement and Coordination

GEF Implementing Agency: UNIDO is the only GEF Implementing Agency involved in this project and no specific arrangements with other GEF Agencies are required. As the GEF implementing agency, UNIDO will maintain the overall oversight on the project implementation, manage the overall project budget and supervise the project execution. In addition, upon request of the government, UNIDO will provide execution support for the procurement of goods and services, as well as recruitment of experts. Full or partial title and ownership of equipment purchased under the project may be transferred to national counterparts and/or project beneficiaries during the project implementation as deemed appropriate by the UNIDO Project Manager in consultation with project stakeholders. Main execution partners: UNIDO will oversee the implementation of the project and will be represented by the UNIDO Project Manager in the Project Steering Committee (PSC). The main executing partner will be MEE/DNEIC/DSE. MAA and ANAS will be other execution partners. All executing partners will be responsible for, amongst others, coordination and mobilization of other stakeholders to be involved in the project. ECREEE (as has been the case in previous GEF4 project) will be supporting the project by being contracted as executing agency. Through the mentioned GEF4 project ECREEE is already fully aware of GEF reporting requirements. ECREEE has also been advised on the applicable contracting modalities etc. Furthermore, UNIDO’s procurement and finance departments have trained ECREEE on the respective modules of UNIDO’s ERP-System (SAP). Thus ECREEE is already fully capacitized and will handle the necessary executing procedures, such as subcontracts with the 10 identified demonstration projects under output 3.1.1 (10 individual subcontracts) as well as planned portfolio projects under output 3.1.2.

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Other stakeholder partners: Several organisations will be engaged at different stages of GEF/UNIDO project execution in order to provide and/or share specific experiences and knowledge and to participate in the GEF/UNIDO project’s activities: • Local associations, private sector companies’, institutions and NGOs such as ADAD, CCS, ProEmpresa, FAO, ICIEG and UN Women have already agreed and showed their intention to play a role as executing partners in the implementation of sustainable energy-water nexus investment projects and capacity building. Upon the endorsement of the project, the subsequent set-up of the PMU and PSC and the detailed work-programme prepared the project will establish cooperation agreement with FAO and UN Women through Inter-Agency-Agreements (IAA). • Bilateral donor partners, local and development banks as well as project developers and investors are important stakeholders when it comes to the implementation of demonstrations projects and subsequent scaling-up. Project Management Set-up Main Activities to be conducted Responsibility of / stakeholders involved 0) Ensure the implementation of the project UNIDO MEE/DNEIC/DSE; MAA; CERMI; ANAS; ECREEE; 1) Convene the Project Steering Committee (PSC) responsible for ICIEG; MNMCV; CCS, ProEmpresa project coordination and execution Steering Committee 2) Selection of the National Project Coordinator (NPC) Steering Committee 3) Establishment of a Project Management Office (PMU) and selection of members PMU – National Project Coordinator 4) Day to day coordination, management and monitoring of all project activities PMU – National Project Coordinator 5) Engagement of Strategic Partners when necessary

It is important to refer that the Government envisages to create the National Institute for Industry and Energy (NIIE). If this institution is created during the project, it is envisaged that it will be involved in all Outputs/activities as the MEE/DNEIC/DSE. The project will be managed at two different levels: • Institutional level • Project level Each level implies the involvement of different stakeholders who are engaged in the execution of the project and have different responsibilities and/or share several activities. At institutional level, the most important responsible party of the project will be MEE/DNEIC/DSE, who also plays the role of the Project Steering Committee’s chairperson. He/she will be responsible for coordinating the efforts of each government body (ministries, directorates, etc. – “project executing counterparts”) with a view to achieving the objective of the project at national level. The PMU (Project Management Unit) will coordinate the specific activities at project level and will monitor the fulfilment of each individual milestone. The Figure 5 shows schematically how the stakeholders relate with each other in the two levels:

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Funding Partner The Global Environment Facility (GEF)

Implementing Agency UNIDO

Project Execution

Project Steering Committee

Chair: MEE/DNEIC/DSE Members: UNIDO MAA/DNA, MAA/DGASP,

ANAS, ARE, ProEmpresa CERMI, ICIEG, ECREEE, CCS, MNMCV

Project Management Unit (PMU) Lead Executing National Project Coordinator (NPC) Agency Private Sector, NGOs (ADAD, CCS, CCS, NGOs (ADAD, Sector, , Private Project Assistant MEE/DNEIC/DSE etc.) Municipalities, international organizations and bilateral donors donors and bilateral organizations Local Experts CSOs

FIGURE 5: PROJECT IMPLEMENTATION ARRANGEMENTS

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Project Steering Committee (PSC): The PSC is composed of the Ministerial directorates (MEE/DNEIC/DSE, MAA/DNA, MAA/DGASP), ANAS, ARE, CERMI, ICIEG, ECREEE, MNMCV, CCS, ProEmpresa and UNIDO. The local representative of UNIDO will act as the focal point and project manager of the project, and he/she will be responsible for the daily project management, monitoring of activities and planning, making sure that everything flows as scheduled. The PSC will be chaired and hosted by the MEE/DNEIC/DSE and will meet on a biannual basis. The responsibilities of the Steering Committee include: • Revision and approval of annual work plans; • Revision and approval of annual GEF reporting; • Revision and approval of annual budgets; • Monitoring of Project progress; • Providing guidance on strategic issues and activities; • Supervise the PMU The PMU will be hosted at the MEE/DNEIC/DSE. As already mentioned, the PMU will be responsible for the project at local level and will be the main point of contact for government institutions and organisations. The PMU will also be responsible for elaborating a Work Plan (POA). All PMU members will be either national consultants (Cabo Verde) or seconded from the national counterparts (ministries’ staff), unless otherwise agreed, will be based in Cabo Verde, and shall satisfy the selection criteria described in the Terms of Reference (TOR). The Project’s GEF and co-financing resources foresee the recruitment of a full-time National Project Coordinator (NPC), a part- time National Project Assistance (NPA) and part-time national experts or specialists (see Annex D: Output Based Budget for the GEF Grant). They will be hired under Individual Service Agreement (ISA) and their recruitment will be done according to the relevant UNIDO’s rules and regulations. Secretarial support to the PMU will be seconded by the Government of Cabo Verde. As per GEF guidelines the salary of seconded staff cannot be charged to the projects management costs (PMC). PMU members shall have the capabilities to coordinate, evaluate and monitor project-related activities as well as background on RE and EE, knowledge of the local language (Portuguese) and English, management capacities, etc. The specific capabilities, experience and level of knowledge of each mentioned item will be defined by the PSC at the time of selecting the staff needed for a certain position to be filled within the PMU or activity to be carried out. The PMU will be responsible for coordinating the communication and dissemination of the project results, lessons learned and success stories that are important for the sustainable and future development of the involved market sectors in Cabo Verde. Strategic Partners: Several organisations will be engaged at different stages of project execution in order to provide and/or share specific experiences and knowledge and to participate in the project’s activities. The demonstration projects will be constructed under the responsibility of the respective project proponents (Resolute Marine, MASCARA, XS2Solar, Elemental Water Makers, ADPM, APN SA and the Municipality of Ribeira Grande de Santo Antão). The replication projects will be identified through the course of the project; hence the respective companies are not known at this stage. However, private companies in the agricultural, water and other sectors of activity a will be direct beneficiaries of the Project as they will be the ones implementing these projects. ICIEG and UN Women will have a crucial role in the development and implementation of Output 1.1.2 and ensuring that gender is mainstreamed into all project components/activities. ProEmpresa and CCS will have an important role in the generation of knowledge and participation in the capacity building activities (PC2) Other stakeholders: With regards to the stakeholders’ engagement during the execution of the project, it is crucial to have the support from local multipliers in addition to the organisations already involved in the project execution to reach as many people as possible. Engagement activities include, but are not limited to:

GEF6 CEO Endorsement /Approval Template-August2016

• Providing information via the projects Website developed in PC1, e-mails, newsletters, publications on the organisations’ web pages • Providing information through radio and/or T.V. • Providing information through local newspapers and journals A registry of the people engaged will be kept for monitoring purposes.

Coordination with other relevant GEF-financed projects and other initiatives This GEF/UNIDO project will coordinate and build on the GEF 4 project “Promotion of Small-to-Medium scale RE projects in Cabo Verde” currently implemented by UNIDO (in close cooperation with ECREEE) and expected to be completed by the end of 2018. The GEF 4 project has been addressing existent barriers to the deployment of small-to-medium scale RE solutions through an integrated approach including the development of a conducive policy environment to support RE market and the implementation of pilot projects to showcase the technical feasibility and commercial viability of small-to-medium scale RE projects. In fact, the project has positive experiences with the usage of RE solutions for water mobilization as some pilot projects are using RE for water pumping and for a desalination plant. As such, this GEF/UNIDO project will diligently consider the lessons learnt and knowledge acquired from the GEF 4 project and will take advantage of the strong partnerships forged under it to explore future collaboration in energy-water nexus initiatives. Besides the UNIDO-GEF4 project, this GEF/UNIDO project has synergies and complements/contributes to the following GEF funded initiatives: • GEF Small Grant Programme (SGP) 2015-2018: provides support to a series of demonstration projects for further scaling up, replication and mainstreaming, including sustainable energy-water nexus projects. This new GEF/UNIDO project will work with GEF SGP in the definition and implementation of the tailor-made financing mechanism. • UNDP-GEF 5 project “Cabo Verde Appliances & Building Energy Efficiency Project (CABEEP)”: The objective of the project is to reduce energy consumption and related GHG emissions in buildings and household appliances in Cabo Verde through introducing a range of legislative and regulatory measures and resulting in an estimated CO2 savings of approx. 703.99 ktCO2 equivalents over the 10-year project lifetime. This project is in implementation in Cabo Verde and synergies will be created with it especially in the identification of EE projects associated with water management systems. • UNDP-GEF 4 project “Building Adaptive Capacity and Resilience to Climate Change in the Water Sector in Cabo Verde” that aimed to increase resilience and enhance key adaptive capacity to address the additional risks posed by climate change to the water sector in Cabo Verde. This project was implemented between 2009 and 2013. This GEF/UNIDO project is aligned with the UNIDO’s Mid-term programme framework 2018-202166, namely with the strategic priority of safeguarding the environment as the project is: • Promoting the use of RE and EE in water resource management systems including identification and implementation of low-carbon technologies, development of policies, regulations and standards as well as management practices; • Supporting Cabo Verde in meeting its obligations under multilateral environmental agreements. • Focusing on the sustainable use of energy and water resources; • Promoting EE practices in water resource management activities and systems. Furthermore, the project is also aligned with the GEF2020 Vision Statement of Theory of Change which supports interventions that achieve deep, systemic and sustainable change with large-scale impact in the global environment.

