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  • Closed Compact Report:  Closed Compact Report: Cabo Verde Compact
  • July 2017

Infrastructure Project

  • $78,760,208Original Compact Project Amount
  • $82,542,708Total Disbursed

Estimated Benefits

Estimated benefits correspond to $82.5 million of project funds, where cost-benefit analysis was conducted.

Estimated Benefits for Activities
Activity Time Estimated Economic Rate of Return (ERR) over 20 years Estimated beneficiaries over 20 years Estimated net benefits over 20 years
Roads and Bridges Activity At the time of signing 13.6 percent 73,622 $4,400,000
Upgrade and Expansion of the Port Activity At the time of signing 22.7 percent 347,111 $80,400,000

The Economic Rate of Return for the Roads and Bridges Activity will be updated as part of the independent evaluation of the activity.

Project Description

Inadequate roads, ports, and ships made access to social services and employment opportunities in Cabo Verde difficult and severely constrained economic activities such as tourism, manufacturing, and agricultural production. Cabo Verde’s road network covered 1,350 km across nine inhabited islands. While the country had made progress in expanding road network coverage, a lack of investment left the basic network incomplete, and lack of proper maintenance led to deterioration. Being an archipelago, Cabo Verde had port facilities on each of the country’s islands, including two major ports located adjacent to Cabo Verde’s two largest cities: the Port of Praia on the island of Santiago, and Porto Grande on the island of São Vicente. These two ports handled most international cargo imported to or exported from Cabo Verde, in addition to supporting domestic cargo flows to Cabo Verde’s smaller and less populated islands. The Port of Praia was the country’s busiest port accounting for approximately 50 percent of the total volume of port traffic, but was suffering from inefficient cargo handling operations, severe terminal congestion, and inadequate services. These inadequacies served as a constraint to economic development and the efficient movement of people and goods throughout Cabo Verde. The compact’s Infrastructure Project worked to increase integration of internal markets and reduce transportation costs by improving road infrastructure on the islands of Santiago and Santo Antão, and funding a major expansion of the port in the capital city of Praia on the island of Santiago. The Infrastructure Project included two activities:

  • The Roads and Bridges Activity: This Activity was intended to achieve basic connectivity and improve mobility on two targeted island networks by: (a) closing network gaps, and (b) ensuring all-weather and reliable access both to intra-island markets and services as well as transportation linkages on the two targeted islands.
  • The Port of Praia Activity: The Port of Praia Activity was designed to maximize the port’s existing short-run operational capacity and productivity and create new infrastructure and facilities to address the port’s berth, space and geometry challenges.

Due to the complexity and scope of the port expansion plan, the Port Activity was designed in two phases. Phase I involved improving quayside and off-terminal container handling facilities; providing for a second access road and breakwater; and initiating preparatory activities – including geotechnical studies, cargo/passenger market studies, feasibility studies, and environmental impact assessments – needed for long-term expansion. The original proposal’s Phase II included extending the quay and creating space for a new two-berth specialized terminal container storage area. However, required design changes and a 29 percent depreciation of the dollar against local currency from 2006 to 2008 resulted in a shortage of funds to complete Phase II under the compact. As a result, Cabo Verde funded construction of the second phase of the port through a concessional loan guaranteed by Portugal instead of MCC funding.

By the end of the compact’s mandated five-year period, the Infrastructure Project funded construction of four bridges on the island of Santo Antão, which ensured reliable access to two major urban areas, even during heavy rains that regularly flood nearby rivers. It also rehabilitated two heavily traveled east-west roads and reconstructed one rural road linking an isolated agricultural and fishing community to Santiago’s main road network. Finally, improvements at the Port of Praia were made to modernize the facilities and increase capacity, rehabilitating Quay 2 and constructing a new cargo village and access road. The Government of Cabo Verde-financed second phase of port improvements, which included a Quay 1 extension and container yard, harbor dredging, and additional cargo village buildings, was completed in 2013.

Evaluation Findings

Roads and Bridges Activity

The roads and bridges performance evaluation will analyze the road usage patterns, existing maintenance regime, and overall transport market structure. Based on this analysis, it will use an HDM-4 model[[Highway Development and Management (HDM-4) is a software program developed by the World Bank for the analysis, planning, management and appraisal of road maintenance, improvements and investment decisions.]] to estimate the economic effects of the rehabilitated road network on vehicle operating cost savings and time savings, and the resulting effects on household incomes and business revenues, as well as the economic rate of return for the project.

Status of the evaluation
Component Status
Endline Final results expected in 2019.

Port Activity

The Port of Praia performance evaluation was designed to assess the success or failure of the MCC investment in, among other things, maximizing operational capacity and productivity and alleviating the Port’s berth, space and geometry problems. More specifically, it seeks to (1) determine what impacts and consequences the MCC investment in the Port of Praia had on port operating efficiency, competitiveness and trade enhancement; and to (2) ascertain ways in which benefits resulting from the MCC investment could have been increased without additional cost through better methods of project preparation, prior institutional reform or better oversight and control during implementation.

Status of the evaluation
Component Status
Endline Final results expected in 2017

Key performance indicators and outputs at compact end date

Key performance indicators and outputs at compact end date
Activity/Outcome Key Performance Indicator Baseline End of Compact Target Quarter 1 through Quarter 20 Actuals (as of Jun 2012) Percent Compact Target Satisfied (as of Jun 2012)
Roads and Bridges Activity Average Annual Daily Traffic Road for all roads (days)
  • The negative rate of Percent Compact Target Satisfied values for traffic counts at the compact closeout may stem from possible traffic diversion during construction. The forthcoming evaluation will provide more information on this result.
469 591 225 -200%
Average Roughness Road for all roads (IRI) 19.5 3.3 3.3 100%
Kilometers of roads completed 0 40.6 40.6 100%
Number of days per year that bridges are not passable 8 0 0 100%
Savings on transport cost from upgraded roads and bridge improvements (millions USD) 0 1.9 TBD TBD
Upgrade and Expansion of the Port Activity Tons per year 482,000 710,543 704,674.7 99.17%
Volume of goods shipped between Praia and other islands (tons) 137,995 220,741 187,922.2 85.13%