Cabo Verde - Improving Connectivity and Urban Infrastructure in Cabo Verde Project : Additional Financing

Overview & Synopsis

The development objective of Improving Connectivity and Urban Infrastructure in Cabo Verde Project is to improve access to climate-resilient transport and urban infrastructure for selected project areas in the recipient's territory. This Paper seeks approval for an Additional Financing (AF) in the amount of US$40 million, of which US$30 million from IDA Crisis Response Window (CRW) for the project. The AF builds on a well-performing parent operation and is proposed in response to emerging investment needs identified during implementation, as well as urgent post-disaster recovery and resilience priorities following the 2025 heavy rainfall events. The AF leverages existing institutional arrangements, safeguards instruments, and a prepared pipeline of investments, allowing for rapid scale-up without changes to the Project Development Objective (PDO) or core project architecture. The AF comprises three complementary types of activities that together define its scope and rationale. First, the AF supports the scale-up of selected investments, expanding the geographic coverage or scope of interventions identified under the parent project but not fully financed within the original envelope. Second, it addresses higher cost estimates resulting from refined technical designs, notably the incorporation of enhanced climate-resilient standards in urban upgrading and road rehabilitation works. Third, and critically, the AF includes post-disaster recovery and resilient reconstruction activities in areas affected by the 2025 floods, financed through IDA’s CRW. Accordingly, the AF will: (i) expand the scope of priority investments identified following rapid commitment of the initial budget; (ii) support Cabo Verde’s post-disaster recovery and resilient reconstruction needs following the August 2025 floods in the Barlavento islands and the November 2025 heavy rains in Santiago; (iii) cover higher-than-anticipated costs resulting from design changes, including enhanced climate-resilience standards and delays linked to extreme weather and logistical constraints; and (iv) strengthen Environmental and Social (E&S) risk management, labor practices, and fiduciary systems, in line with implementation experience and recent Implementation Status and Results Report (ISR) findings.