66 UNIDO’s Mid-term programme framework 2018-2021, available at: https://www.unido.org/sites/default/files/2017- 05/IDB.45_8_Add.2_2__E_Medium-term_programme_framework_2018-2021_1703143E_20170522__0.pdf GEF6 CEO Endorsement /Approval Template-August2016

FIGURE 6: GENERAL FRAMEWORK OF GEF THEORY OF CHANGE67

Additional Information not well elaborated at PIF Stage: A.7 Benefits. Describe the socioeconomic benefits to be delivered by the project at the national and local levels. How do these benefits translate in supporting the achievement of global environment benefits (GEF Trust Fund) or adaptation benefits (LDCF/SCCF)? This GEF/UNIDO project fits into the national policies for the promotion of sustainable energy and water. The project is expected to deliver tangible socioeconomic benefits for Cabo Verde in the targeted sectors as a whole and individually for men, women and their families. The socioeconomic benefits at national level (country) are achieved as a result of the expected economic growth in the targeted sectors. The inclusion of cleaner technologies in water management system, environmental impacts avoided and social impacts achieved through an improved water access will have impacts across all sectors of activity and for the population in particular. Additionally, the project will contribute to reduce economic dependence on fossil fuel imports for water management activities through strengthening the diversification strategy by increasing the use of RE and reducing energy demand through the adoption of EE measures. The Table 10 summarizes some of the socio-economic benefits yield by the project. TABLE 10: SOCIOECONOMIC BENEFITS OF THE PROJECT

Benefits Summary description Investment leverage The total amount that the GEF would provide for this project is approximately USD 1.78 million, which leverages a total co-financing amount of approximately USD 14.95 million from other sources. Jobs created Provided the local interest in working in the sustainable energy-water nexus projects is fostered through this project and

67 General Framework of GEF Theory of Change, https://www.researchgate.net/figure/General-framework-for-GEF-theory-of-change-Source- GEF-IEO-2014_fig1_312326246

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Benefits Summary description grows, there could be potential for the generation of the following type of jobs: • Local workers for the construction, operation and maintenance of RE and EE system associated with water management infrastructure projects; • Jobs in energy-water ESCOs markets. • Teachers/trainers providing courses on RE and EE associated with water resource management projects and in entrepreneurship and ESCOs in local educational institutions (e.g. universities) and/or organisations, that may provide capacity building. • Local or foreign RE and EE technology providers (such as distributors of imported goods, e.g. solar PV, wind, ocean energy technologies etc) that can employ local technicians or engineers on RE and EE technologies to do the installation, operation and maintenance of the RE and EE systems. • Local consultancy service providers that work on RE and EE systems design and feasibility; • Foreign companies that may open local offices due to the growth of the clean energy-water nexus market may employ local workforce for their operations and this could include specialised RE staff as well as non- RE specialized staff (e.g. administrative staff) Positive impacts for • The population that will benefit from increased quality and quantity of water the Cabo Verde • Rural and peri-urban households that have no access to water from the grid, that will benefit from water Population and generated with sustainable energy from the projects developed under PC3, will have an increased supply of businesses water, benefit from water with better quality and will have time left to be dedicated to other economic activities, thus increasing the budget of the household. • By using RE sources for productive uses (such as agricultural, tourism, etc) these businesses will expand (for those to which access to water will be provided), become more profitable as the adoption of sustainable energy technologies may reduce water production/management costs (they don't need to incur in purchase of expensive fossil fuels costs for water production and management) which in turn releases more capital for business expansion or creation of new businesses. • The creation of ESCOs and the adoption of a financial mechanism for sustainable energy-water nexus initiatives that can be used in Cabo Verde is expected to: o Contribute to the creation of a specialised market of services in the country that will foster the creation of new companies, new specialised jobs in the areas of sustainable energy-water; o Will help to facilitate investment and the development of more sustainable-energy water nexus projects; o Can contribute to ensure proper management and maintenance of systems (in case ESCO models are adopted to carry out this services) Positive impacts on The deployment of the considered demonstrations projects as well as the deployment of further projects (e.g. replication environment and projects identified during the implementation of the project) will have several positive impacts on the local and global health environment: • Reduction of GHG emissions and other associated air pollutants derived from fossil fuel combustion (CO, NOx, SO2, particulate matter) since it is replaced by RE sources. • Estimated GHG emissions reductions (direct) are 126 577 tCO2e over projects’ lifetime • Potential reduction in emissions and wastes from fossil fuel production (upstream and downstream), distribution and transport to the site of consumption. Although there will be emissions associated to the production, transportation, installation and maintenance of the RE technologies, these are expected to be very low during the lifetime of the RE systems in comparison to the emissions from a fossil fuel-based plant or grid electricity during its operation and maintenance. • The use of PV pumps for irrigation instead of traditional fossil fuel pumps has economic benefits for the populations and the minimized release of GHGs. • With the adoption of the demonstration projects that will facilitate the access to water for consumption will have direct benefits for the population in general and for women and children in particular, namely: o The provision of access to water for the population that at the moment has limited access to water will minimize the time spend by women in rural areas of Cabo Verde from spending a lot of time in water collection. This will free up the women’s time do to other activities that can bring additional income to the families as well as have positive impact on their health (women carry up to 20 litres of water in their heads); o By improving access to water with better quality, will have impacts on the household health as better water will be consumed in the household. It is important to mention that the water drank in some Cabo Verde municipalities does not have the required quality which has impacts in the health of the population) o Through some of the projects implemented under PC3 by using RE for production/extraction of water, it is expected that in some places the cost of water will be reduced, and that will help the populations in buying more water that can be used not only for consumption but also for basic sanitation purposes. In GEF6 CEO Endorsement /Approval Template-August2016

Benefits Summary description fact, in places where people still have to walk to get water from natural sources, wells and Chafariz normally cannot carry enough water to satisfy the household consumption and sanitation needs with negative impacts on their health. • Avoidance of potential fuel leaks that could occur if storage tanks or containers are not properly handled. Fossil fuel leaks can pollute the soil and water sources. Competitiveness of Although it is well known that RE projects need a higher upfront investment in comparison to diesel-based systems, the RE to diesel potential reduction in operation and maintenance cost that would be generated throughout their lifetime, which are generation mainly associated to the purchase of diesel fuel to operate, makes these technologies more attractive. Moreover, the exploitation of indigenous resources (solar, wind, ocean, etc.), reduces the country’s dependency on external sources of energy, i.e. imported fossil fuels, and further ensures reliability of energy supply. In addition, the implementation of RE projects generates positive environmental impacts, in comparison to diesel-based generation systems, since RE reduces GHG emissions and other air pollutants. Addressing gender This project will monitor gender-related indicators in order to follow up the percentage of women involvement in issues sustainable energy-water nexus initiatives. Women will be encouraged to participate in the different project activities and their participation will be tracked. It is expected that social and economic benefits from the implementation of sustainable energy-water nexus initiatives will be shared equally by male and female workers in the respective sectors. Direct creation of jobs is an important opportunity that could benefit both men and women. Women often have a predominant role to sustain smallholder economies, are the ones that spend more time in water collection activities, and therefore the project may benefit those women in this kind of situation. In addition, there are benefits in terms of water quality improvement and water availability for both consumption and sanitation purposes, which will impact directly on women and children, who are the ones that more frequently stay at home and suffer more the negative impacts of lack of sanitation and/or consumption of poor quality water.

A.8 Knowledge Management. Elaborate on the knowledge management approach for the project, including, if any, plans for the project to learn from other relevant projects and initiatives (e.g. participate in trainings, conferences, stakeholder exchanges, virtual networks, project twinning) and plans for the project to assess and document in a user-friendly form (e.g. lessons learned briefs, engaging websites, guidebooks based on experience) and share these experiences and expertise (e.g. participate in community of practices, organize seminars, trainings and conferences) with relevant stakeholders. This GEF/UNIDO project will build on the ongoing international efforts to integrate the energy-water nexus approach in the design and implementation of water and energy initiatives and policies as well as in the national efforts to improve the accessibility and affordability of energy and water services. During and after the project, the data and knowledge collected and developed will be constantly shared with a wide range of stakeholders to guarantee that specific activities can be sustained and scaled-up: • Within PC1 it is expected that the platform created (Nexus Platform and the project’s Website) will not only be operational to share knowledge during the project but also after it. To ensure that capacity will be built at the host of the Platform during the project on the Platform management and update; • The policy recommendations on how to integrate the energy-water nexus approach as well as the gender dimension (in PC1), training courses and material on RE and EE in water management systems (with a special focus on desalination plants and pumping stations) and on entrepreneurship and creation and management of ESCOs (created and development in PC2) will be available not only during the project but also after GEF/UNIDO project implementation. It is important to refer that the training courses will be established with CERMI (and other institutions in Cabo Verde) and will integrate the CERMI curriculum with the vision of being provided not only in Cabo Verde but also in the ECOWAS and PALOPS. , • Under PC3 the creation and maintenance/update of an energy-water project investment portfolio of energy-water projects, among others, will be advertised in the project’s Website as well as the case studies developed about the implementation and maintenance of these projects. It is expected that the energy-water project investment portfolio is not only expanded during the project but will continue to be used after the conclusion of the project by the platform host. In fact, all the material developed will be shared with the national partners and other interested stakeholders in order to guarantee a sound transition of activities and responsibilities after the project is completed. In this regard, all the relevant project documents and reports will be available through the websites of the executing national counterparts; namely the MEE as well as the MAA, ANAS etc. Besides, this project will feed into ongoing knowledge management

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efforts; for instance, the online registration platform for micro-generation systems in Cabo Verde developed by the GEF 4 project under the guidance of the MEE or the current training curricula of CERMI. Apart from using national communication channels and knowledge management tools, the relevant documentation will be made available under ECOWREX which aims at improving existing knowledge exchange and at mitigating information barriers in the ECOWAS region as well as UNIDO’s Open Data Platform. Both will collect relevant documents to facilitate information exchange, partnerships creation and scaling up efforts. It has been envisaged that the training material developed under the project can be shared in a later stage with ECREEE in order to scale up the training to a regional level. Furthermore, information on project status, results and reports compiled within the project will be made publicly available on the project’s Website (PC1). Also, the project manager will attend to conferences and workshops on the sustainable energy (RE and EE), on energy-water nexus and on the water sector to create awareness on the project and disseminate the project results. All publications developed under this project will comply with GEF and UNIDO communication policies.

