CABO VERDE TRENDS AND DEVELOPMENTS Contributed by: Nelson Raposo Bernardo, Joana Andrade Correia, Júlio Martins Júnior and Manuel Esteves Albuquerque, Raposo Bernardo & Associados
transition to a low-carbon economy, the promotion of circular economic systems, the protection of vulner - able communities and the strengthening of national resilience to climate-related risks. The breadth of these objectives reflects a deliberate attempt to align domestic policy with international commitments, including the Paris Agreement, while tailoring imple - mentation to the specific vulnerabilities of an island economy. One of the most consequential features of the law is the formal commitment to achieving carbon neutral - ity by 2050. This target introduces a long-term policy anchor that is intended to guide legislative action, public investment and private sector behaviour over the coming decades. Crucially, the law establishes mechanisms to ensure that this objective is embed - ded in practice. It requires the systematic integration of climate criteria into national and sectoral planning instruments, mandates the consideration of climate impacts in major public investments, and promotes the development of regulatory and economic tools capable of steering market behaviour towards sus - tainability. From an investment viewpoint, this framework sig - nificantly alters the parameters within which projects are conceived, structured and financed. Environmen - tal and climate performance are no longer peripheral considerations. On the contrary, they are increasingly determinative factors in project approval processes, access to public support and eligibility for interna - tional financing. Projects that demonstrate alignment with climate objectives, particularly in areas such as renewable energy, energy efficiency, sustainable transport and resource management, are likely to ben - efit from targeted incentives, including fiscal advan - tages and preferential access to funding mechanisms foreseen in the law. Conversely, the framework introduces a gradual but clear tightening of conditions for activities with higher environmental impact. While the law does not impose immediate restrictions on carbon-intensive sectors, it establishes the legal basis for future regulatory devel - opments that may include stricter emission standards, enhanced reporting obligations and the internalisation of environmental costs. For investors, this implies the
need for forward-looking strategies that anticipate regulatory evolution and incorporate climate risk into project design and valuation. Another defining characteristic of Law No 71/X/2026 is its governance model. The law adopts a multi-level and multi-actor approach, involving central govern - ment, municipalities, regulatory authorities, private entities and civil society in the design, implementa - tion and monitoring of climate policy. This reflects international best practices in climate governance and enhances transparency and accountability. However, it also introduces additional layers of institutional inter - action, requiring investors to engage with a broader set of stakeholders and to navigate a more complex administrative environment. In this sense, Cabo Verde’s climate policy framework functions not only as an environmental safeguard, but as a structural regulatory system that is progres - sively redefining the rules of economic participation. It sets clear direction, creates incentives for sustainable investment and, at the same time, raises the threshold for compliance. For investors willing to align with this trajectory, it offers a stable and forward-looking envi - ronment; for others, it signals an inevitable shift in the conditions under which business will be conducted. From policy to implementation: climate action programme The operational dimension of Cabo Verde’s climate strategy is defined by Resolution No 119/2025, which approves the Climate and Environmental Action Pro - gramme. This programme translates policy objectives into concrete interventions, with a clear focus on resil - ience and sustainability. The programme is grounded in the recognition of Cabo Verde’s vulnerability as a Small Island Devel - oping State. It highlights risks such as prolonged droughts, water scarcity, coastal erosion and impacts on agriculture and fisheries. Without effective mitiga - tion and adaptation measures, these risks could lead to significant economic losses, estimated at up to 3.6% of GDP by 2050. With a total budget of approximately CVE750 mil - lion, the programme is structured around integrated
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