B. DESCRIPTION OF THE CONSISTENCY OF THE PROJECT WITH: B.1 Consistency with National Priorities. Describe the consistency of the project with national strategies and plans or reports and assessments under relevant conventions such as NAPAs, NAPs, ASGM NAPs, MIAs, NBSAPs, NCs, TNAs, NCSAs, NIPs, PRSPs, NPFE, BURs, INDCs, etc.: In the last decade, Cabo Verde has made significant progress in developing relevant national policy frameworks to support its ambitious energy and water goals. The project is fully in line with the energy, water and climate policy of Cabo Verde: • The Government Programme for 2016-202168 where the the GoCV has committed to achieve certain goals and targets for the energy sector: to reduce the energy bill by at least 25% throughout the legislative period; to provide universal access (100%) in terms of energy and water supply; to adopt a social tariff for electricity and water supply; to transform the RE services sector into an employment generation and exporting sector in the ECOWAS region; the promotion of an energy production optimization culture, significantly reduce inefficiencies in energy supply, improve the regulation and implement a “zero bureaucracy” approach in the energy sector. With regards to RE development, the Government Programme 2016- 2021 specifically states that the focus should be on wind and solar energy, investing in financially sustainable generation projects, and having into consideration amongst other the investment in small and medium-scale solar PV (in the short term) particularly for remote areas for agricultural applications and the use of hybrid diesel/wind/solar systems to produce desalinated water. • Strategic Plan for Sustainable Development (PEDS) 2017-2021 69 developed in 2017 aims to operationalise the Government Programme for the IX Legislative Administration. Concerning the Energy-Water Nexus, the PEDS contemplates the following two programmes:

o The National Programme for Energy Sustainability: aims to make the transition to a secure, efficient and sustainable energy sector, reducing reliance on fossil fuels and ensuring universal access and energy security. The programme has the following main intervention axes: (a) Institutional Strengthening and Improvement of the Business Environment; (b) the Reform of the Organization Structure of the Energy Market; (c) the Investment in Strategic Infrastructures, (d) the Development of Renewable Energies; and (e) the Promotion of EE. This programme has a direct link to water projects, as with its implementation, the programme envisages to reduce through the use of RE not only the cost of electricity but also of water production.

o The Water and Sanitation Programme: aims to ensure the right to water and sanitation, ensure access to and accessibility of good quality water and sanitation services, with a view to environmental quality, gender equality and social inclusion, public health and, above all, improving socio-economic conditions and the well-being of populations throughout the national territory.

68 Government of Cabo Verde, Government Programme for 2016-2021: http://www.governo.cv/images/Programa_do_Governo_da_IX_Legislatura_2016-_2021.pdf 69 Government of Cabo Verde, Strategic Plan for Sustainable Development (PEDS) 2017-2021 GEF6 CEO Endorsement /Approval Template-August2016

• National Strategic Water and Sanitation Plan (PLENAS, 2015)70: which has the strategic objective of ensure that every citizen has minimum daily water consumption level of 40l and a maximum of 90l. It also includes the indication that the expansion in water supply is to be aligned with measures to improve overall sanitation system, optimize the use of the resources, reduce water distribution losses, and promote rainwater harvesting and water re-use. Regarding the energy policy/use for the water and sanitation sector the document refer that energy (associated with the pumping stations and the treatment) and the necessity of the use of desalinated water are the reasons for the very high-water costs in Cabo Verde. PLENAS refers that the energy needs should be taken in consideration in the selection of the water supply, sanitation and water treatment to be adopted on a case by case basis. It also refers that RE solutions should be adopted not only due to its reduced environmental impact (reduction of GHG and other pollutants resulting from traditional use of fossil fuels for energy production) but also for the security of supply (avoiding the dependence on imported fossil fuels). • Action Plan for the Integrated Management of the Water Resources (PAGIRE)71: which is a reference for the Government and the different actors that operate in the field of water for the horizon between 2010-2020. PAGIRE proposes to strike a balance between the current use of water resources and their conservation for future generations. Its implementation will improve the management of water resources, translated into: (i) reduction of waste; (ii) meeting current and future needs in an integrated water resource perspective; (iii) preservation of the environment and quality of life; (iv) participation of the most disadvantaged groups in the management process; and (v) economic valuation of water. This GEF/UNIDO project aims to contribute towards the implementation of the overarching strategy of PAGIRE, namely for the implementation of Axe 1: Increase water (natural and non-natural) availability, Axe 2: Improve knowledge and management of water resources and Axe 4: construction of infrastructure and improvement of communication, information, education and awareness of water. • National Basic Sanitation Policy and Plan (2010)72: seeks to set a new path for sanitation in the country, with particular focus on improving institutional framework and basic sanitation infrastructure. This policy and plan refers that the sanitation sector is open to private investment and investment through PPP as the Law n. º 49/VII/2009 of the 30 of December, allows for the establishment of concession contract in the investment projects related to: (a) water distribution services for public use; transmission and distribution of electricity and (c) sanitation services, including the collection and treatment of solid waste of the urban population • Water and Sanitation Code (CAS, 2015) 73: defines (i) the fundamental principles applicable to water resources and establish standards that guarantee their preservation, quality, sustainability and rational use; and (ii) the public and land supply and sanitation systems as well as mechanisms for economic and financial sustainability and the establishment of mechanisms to safeguard water resources. • The National Renewable Energy Action Plan (NREAP, 2015), the National Energy Efficiency Action Plan (NEEAP, 2015), and the SEforALL Action Agenda (SEFORALL AA) 74 which set up goals and targets for RE and EE and the respective measures to achieve those targets, including the creation and adoption of ESCOs. Target and goals in term of investment in RE as set up in these plans are to be considered valid when they are technically and economically feasible and contribute to the reduction of the current cost of electricity. • Cabo Verde Intended National Development Contribution (INDC)75 making an unconditional commitment to achieve 30% RE penetration rate into the electric grid by 2025 as well as to reduce 10% of the overall energy demand by 2030.

70 Government of Cabo Verde, National Strategic Water and Sanitation Plan (PLENAS, 2015): http://extwprlegs1.fao.org/docs/pdf/cvi119727.pdf 71 Government of Cabo Verde, Action Plan for the Integrated Management of the Water Resources (PAGIRE, 2010): http://extwprlegs1.fao.org/docs/pdf/cvi119727.pdf 72 Government of Cabo Verde, National Basic Sanitation Policy and Plan (2010): http://www.cpe.gov.cv/wp- content/uploads/2015/11/PLANO_DE_SANEAMENTO_BASICO1.pdf 73 ANAS, Water and Sanitation Code (CAS, 2015): http://www.anas.gov.cv/index.php/legislacao/legislacao-agua/13-codigo-de-agua-e- saneamento-b-o-29-07-2015/file 74 Government of Cabo Verde, National Renewable Energy Action Plan (NREAP, 2015), the National Energy Efficiency Action Plan (NEEAP, 2015), and the SEforALL Action Agenda (SE4ALL AA) 75 Cabo Verde Intended National Development Contribution (INDC): http://www4.unfccc.int/ndcregistry/PublishedDocuments/Cabo%20Verde%20First/Cabo_Verde_INDC_.pdf GEF6 CEO Endorsement /Approval Template-August2016

Nevertheless, if new sources of finance and enhanced international support are provided, the country could achieve 100% RE penetration rate by 2025 and 20% reduction on the overall energy demand by 2030. Regarding the water sector, Cabo Verde committed to guarantee a stable and adequate water supply of at least 40l of potable water per day through the promotion of integrated water resources management. This document also proposed key measures to guide energy and water interventions supporting its commitments. The project will directly support the relevant INDC proposed measures. • 2015 Joint Declaration between the EU, Luxembourg, Spain, Portugal, Austria and the Republic of Cabo Verde on Reinforced Cooperation in the Field of Sustainable Energy 76 where a bilateral policy dialogues and framework for technical assistance, energy sourcing and EE has been established between the EU and Cabo Verde. Through this joint declaration the EU endeavors to: (i) provide technical assistance to Cabo Verde to refine its policies, promote and prepare relevant projects and provide technological knowledge transfer between the EU and Cabo Verde; (ii) help identify and bring forward potential energy projects financed with assistance of the donor community in or to increase the access of the population to modern energy services; (iii) assist in the development of a comprehensive master plan for energy supply in rural areas that can help to identify projects to increase off-grid access and the development of mini-grid in all inhabited islands; (iv) promote the mobilization of the private sector and civil society in the field of energy, i.e. through the organization of business for a to inform and attract the private sector an financing institutions towards sustainable energy investment. The Government of Cabo Verde endeavors to: (i) actively participate in the sector dialogue and the program steering on energy ensuring transparency of information related to funding and project preparation in the sector; (ii) overcome sector related difficulties by prioritizing implementation of legislative and regulatory reforms and establishing an appropriate enabling private sector investment in the energy sector; (iii) to promote the use of sustainable energy technologies and solutions with the view to limit the negative climate and environmental related impacts of energy generation and use; (iv) to foster regional cooperation regarding the provision of efficient, reliable and competitive energy sources to all the ECOWAS Member States through the common exploitation of traditional and alternative energy sources, thereby serving as a model for the creation of networks of regional RE and EE centers. • Social and Gender Strategy for the Water and Sanitation Sector (ESGAS, 2015)77 that as the overall objective of promoting and ensuring, in quantity and quality, universal access to and accessibility to water and sanitation in an equitable, inclusive and participatory manner, safeguarding the empowerment of people with low income, environmental sustainability and gender equality to be achieved through the achievement of 8 main goals that include (amongst others): ensuring a minimum consumption of 40 litres of water per person per day; increase household access to public water distribution network and sanitation facilities; minimum representation of 40% of each gender in leadership position on the sector; improved water tariff or fountain water and auto-tank type I. • Communication Strategy for Changing the Water, Sanitation and Hygiene Behaviours (2017)78: developed within the framework of the water and sanitation sector reform, that aims to promote the change of attitudes and behaviours of hygiene and rational use of water of the population in general, and greater participation and engagement of a set of key players in the ongoing reform processes. The implementation of the strategy expects to achieve improve public health and reduce child mortality caused by poor water and sanitation conditions; ensure future sustainability of water resources that can cover the basic needs of the population; and a more effective management of water and sanitation. • National Plan for Gender Equality 2015-2018 (PNIG): that has specific goals for increasing support for rural and peri- urban women against poverty, with a view to improving their access to land, water, credit, technical support and training; and improve sanitation infrastructures that contribute to the reduction of effort and time devoted to household tasks through the social access fund. • Cabo Verde National Adaptation Programme of Action 2007-2012 (NAPA, 2007)79 which aims to increase the capacity of Cabo Verde resilience to climate change and climate variability in order to achieve the development objectives set in its

76 2015 Joint Declaration between the EU, Luxembourg, Spain, Portugal, Austria and the Republic of Cabo Verde on Reinforced Cooperation in the Field of Sustainable Energy : https://eeas.europa.eu/sites/eeas/files/cape_verde_energy.pdf 77 Social and gender Strategy for the Water and Sanitation Sector (ESGAS, 2015): http://www.anas.gov.cv/images/PDF/Estrategia-Social-e-de- Genero-para-Setor-Agua-Saneamento.pdf 78 ANAS 2017, Communication Strategy for Changing the Water, Sanitation and Hygiene Behaviors: http://www.anas.gov.cv/index.php/publicacoes/20-estrategia-social-e-de-genero-para-mudanca-de-comportamento-em-agua-saneamento-e- higiene-esgas/file 79 Cabo Verde National Adaptation Programme of Action 2007-2012 (NAPA, 2007) extracted at: http://unfccc.int/resource/docs/napa/cpv01.pdf GEF6 CEO Endorsement /Approval Template-August2016

Growth and Poverty Reduction Strategy Paper, through amongst other things, the promotion of integrated water resources management in order to guarantee water for the people, for the production of food, for the ecosystems and for the tourism industry. • Cabo Verde has ratified the United Nations Framework Convention on Climate Change (UNFCCC) and is eligible to receive financial support for adaptation and mitigation interventions. The energy sector is considered as priority sector for GHG emission reductions. The up-scaling of RE and related technology transfer is an important climate change mitigation and adaptation measure, as well as a poverty reduction measure. The proposed GEF project will contribute to the targets and priority actions outlined in the Second National Communication to the UNFCCC (2011)80 and the Third National Communication o the UNFCCC being developed. In particular these reports outline that climate change will exacerbate already existing vulnerabilities (such as poor natural resource base, including serious water shortages and poor soil for agriculture on almost of the islands) and focus on RE and EE technologies will support both mitigation and adaptation efforts. • SEforALL Investment Prospectus for Cabo Verde (Draft): contains the list of the projects either submitted by public or by private entities contributing to the achievement of the objectives SEFORALL, and for which funding is required. This list contains some sustainable energy-water nexus project. The GEF/UNIDO is consistent with all the refereed policies and plans and expects to contribute to their implementation through: • Improving the legal and regulatory framework for sustainable energy-water nexus projects by opening the dialogue and discussion of projects between the energy and water sectors through the Platform; developing guidelines and providing technical assistance to integrate sustainable energy solutions (RE and EE) on water resource management systems; integrating gender issues into energy-water management projects and improving the legal and regulatory framework by developing market-oriented policies and incentives for private sector engagement; • Building capacity on sustainable energy-water nexus project identification, implementation, management and maintenance; in entrepreneurships and ESCO creation and management in the Country as well as in the ECOWAS and PALOP; • Demonstrate the technical feasibility and commercial viability of sustainable energy-water nexus projects through:

o the implementation of at least 3.6MW of sustainable energy projects associated with water resource management systems which require substantial investment support (integrating renewable micro-grids and decentralized RE solutions associated with water resource management projects; improving EE of large consumers; promoting the use of smaller distributed energy solutions for water pumping; building several new desalination and water pumping units);

o provide technical assistance in the definition and implementation of ESCOs and tailor-made financing mechanism that makes used of financial instruments available in the country, to facilitate the implementation these types of projects; and

o Promoting PPPs.

C. DESCRIBE THE BUDGETED M &E PLAN: Project monitoring and evaluation (M&E) will be conducted in accordance with established UNIDO and GEF procedures. The concrete M&E activities are defined by PC4. The overall objective of the monitoring and evaluation process is to ensure successful and quality implementation of the project by: i) tracking and reviewing project activities execution and actual accomplishments; ii) providing visibility into progress as the project proceeds so that the implementation team can take early corrective actions if performance deviates significantly from original plans; and iii) adjust and update project strategy and implementation plan to reflect possible changes on the ground, results achieved and corrective actions taken. A detailed monitoring plan for tracking and reporting on project time-bound milestones and accomplishments will be prepared by UNIDO in collaboration with the Project Management Unit (PMU) to be presented to the PSC at the beginning of project implementation and then periodically updated, if required. By making reference to the impact and performance indicators defined in the Project Results Framework, the monitoring plan will track, report on and review project activities and accomplishments in relation to:

80 Second National Communication to the UNFCCC: http://unfccc.int/resource/docs/natc/cavnc2.pdf GEF6 CEO Endorsement /Approval Template-August2016

• Sustainable energy generation and GHGs emission reductions directly generated by the GEF/UNIDO project. These will include the type and the number of sustainable energy (RE and EE)-water nexus projects developed and implemented. • Sustainable energy generation and GHGs emission reductions in-directly generated by the GEF/UNIDO project. These will include type and the number of sustainable energy-water nexus projects developed and implemented due to the increased capacity and conducive environment for the projects. • Sustainable energy investment in the water sector generated by the GEF/UNIDO project, directly and indirectly. • Development of policy, legislative and regulatory frameworks in favour of sustainable energy-water nexus projects/initiatives. • Level of awareness and technical capacity on sustainable energy-water nexus systems, entrepreneurship and ESCOs within relevant institutions, in the market and within enterprises. • Private sector contribution to the implementation of the project. • Overall socio-economic impacts of the project to include increase in productive capacities, etc. • Project impact on gender related issues by means of tracking gender-specific indicators throughout project lifetime (women participating in capacity building, women leading demonstration projects, etc.) Monitoring and Evaluation of direct and indirect GHG emission reductions will make use of the GEF Tracking Tool, which will be submitted to the GEF Secretariat two times during the duration of the project: at CEO Endorsement and at project closure. The National Project Coordinator will be responsible for the continuous monitoring of project activities execution, performance and track progress towards milestones and will provide a quarterly progress report for the UNIDO project manager, these progress reports might be shared with counterparts when deemed relevant. However, monitoring and evaluation of the demonstration projects with respect to energy generation, technical performance, commercial viability and GHGs emission reduction, and related information, will be integral part of the evaluation component of PC3. The UNIDO project manager will be responsible for tracking overall project milestones and progress towards the attainment of the set project outputs. The UNIDO project manager will be responsible for narrative reporting to the GEF. The final project evaluation will be carried out 3 months before the operational completion of the project. The following table provides the tentative budget for the evaluation. M&E Activity Categories Feeds Into Timeframe GEF Co-financing Responsible Budget(USD) (USD) Parties Measurement GEF Tracking Project Continuous 30,000 30,000 PMU and Tool specific indicators Management UNIDO PM Monitoring of project impact Project Continuous PMU, indicators (as per Log frame) Management project developers Monitoring of Environmental Project Continuous PMU, & Sustainability Management management, project Plan Terminal developers Evaluation Periodic Progress Reports Project Semi-annually PMU, management, UNIDO PM PSC Meeting and project developers

GEF6 CEO Endorsement /Approval Template-August2016

M&E Activity Categories Feeds Into Timeframe GEF Co-financing Responsible Budget(USD) (USD) Parties Independent Terminal Terminal Project completion 30,000 28,000 Independent Evaluation Evaluation (At least one month Evaluator, Review prior to the end of PMU, conducted by the project and no UNIDO PM, UNIDO IEV later than six and UNIDO and/or GEF EO months after Evaluation project completion Group (IEV)

TOTAL 60,000 58,000

UNIDO as the Implementing Agency will involve the GEF Operational Focal Point and project stakeholders at all stages of project monitoring and evaluation activities in order to ensure the use of the evaluation results for further planning and implementation. According to the Monitoring and Evaluation policy of the GEF and UNIDO, follow-up studies like Country Portfolio Evaluations and Thematic Evaluations can be initiated and conducted. All project partners and contractors are obliged to (i) make available studies, reports and other documentation related to the project and (ii) facilitate interviews with staff involved in the project activities.

D. LEGAL CONTEXT: The UNIDO activities will be governed by the provisions of the Standard Basic Cooperation Agreement concluded between the Government of the recipient country concerned and UNIDO or – in the absence of such an agreement – by one of the following: (i) the Standard Basic Assistance Agreement concluded between the recipient country and UNDP, (ii) the Technical Assistance Agreements concluded between the recipient country and the United Nations and specialized agencies, or (iii) the Basic Terms and Conditions Governing UNIDO Projects.

GEF6 CEO Endorsement /Approval Template-August2016

PART III: CERTIFICATION BY GEF PARTNER AGENCY(IES)

A. GEF Agency(ies) certification

This request has been prepared in accordance with GEF policies81 and procedures and meets the GEF criteria for CEO endorsement under GEF-6.

Agency Date Project Contact Coordinator, Signature Telephone Email Address Person Agency Name (MM/dd/yyyy) Mr. Philippe R. 06/28/2018 Robert Novak +431260264805 [email protected] Scholtès, Industrial Managing Director, Development Officer, Programme Department of Development and Energy, UNIDO Technical Cooperation UNIDO-GEF Focal Point

81 GEF policies encompass all managed trust funds, namely: GEFTF, LDCF, SCCF and CBIT GEF6 CEO Endorsement /Approval Template-August2016

ANNEX A: PROJECT RESULTS FRAMEWORK (either copy and paste here the framework from the Agency document, or provide reference to the page in the project document where the framework could be found). Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

Objective To catalyze market-based 1. Incremental avoided or Baseline: GEF climate change A: The Government of Cabo integration of renewable reduced CO2eq emissions mitigation tracking tool Verde remains committed in 1. The adoption of RE and EE technologies in water energy and energy (tonnes of CO2eq) the medium and long term resource management initiatives will remain low if Reports on the efficiency (sustainable on the adoption of RE and 2. Energy generated from RE the current practices are not changed in Cabo Verde sustainable energy-water energy) technologies in EE and energy saved due to the (32.7 MW of grid connected RE generating 370 623 investment projects water resource management adoption of EE measures (in MWh/year of electricity; and 108.3 kW of stand- installed under PC3 A: Data to calculate CO2eq MWh and as a % of total) alone mini-grids) emission reductions is Regular project reporting available 3. Number of policies created/ 2. The current policy framework in place is on capacity generated updated / improved to support insufficient to support the integration of sustainable A: Support and interest from Reports on policy and the integration of sustainable energy in water resources management and the private sector in developing action in place energy is water resources creation of ESCOs integrated RE and EE management and the creation systems in water resource Target: of ESCOs management initiatives 1. Cumulative reduction (direct and indirect) of GHG remains in the medium and of around 603 975 tCO2 over the lifetime of the long term. project (15, 20 or 25 years depending on the projects)

through the installation of all identified sustainable energy-water nexus investment projects (Phase I and Phase II of PC3). Cumulative direct emissions reductions of 126 577 tCO2 over the lifetime of the projects and cumulative indirect emission reduction of 477 398 tCO2 over the lifetime of the projects. 2. Policy framework improved PC1: Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) Outcome 1.1 Energy-water 1. Number of policies created/ Baseline: Developed and approved A: Sustained government nexus and Energy Services updated / improved to support policies, regulations, support to agreed activities 1. Current policy framework in place is insufficient to Companies (ESCOs) the integration of sustainable guidelines and standards and involvement of support the integration of sustainable energy in water approach integrated in energy in water resources available in the Cabo government bodies resources management and the market of ESCOs relevant national policies management and the market Verde official (MEE/DNEIC/DSE, GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks and regulations for ESCOs Target: publications as well as MAA/DNA, MAA/DGASP, on the Website created ANAS, ARE, ICIEG) 1. Policy framework improved by the project

Final Project Evaluation

Annual Progress Implementation Reports (PIRS) Quarterly progress reports Outputs: Output National platform 1. Number of “Nexus Baseline: Official communications A: Continuous government 1.1.1. to discuss Platform” and “Websites” on from the Government on support for the creation of 1. Currently there is no team specifically dedicated to synergies between sustainable energy-water nexus the creation of the Nexus the Platform and interest the development of policies and regulations aiming at sustainable energy Platform from the several government 2. Number of meetings of the the integration of sustainable energy in water system and water bodies in integrating the it “Nexus Platform“ resource management and market for ESCOs. Website available online resource (MEE/DNEIC/DSE, and continuously management 3. Number of Technical 2. There is no platform to share available information MAA/DNA, MAA/DGASP, updated established Assistance services provided on energy-water nexus potential and activities to ANAS, ARE, ICIEG) interested stakeholders Nexus Platform meeting 4. Number of Regulatory R: Lack of interest from minutes Framework Workshops 3. No technical assistance (TA) services are in place some government bodies in conducted to support potential developers of energy-water nexus Workshop reports or participating in the Nexus projects meeting minutes or Platform and in maintaining 5. Number of women proceedings the Website integrating the Nexus Platform Targets: and Reports, guidelines and R: Lack of women in key 1. Nexus Platform and Website established. number and type of positions to participate in the 6. Number and percentage of 2. 6 meetings of the Nexus Platform conducted (2 advisory services Nexus Platform and in the women participating in the meetings per year) provided Policy and Regulatory Policy and Regulatory Framework Workshops Framework Workshops 3. Women are encouraged to actively participate and be involved in the Nexus Platform and in the Policy R: Lack of interest from and Regulatory Framework Workshops. At least 40% stakeholders/project of the participants are women. proponents on requesting advisory services on energy- 4. At least two (2) Policy and Regulatory Framework GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

Workshops conducted water nexus field 5. Provision of TA services: 5.1. Recommendations report on how to promote better coordination and a joint approach to energy-water nexus projects/initiatives on an integrated manner 5.2. Gender responsive guideline and Benefit Analysis Report this will include: (i). Guidelines on how to integrate sustainable energy (RE and EE) in water resource management systems; and (ii) an estimation of cost benefits and other benefits from the adoption of RE and EE in water resource management initiatives/ projects when compared to traditional energy sources 5.4. Advisory services provided on the integration of sustainable energy in water resource management systems Output Recommendations 1. Number of modified, Baseline: Report on how the A: There is an interest from 1.1.2. on how to updated and/or new integration of RE and EE the Government and Cabo 1. No baseline assessment on the integration of integrate the laws/guidelines integrating in water resource Verde stakeholders in the gender in the development/implementation of gender dimension recommendations on how to management impacts integration of the gender sustainable energy – water projects into energy-water mainstream the gender gender roles dimension on the energy- initiatives dimension into energy-water 2. No specific laws/guidelines including the gender water nexus initiatives Recommendations on prepared and initiatives dimension into energy-water initiatives exist in Cabo how to integrate the presented to Verde 2. Number of reports on how gender dimension into decision makers R: Lack of interest from the integration of RE and EE in Target: energy-water initiatives stakeholders that reduces the water resource management 1. Assessment on the mutual interlinkages of RE, EE, Modified, updated and/or collected data for the report impacts gender roles water resource management and gender roles new laws/guidelines assessment 3. Number of Nexus Platform integrating R: Lack of interest from Meetings or Policy and 2. Recommendations on how to integrate the gender recommendations on Cabo Verde stakeholders in Regulatory Workshops in dimension into energy-water initiatives how to integrate the adopting the which the integration of gender 3. Presentation of the assessment results and gender dimension into recommendations in sustainable energy-water recommendations to the Nexus Platform and at the GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

initiates was presented Policy and Regulatory Framework Workshops energy-water initiatives Meeting Minutes from the Nexus Platform and/or proceeding from the Policy and Legal Framework Workshops Output Recommendations 1. Number of modified, Baseline: Gap analysis on how A: There is an interest from 1.1.3 on how to improve updated and/or new laws or integration of ESCOs on the Government and Cabo 1. No gap analysis on the openness of the market for the policy and regulations to promote ESCOs the sustainable energy- Verde stakeholders in the the development of ESCOs for sustainable energy- regulatory approach in sustainable water nexus initiatives creation and implementation water initiatives environment to energy-water resource of ESCOs for sustainable Recommendation on promote ESCOs management projects 2. No specific laws/guidelines for the establishment energy-water nexus how to improve the approach in of ESCOs nor incentives for these companies initiatives 2. Number of reports on how policy and regulatory sustainable ESCOs can be created in Cabo environment to promote R: Lack of interest from energy-water Verde to support the ESCOs approach in stakeholders that reduces the resource Target: development and sustainable energy-water collected data for the gap management implementation of sustainable resource management analysis projects developed 1. Gap analysis on the market instruments available energy-water initiatives and presented to for the development/implementation of ESCOs for Modified, updated and/or R: Lack of interest from decision makers 3. Number of Meetings held by energy-water initiatives. The analysis should consider new laws/guidelines Cabo Verde stakeholders in the gender dimension. the Nexus Platform to discuss integrating adopting the the integration of ESCOs 2. Recommendations on how to improve the policy recommendations on recommendations and regulatory environment to promote ESCOs how to integrate ESCO

approach in sustainable energy-water resource on energy-water management. The recommendations should include initiatives the gender dimension. 3. Presentations of the gap analysis and Meeting Minutes from recommendations to the Nexus Platform and/or at the the Nexus Platform Policy and Regulatory Framework Workshops and/or proceeding from the Policy and Legal Framework Workshops PC2: Build capacity to support the integration of RE and EE technologies in water resource management Outcome 2.1 1. Number of available training Baseline: Insufficient capacity and knowledge among CERMI Curriculum / A: There is interest from the

GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

Local capacity on energy- programmes and materials on key players on the integration of RE and EE in water CERMI website and Government of Cabo Verde water nexus and ESCOs the: (i) integration of RE and resource management as well as on entrepreneurship projects’s Website and from CERMI in approach enhanced EE in water resource and development and management of ESCOs receiving tailor-made Training materials to management and on (ii) training and knowledge on i) Targets: support the training entrepreneurship and ESCOs integration of RE and EE in programmes development, management and 1. One training programme and respective (gender water resource management finance responsive) training material on integration of RE Training sessions and on (ii) entrepreneurship and EE in water resource management developed and registries and records and ESCOs development, 2. Number of trained trainers integrated into CERMI curriculum management and finance on (i) integration of RE and EE Government website, in water resource management 2. One training programme and respective (gender library or records R: Lack of interest from and on (ii) entrepreneurship responsive) training material on entrepreneurship and market enablers (project Final Project Evaluation and ESCOs development, ESCO development, management and finance proponents/ management and finance developed and integrated into CERMI curriculum organisations/technicians) in receiving training 3. Number of trainees that 3. Twenty (20) trainers (CERMI’s and other participated on i) integration of institutions’ staff) trained by the Train-The-Trainers R: Lack of interest from RE and EE in water resource programme on (i) integration of RE and EE in water women participating in the management and on (ii) resource management or (ii) entrepreneurship and/or capacity building activities entrepreneurship and ESCOs ESCO development, management and finance. At development, management and least 40% of the participants should be women. finance 4. One hundred (100) market enablers (project 4. Number and percentage of proponents/organisations/technicians) trained on i) women participating in training integration of RE and EE in water resource activities management or (ii) entrepreneurship and/or ESCO development, management and finance. At least 40% of the participants should be women. 5. At least 40% of the trained trainers and of the market enablers trained on (i) integration of RE and EE in water resource management or (ii) entrepreneurship and/or ESCO development, management and finance are women. At least 40% of the participants should be women. Outputs Output Training material 1. Number of available training Baseline: CERMI Curriculum / A: There is interest from the

GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

2.1.1 on how to programmes on the integration 1. No specific training programme or training CERMI website and Government of Cabo Verde integrate RE and of RE and EE in water resource materials available on the integration of RE and EE projects Website and CERMI in the EE technologies in management in water resource management development and adoption of Training materials to water management a training programme on 2. Number of available training 2. Insufficient capacity and knowledge among key support the training system produced integration of RE and EE in material on the: integration of players on the integration of RE and EE in water programmes water resource management RE and EE in water resource resource management Technical manuals management R: Insufficient capacity for Targets: produced and available the development of the 3. Number of technical in the Website 1. One training programme on integration of RE and technical manuals manuals covering design, EE in water resource management developed and operation and maintenance of integrated into CERMI curriculum RE based water management system 2. Training materials (gender-responsive) on integration of RE and EE in water resource

management 3. Two (2) technical manuals (gender-responsive) covering design, operation and maintenance of water management system developed and available – one on RE based desalination plants and other on RE based water pumping systems. Output Training material 1. Number of available training Baseline: CERMI Curriculum / A: There is interest from the 2.1.2 on development programmes on the integration CERMI website and Government of Cabo Verde 1. No specific training programme or training and management of RE and EE in water resource projects Website and CERMI in the materials available on entrepreneurship and ESCOs of ESCOs and management development and adoption of development, management and finance entrepreneurship a training programme on 2. Number of available training produced 2. Insufficient capacity and knowledge among key Training materials to entrepreneurship and ESCO materials on the: integration of players on entrepreneurship and ESCOs support the training development, management RE and EE in water resource development, management and finance programmes and finance management Targets: 1. Training programme entrepreneurship and ESCO development, management and finance developed and integrated into CERMI curriculum (gender- responsive). 2. Training material on entrepreneurship and ESCO GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

development, management and finance (gender- responsive). Output CERMI’s and 1. Number of trained trainers Baseline: Insufficient capacity and knowledge among Training sessions A: There is interest from the 2.1.3 other institutions’ on (i) integration of RE and EE key players on the integration of RE and EE in water registries and records CERMI and other staff trained using in water resource management resource management as well as on entrepreneurship institutions in receiving

the programmes and on (ii) entrepreneurship and development and management of ESCOs trainers trained on the: i) and modules and ESCOs development, integration of RE and EE in Targets: produced in management and finance water resource management Output 2.1.1 and 1. Twenty (20) trainers (CERMI’s and other and on (ii) entrepreneurship 2. Number and percentage of Output 2.1.2 on a institutions’ staff) trained by the Train-The-Trainers and ESCO development, women participating in the train-the-trainer programme on (i) integration of RE and EE in water management and finance Train-the-Trainers programme basis resource management or (ii) entrepreneurship and/or R: Lack of interest or the ESCO development, management and finance required qualifications from 2. At least 40% of the trained trainers on (i) women in becoming trainers integration of RE and EE in water resource in: (i) integration of RE and management or (ii) entrepreneurship and/or ESCO EE in water resource development, management and finance are women. management and on (ii) entrepreneurship and ESCO development, management and finance Output 10 training 1. Number of training sessions Baseline: Insufficient capacity and knowledge among Training sessions A: There is interest from the 2.1.4 sessions (5 for carried out on integration of key players on the integration of RE and EE in water registries and records from CERMI in delivering each training RE and EE in water resource resource management as well as on entrepreneurship the training courses on (i)

programme) are management and development and management of ESCOs integration of RE and EE in conducted by Government website, water resource management Targets: CERMI trained library or records and on (ii) entrepreneurship staff 2. Number of training sessions 1. Five (5) training sessions (gender-responsive) on and ESCO development,

carried out on entrepreneurship integration of RE and EE in water resource management and finance and ESCO development, management R: Lack of interest from management and finance 2. Five (5) training sessions (gender-responsive) on market enablers (project 3. Number and percentage of entrepreneurship and/or ESCO development, proponents/ women participating in training management and finance carried out organisations/technicians) in activities receiving training 3. One hundred (100) market enablers (project proponents/organisations/technicians) trained on i) R: Lack of interest from GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

integration of RE and EE in water resource women participating in the management or (ii) entrepreneurship and/or ESCO capacity building activities development, management and finance 4. At least 40% of the market enablers trained on (i) integration of RE and EE in water resource management or (ii) entrepreneurship and/or ESCO development, management and finance are women. PC3: Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems Outcome 3.1 1. Capacity installed of Baseline: Auditing reports of the A: There is interest from the Private investment in sustainable energy (RE and implemented sustainable Government of Cabo Verde, 1. Very few sustainable energy-water nexus projects addressing the EE) water nexus projects energy-water nexus project developers and co- investment projects implemented energy-water nexus investment projects financers in carrying out 2. Number of tailor-made increased – implementation 2. No ESCO model adopted for sustainable energy- sustainable energy-water financing instruments designed Project Reports / Case of at least 3.6MW of water nexus projects nexus investment projects and implemented to support studies or other sustainable energy-water energy-water nexus projects 3. No specific financial mechanism available to information on the A: CVTradeInvest remains investment projects promote sustainable energy-water nexus projects project implementation interested in supporting and 3. Number of energy-water and ESCO and financial advertising investments in nexus investment projects that 4. No infographics available on the energy-water models adopted available the energy-water nexus use ESCOs models sector and its opportunities from DSE / Website sectors 4. Number of energy-water 5. There is few information on establishment and Meeting minutes / nexus investment projects that advantages of PPP to develop energy-water nexus national communications use the tailor-made financial projects about the events mechanism (workshops / seminars/ 5. Percentage of energy-water exposure visits/ Target: nexus audited projects (number forums/meetings) carried of audited projects over total 1. ESCO approach designed and implemented – at out to promote number projects installed) least two (2) energy-water nexus investment projects investment in the energy- use ESCO approach water nexus projects and 6. Percentage of energy-water PPP nexus projects whose audited 2. Financial mechanism (gender-responsive) for results were publicly energy-water nexus projects implemented – at least Infographics on the disseminated (by any means of four (4) of the implemented energy-water nexus energy-water nexus communication) projects use the established financial mechanism sector and its opportunity available at the Website 7. Number of infographics 3. Successful implementation of (gender-responsive) GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

available on energy-water sustainable energy-water nexus investment projects – and at CVTradeInvest nexus sector and project 3.6MW of RE and EE projects associated with water website. opportunities resource management system implemented Final Project Evaluation 8 Number of workshops, 4. 100% of the installed demonstration projects are seminars and exposure visits to audited the energy-water nexus 5. 100% of the installed demonstration project results investment projects are publicly disseminated 9. Number of events 6. At least three (3) events that can take the form of (meetings/forums) carried out workshops/seminar with exposure visits are carried to promote investment in out energy-water nexus initiatives and PPPs 7. Three (3) infographics prepared on the energy- water sector and its opportunities 8. Two (2) meetings/forums on promotion of investment in energy-water nexus initiatives and PPPs Outputs Output ESCOs approach 1. Capacity installed of Baseline: Auditing reports of the A: There is interest from the 3.1.1 and tailored sustainable energy (RE and implemented sustainable Government of Cabo Verde, 1. Very few sustainable energy-water nexus financial EE) water nexus projects energy-water nexus project developers and co- demonstration projects implemented mechanism investment projects financers in carrying out 2. Number of tailor-made developed and 2. No ESCO model adopted for sustainable energy- sustainable energy-water financing instruments designed Project Reports / Case used to support water nexus projects nexus investment projects and implemented to support studies or other demonstration energy-water nexus projects 3. No specific financial mechanism available to information on the R: Delays in demonstration projects promote sustainable energy-water nexus projects project implementation projects commissioning integrating RE and 3. Number of energy-water and ESCO and financial EE in water nexus demonstration projects Target: models adopted available resource that use ESCOs models from DSE / Website management 1. ESCO approach designed and implemented – at 4. Number of energy-water systems to achieve least one (1) energy-water nexus demonstration nexus investment projects that around 1.6 MW of projects use an ESCO approach use the tailor-made financial installed capacity 2. Financial mechanism (gender-responsive) for mechanism energy-water nexus projects designed and 5. Percentage of energy-water implemented – at least one (1) of the implemented GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

nexus audited projects (number energy-water nexus demonstration project use the of audited projects over total established financial mechanism number projects installed) 3. Successful implementation of sustainable energy- 6. Percentage of energy-water water nexus demonstration projects –around 1.6MW nexus projects whose audited of RE and EE projects associated with water resource results were publicly management system implemented during the 1st disseminated (by any means of Phase of the project communication) 4. 100% of the installed demonstration projects are audited. The audits will consider gender-dimensions. 5. 100% of the installed demonstration project results are publicly disseminated Output Investment 1. Capacity installed of Baseline: Auditing reports of the A: there is interest from 3.1.2 projects using sustainable energy (RE and implemented sustainable financial institutions and 1. Very few sustainable energy-water nexus ESCOs approach EE) water nexus projects energy-water nexus sufficient promotion from demonstration projects implemented and tailored investment projects the GoM to participate in the 2. Number of tailor-made financial 2. No ESCO model adopted for sustainable energy- establishment of a financial financing instruments designed Project Reports / Case mechanism water nexus projects mechanism and implemented to support studies or other implemented to energy-water nexus projects information on the A: Local capabilities to reach about 2MW 3. No specific financial mechanism available to promote sustainable energy-water nexus projects project implementation operate the financial of installed 3. Number of energy-water and ESCO and financial mechanism are established capacity nexus demonstration projects Target: models adopted available that use ESCOs models 1. At least one (1) additional energy-water nexus from DSE / Website 4. Number of energy-water investment projects use the ESCO approach R. Lack of interest from the nexus investment projects that private sector in investing in use the tailor-made financial 2. At least three (3) of the implemented energy-water the projects mechanism nexus investment project use the established financial mechanism R: Economic and political 5. Percentage of energy-water instability threatens the 3. Successful implementation of sustainable energy- nexus audited projects (number development of the financial water nexus investment projects –additional 2.0MW of audited projects over total mechanism of RE and EE projects associated with water resource number projects installed) management systems implemented during the 1st 6. Percentage of energy-water Phase of the project nexus projects whose audited 4. 100% of the installed investment projects are results were publicly GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

disseminated (by any means of audited. The audits will consider gender-dimensions. communication) 5. 100% of the installed investment project results are publicly disseminated

Output Workshop, 1. Number of infographics Baseline: Meeting minutes / A: at least one demonstration 3.1.3 seminars and available on energy-water national communications project is installed 1. No infographics available on the energy-water exposure visits nexus sector and project about the events sector and its opportunities R: Economic and political organized to opportunities (workshops / seminars/ instability threatens the discuss and 2. There are no activities for the promotion of exposure visits/ 2. Number of workshops, development and installation promote public sustainable energy-water nexus projects forums/meetings) carried seminars and exposure visits to of projects private investment out to promote the energy-water nexus partnerships to 3. There is few information on establishment and investment in the energy- investment projects accelerate the advantages of PPP to develop energy-water nexus water nexus projects and projects deployment of 3. Number of events PPP sustainable (meetings/forums) carried out Target: Infographics on the energy-water to promote investment in 1. At least three (3) events that can take the form of energy-water nexus nexus projects energy-water nexus initiatives workshops/seminar with exposure visits are carried sector and its opportunity and PPPs out available at the Website and at CVTradeInvest 2. Three (3) infographics prepared on the energy- website. water sector and its opportunities 3. Two (2) meetings/forums on promotion of investment in energy-water nexus initiatives and PPPs PC4: Monitoring and Evaluation Outcome 4.1

1. Project’s progress towards Baseline: Monitoring Reports A: Capability and experience Continuous monitoring and objectives continuously of the Project Management evaluation (M&E) of the N/A Lessons learned Reports monitored and evaluated Unit implementation of the Target: Mid-term Evaluation GEF/UNIDO project 2. Timely implementation of B: Government and private Reports conducted in accordance the project targets and Project progress and an overall project impact sector are interested in the with established GEF and indicators properly monitored assessment periodically monitored and evaluated Final Project Evaluation facts and figures produced

GEF6 CEO Endorsement /Approval Template-August2016

Results Indicators Baseline and Targets Means of Verification Assumptions and Risks

UNIDO procedures and throughout the project duration guidelines

Outputs Output Terminal 1. Project monitoring and Baseline: Progress Reports Appropriate capability of the 4.1.1 evaluation evaluation PM exists for proper project N/A Mid-term self- executed magement and monitoring of 2. Mid-term Review (optional) assessment (optional) Output Project’s progress Target: the project. 4.1.2 monitored, 2. List of all progress reports Terminal Evaluation Monitoring & Evaluation Plan available within 3 Project commissioned documented and prepared; Report (optional) months of Project start successfully and expected recommended 3. Number of project steering Project Terminal Report outputs are achieved actions formulated Terminal evaluation completed by end of project committee meetings sustainably. closing date Copies of dissemination 4. Number of dissemination material Project terminal reported by end of project materials At least one (1) PSC per year

Dissemination materials ready by the end of the project

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX B: RESPONSES TO PROJECT REVIEWS (from GEF Secretariat and GEF Agencies, and Responses to Comments from Council at work program inclusion and the Convention Secretariat and STAP at PIF).

The PIF for the project was cleared while advising that the cost-efficiency of the project needed to be improved during the PPG period as seen in the table below. The cost-efficiency of the project has dramatically improved as co-financing increased from US$ 6,000,000 at the PIF stage to US$ 14,949,551 during the PPG phase.

GEF6 CEO Endorsement /Approval Template-August2016

ANNEX C: STATUS OF IMPLEMENTATION OF PROJECT PREPARATION ACTIVITIES AND THE USE OF FUNDS82

A. Provide detailed funding amount of the PPG activities financing status in the table below:

PPG Grant Approved at PIF: US$ 45,000 GETF/LDCF/SCCF/CBIT Amount ($) Project Preparation Activities Implemented Budgeted Amount Spent Amount Committed Amount Todate Data collection and analysis 6,425.66 6,425.66 - Stakeholder consultation 8,000.00 8,000.00 - Project design and feasibility studies including ESIA, 10,000.00 10,000.00 - ESMP and gender assessment Project strategy and implementation including a 8,000.00 8,000.00 - detailed project objective, components and log-frame Finalization of CEO Endorsement Request 12,574.34 0 12,574.34 Document and address of comments from GEF Secretariat Total 45,000.00 32,425.66 12,574.34

82 If at CEO Endorsement, the PPG activities have not been completed and there is a balance of unspent fund, Agencies can continue to undertake the activities up to one year of project start. No later than one year from start of project implementation, Agencies should report this table to the GEF Secretariat on the completion of PPG activities and the amount spent for the activities. Agencies should also report closing of PPG to Trustee in its Quarterly Report. GEF6 CEO Endorsement /Approval Template-August2016

ANNEX D: OUTPUT BASED BUDGET FOR THE GEF GRANT

GEF Grant Budget Component 1 Component 1 - Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) Type of Expense Yr 1 Yr 2 Yr 3 Output Total Execution Modality 1.1.1. National platform to w/w $ w/w $ w/w $ w/w $ discuss synergies between International Consultant 8 14,000 4 6,000 12 20,000 sustainable energy systems and water resource management National Consultant 0 established Meetings/Workshops 600 600 600 0 1,800 UNIDO Technical Execution Support Miscellaneous 0 Subcontract 3,000 2,000 2,000 7,000 Output sub-total 8 17,600 0 2,600 4 8,600 12 28,800 1.1.2. Recommendations on how w/w $ w/w $ w/w $ w/w $ to integrate the gender National Consultant dimension into energy-water Financed by UN Women/ ICIEG as initiatives prepared and Subcontract part of co-financing presented to decision makers Output sub-total 0 0 0 0 0 0 0 0 1.1.3. Recommendation on how w/w $ w/w $ w/w $ w/w $ to improve the policy and International Consultant 6 10,500 3 5,250 9 15,750 regulatory environment to UNIDO Technical Execution Support promote ESCOs approach in National Consultant 6 4,500 3 2,250 9 6,750 sustainable energy-water resource management projects developed and presented to decision makers Output sub-total 12 15,000 0 0 6 7,500 18 22,500 TOTAL Component 1 20 32,600 0 2,600 10 16,100 30 51,300

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GEF Grant Budget Component 2 Component 2 - Build capacity to support the integration of RE and EE technologies in water resources management Type of Expense Yr 1 Yr 2 Yr 3 Output Total Execution Modality 2.1.1.Training material on w/w $ w/w $ w/w $ w/w $ how to integrate RE and EE International Consultant 12 21,000 12 21,000 technologies in water Execution Agreement with ECREEE management system Subcontract 69,000 0 69,000 and CERMI produced Output sub-total 12 90,000 0 0 0 0 12 90,000 2.1.2. Training material on w/w $ w/w $ w/w $ w/w $ entrepreneurship and International Consultant 12 21,000 12 21,000 development and Execution Agreement with ECREEE management of ESCOs Subcontract 39,000 0 39,000 and CERMI produced Output sub-total 12 60,000 0 0 0 0 12 60,000 2.1.3. CERMI’s staff and other w/w $ w/w $ w/w $ w/w $ institution’s Staff trained International Consultant 0 0 using the programmes and Financed by CERMI as part of co- modules produced in Output Subcontract 0 0 financing. 2.1.1 and Output 2.1.2 on a train-the-trainer basis Output sub-total 0 0 0 0 0 0 0 0 2.1.4. 10 training sessions (5 w/w $ w/w $ w/w $ w/w $ for each module) are National Consultant 0 0 conducted by CERMI trained Financed by CERMI as part of co- staff Workshops/Training 0 0 financing. Output sub-total 0 0 0 0 0 0 0 0 TOTAL Component 2 24 150,000 0 0 0 0 24 150,000

GEF6 CEO Endorsement /Approval Template-August2016

GEF Grant Budget Component 3

Component 3 -Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems Type of Expense Yr 1 Yr 2 Yr 3 Output Total Execution Modality 3.1.1. ESCOs approach and w/w $ w/w $ w/w $ w/w $ tailored financial mechanism International Consultant 16 28,000 12 21,000 28 49,000 developed and used to UNIDO Technical Execution Support support demonstration National Consultant 16 12,000 16 12,000 32 24,000 projects integrating RE and 83 Execution contracts through ECREEE EE in water resource Subcontract 588,416 281,208 0 869,624 management systems to achieve around 1.6 MW of installed capacity Output sub-total 32 628,416 28 314,208 0 0 60 942,624 3.1.2. Investment projects w/w $ w/w $ w/w $ w/w $ using ESCOs approach and International Consultant 12 21,000 12 21,000 24 42,000 tailored financial mechanism UNIDO Technical Execution Support implemented to reach about National Consultant 12 9,000 12 9,000 24 18,000 2MW of installed capacity Subcontract 171,803 171,804 0 343,607 Execution contracts through ECREEE Output sub-total 0 0 201,803 201,804 48 403,607 3.1.3. Workshop, seminars w/w $ w/w $ w/w $ w/w $ and exposure visits organized National Consultant 4 3,000 4 3,000 8 6,000 to discuss and promote public UNIDO Technical Execution Support private investment Workshops/Meetings/Forums 3,000 3,000 0 6,000 partnerships to accelerate the deployment of sustainable energy-water nexus initiative Output sub-total 0 0 6,000 6,000 8 12,000 TOTAL Component 3 32 628,416 28 522,011 0 207,804 116 1,358,231

83 The beneficiaries of the subcontracts will be the ESCOs/projects identified under Output 3.1.1 respectively Output 3.1.2. GEF6 CEO Endorsement /Approval Template-August2016

Component 4 - Monitoring and Evaluation Type of Expense Yr 1 Yr 2 Yr 3 Output Total Execution Modality 4.1.1. Terminal evaluation w/w $ w/w $ w/w $ w/w $ carried out International Consultant 8 22,500 8 22,500 16 45,000 UNIDO as Implementing Agency Output sub-total 0 0 8 22,500 8 22,500 16 45,000 4.1.2. Project’s progress w/w $ w/w $ w/w $ w/w $ monitored, documented and recommended actions Workshops/Meetings 4 3,500 4 3,500 4 3,500 12 10,500 formulated Miscellaneous 1,500 1,500 1,500 0 4,500 UNIDO as Implementing Agency Output sub-total 4 5,000 4 5,000 4 5,000 12 15,000 TOTAL Component 4 4 5,000 12 27,500 12 27,500 28 60,000

Project Management Costs w/w $ w/w $ w/w $ w/w $ (PMC) Local Travel 8,000 8,000 8,000 0 24,000 National Expertise (e.g. Project Coordinator) 64 32,000 70 35,000 70 35,000 204 102,000 National Expertise (e..g UNIDO Administrative Execution Procurement Specialist) 12 4,800 14 5,600 14 5,600 40 16,000 Support Training/Workshops 0 0 Equipment 5,000 0 5,000 Miscellaneous 4,185 5,384 5,384 0 14,953 TOTAL PMC 76 53,985 84 53,984 84 53,984 244 161,953

TOTAL 1,781,484

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ANNEX E: ANNUAL ALLOCATION GEF Project Components Expected Outputs Year 1 Year 2 Year 3 (US$)

Output 1.1.1. National platform to discuss synergies between sustainable energy systems and water resource management 28,800 19,200 4,800 4,800 established Project Component 1: Establishment of a policy Output 1.1.2. Recommendations on how to integrate the gender and institutional framework dimension into energy-water initiatives prepared and presented to 0 0 0 0 conducive to the promotion decision makers of energy-water nexus approach and the creation of Energy Services Companies Output 1.1.3. Recommendation on how to improve the policy and (ESCOs) regulatory environment to promote ESCOs approach in 22,500 15,000 $0 7,500 sustainable energy-water resource management projects developed and presented to decision makers

Sub-Total PC1 51,300 34,200 4,800 12,300

Output 2.1.1: Training material on how to integrate RE and EE 90,000 90,000 0 0 technologies in water management system produced

Output 2.1.2: Training material on entrepreneurship and 60,000 60,000 0 0 Project Component 2: Build development and management of ESCOs produced capacity to support the integration of RE and EE technologies in water Output 2.1.3: CERMI’s staff and other institutional Staff trained resources management using the programmes and modules produced in Output 2.1.1 and 0 0 0 0 Output 2.1.2 on a train-the-trainer basis

Output 2.1.4: 10 training sessions (5 for each module) are 0 0 0 0 conducted by CERMI trained staff

Sub-Total PC2 150,000 150,000 0 0 GEF6 CEO Endorsement /Approval Template-August2016

Output 3.1.1.ESCOs approach and tailored financial mechanism developed and used to support demonstration projects integrating 942,624 628,416 314,208 0 RE and EE in water resource management systems to achieve around 1.6 MW of installed capacity

Project Component 3: Demonstration and scaling up investment in projects Output 3.1.2: Investment projects using ESCOs approach and focused on the use of RE and tailored financial mechanism implemented to reach about 2MW 403,607 0 201,803 201,804 EE in water resource of installed capacity management systems

Output 3.1.3: Workshop, seminars and exposure visits organized to discuss and promote public private investment partnerships to 12,000 $0 $6,000 $6,000 accelerate the deployment of sustainable energy-water nexus initiative

Sub-Total PC3 1,358,231 628,416 522,011 207,803

4.1.1. Mid-term review and terminal evaluation carried out 45,000 0 22,500 22,500 Project Component 4 (PC4): Project Monitoring and Evaluation (M&E) 4.1.2. Project’s progress monitored, documented and 15,000 5,000 5,000 5,000 recommended actions formulated

Sub-Total PC4 60,000 5,000 27,500 27,500 PMC 161,953 53,985 53,984 53,984

Total Project Costs 1,781,484 871,602 608,296 301,588

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ANNEX F: WORK PLAN Year 1 Year 2 Year 3 Activity 1st 2nd 3rd 4th 1st 2nd 3rd 4th 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter Project Component 1: Establishment of a policy and institutional framework conducive to the promotion of energy-water nexus approach and the creation of Energy Services Companies (ESCOs) Output 1.1.1. National platform to discuss synergies between sustainable energy systems and water resource management established Activity 1.1.1.1 Establishment of a Nexus Platform Activity 1.1.1.2. Establishment of a Website Activity 1.1.1.3. Recommendations on how to promote better coordination and a joint approach to energy-water nexus projects/initiatives on an integrated manner Activity 1.1.1.4. Provision of Technical Assistance (TA) services to foster the adoption of sustainable energy-water nexus projects/initiatives Activity 1.1.1.5. Policy and Regulatory Framework Workshops and Reporting Output 1.1.2. Recommendations on how to integrate the gender dimension into energy-water initiatives prepared and presented to decision makers Activity 1.1.2.1. Assessment of how RE and EE initiatives in water resource management systems impact gender roles Activity 1.1.2.2. Recommendation on how to integrate the gender dimension into energy- water initiatives Output 1.1.3. Recommendation on how to improve the policy and regulatory environment to promote ESCOs approach in sustainable energy-water resource management projects developed and presented to decision makers Activity 1.1.3.1. Gap analysis for the development an inclusion of ESCO Activity 1.1.3.2. Recommendation on how to improve the policy and regulatory environment to promote ESCOs Project Component 2: Build capacity to support the integration of RE and EE technologies in water resources management Output 2.1.1. Training material on how to integrate RE and EE technologies in water management system produced

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Activity 2.1.1.1. Development of a training programme and training material on the integration of RE and EE technologies in water management system Output 2.1.2. Training material on development and management of ESCOs and entrepreneurship produced Activity 2.1.2.1. Development of training programme and material on entrepreneurship and development and management of ESCOs Output 2.1.3. CERMI’s staff and other institutional Staff trained using the programmes and modules produced in Output 2.1 and Output 2.2 on a train-the-trainer basis Activity 2.1.3.1. Train trainers on the modules developed in Output 2.1.1 and Output 2.1.2 Output 2.1.4. 10 training sessions (5 for each module) are conducted by CERMI trained staff Activity 2.1.4.1. Deliver 10 training sessions (5 of each model) to interested stakeholders Project Component 3: Demonstration and scaling up investment in projects focused on the use of RE and EE in water resource management systems

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energy-water nexus initiative Activity 3.1.3.1. Workshop, seminars and exposure visits Activity 3.1.3.2. Promotion of public private investment partnerships to accelerate the deployment of sustainable energy-water nexus investment projects Project Component 4: Project Monitoring and Evaluation (M&E) 4.1.1. Terminal evaluation carried out Activity 4.1.1.1 Terminal evaluation 4.1.2. Project’s progress monitored, documented and recommended actions formulated Activity 4.1.2.1. M&E Framework design Activity 4.1.2.2. M&E Framework implementation

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ANNEX G: ABBREVIATIONS AND ACRONYMS

AA Action Agenda ADAD Associação para a Defesa do Ambiente e Desenvolvimento (Association for Defending the Environment and Development) ADEI Agência para o Desenvolvimento Empresarial e Inovação ADPM Associação de Defesa do Património de Mértola AdS Águas de Santiago AEB Águas e Energia de Boavista AECID Agencia Española de Cooperación Internacional y Desarrollo (Spanish Cooperation) AfDB African Development Bank AJAZPUPN Associação dos Jovens Agricultores da Zona Peri-Urbana de Porto Novo ANAS Agencia Nacional de Água e Saneamento (Agency for Water and Sanitation) ANMCV Associação Nacional Municípios Caboverdianos (National Association of the Municipalities of Cabo Verde) APN AS Águas de Porto Novo, AS APP Águas de Ponta Preta ARE Agência de Regulação Economica (Economic Regulatory Agency) BCA Banco Comercial do Atlântico BLLUUP Base Law in Spatial and Urban Planning CABEEP Cabo Verde Appliances & Building Energy Efficiency Project CAPEX Capital Expenditure CAS Código de Água e Saneamento CCS Chamber of Commerce of Sotavento CCISS Câmara do Comércio Indústria e Serviços do Sotavento CERMI Centro para as Energias Renováveis e Manutenção Industrial de Cabo Verde (Centre for Renewable Energy and Industrial Maintenance) CIT Corporate Income Tax CNAS Conselho Nacional de Água e Saneamento CSO Civil Society Organisation CV Cabo Verde CVE Cabo Verde Escudo (currency) DG Distributed Generation DGA National Environment Directorate DGASP Directorate General for Agriculture, Forestry and Livestock DGE Direcção Geral de Energia (General Energy Directorate) DL Decree Law / Decreto Lei DNA Direcção Nacional de Ambiente (National Environmental Directorate) DNEIC Direcção Nacional de Energia, Indústria e Comércio (National Directorate of Energy, Industry and Commerce) DSE Direcção de Servicios Energéticos (Directorate of Energy Services)

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ECOWAS Economic Community of West African States ECREEE ECOWAS Center for Renewable Energy and Energy Efficiency EE Energy Efficiency EIA Environmental Impact Assessment ELECTRA Empresa de Electricidade e Água SARL (National Electricity and Water Utility) ERDF European Regional Development Fund EREF ECOWAS Renewable Energy Facility ESCOs Energy Service Companies ESGAS Estratégia Social e de Género para o Sector da Água e Saneamento (Social and Gender Strategy for the Water and Sanitation Sector) EWM Elemental Water Makers EU European Union FAO Food and Agriculture Organization FASA Water and Sanitation Fund (Fundo de Água e Saneamento) FDI Foreign Direct Investment GDP Gross Domestic Product GEF Global Environment Facility GHG Greenhouse Gas GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GNI Gross National Income GPRSP Growth and Poverty Reduction Strategy Paper HDI Human Development Index HFO Heavy Fuel Oil ICIEG Instituto Caboverdiano para Igualdade e Equidade de Género IDAM Sea water desalination system

IGQPI Instituto de Gestaõ da Qualidade e da Propriedade Intelectual (Institute for Quality Management and Intellectual Property) INDC Intended Nationally Determined Contributions IP Investment Prospectus IPCC Intergovernmental Panel on Climate Change IPP Independent Power Producer IRENA International Renewable Energy Agency LDC Least Developed Countries LFO Liquid Fuel Oil Lux-Dev Luxembourg Development Cooperation Agency MAA Ministério de Agricultura e Ambiente (Ministry of Agriculture and the Environment) MCC Millenium Challenge Corporation MEE Ministry of Economy and Employment

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M&E Monitoring and Evaluation NAPA National Adaptation Programme of Action NEEAP National Energy Efficiency Action Plan (in Portuguese, Plano de Ação Nacional de Eficiência Energética) NGO Non-Government Organisation NPC National Project Coordinator NREAP National Renewable Energy Action Plan (in Portuguese, Plano de Ação Nacional de Energias Renováveis) NSPD National Spatial Planning Directive OBC Community based Associations and Organizations OPEX Operational Expenditure PALOP Países Africanos de Língua Oficial Portuguesa PAGIRE Programa de Ação para a Gestão Integrada de Recursos hidricos (Action Plan for the Integrated Management of the Water Resources) PEDS Plano Estratégico de Desenvolvimento Sustentável (Strategic Plan for Sustainable Development) PLENAS Plano Estratégico Nacional de Água e Saneamento (National Strategic Water and Sanitation Plan) PMU Project Management Unit PNIG Plano Nacional de Igualdade de Género (National Plan for Gender Equality) PPA Power Purchase Agreement PPG Project Preparation Grant PPP Public Private Partnership PSC Project Steering Committee PV Photovoltaic R&D Research and Development RE Renewable Energy REDZ Renewable Energy Development Zones RO Reverse Osmosis SEforALL Sustainable Energy for All SGP Small Grants Programme SIDS Small Islands Developing States SPSP Sectorial Plan for Spatial Plannning SSPRE Sectorial Strategic Plan for Renewable Energy UGPE Energy Projects Management Unit UN United Nations UNDP United Nations Development Programme UNFCCC United Nations Framework Convention on Climate Change UNIDO United Nations Industrial Development Organisation USD United States Dollars WASH Water, Sanitation, and Hygiene Project WB World Bank

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ANNEX H: BASELINE REPORT

ANNEX I: PRE-FEASIBILITY STUDIES

ANNEX J: CLIMATE CHANGE TRACKING TOOL

ANNEX K: CO-FINANCING LETTERS

ANNEX L: UNIDO ENVIRONMENTAL AND SOCIAL MANAGEMENT PLAN (ESMP)

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