[{"bbox": [72, 106, 301, 139], "category": "Section-header", "text": "## 2. RATIONALE"}, {"bbox": [101, 161, 234, 188], "category": "Section-header", "text": "### 2.1. Context"}, {"bbox": [83, 205, 1145, 285], "category": "Text", "text": "Cabo Verde is a functioning democracy with good standards of rule of law, governance, and a positive record on Human rights. The country has stable political institutions and a well-functioning multiparty parliamentary democracy since 1991, being considered a Good Governance reference in the African Region."}, {"bbox": [83, 297, 1145, 457], "category": "Text", "text": "The EU's longstanding relations with Cabo Verde gained impetus with the establishment of the EU-CV Special Partnership in 2007. The Special Partnership has the broader ambition of achieving technical and normative convergence with the EU and of increasing cooperation around key common interests such as good governance, economic development, security, stability and regional integration. The national strategic Plan for Sustainable Development (PEDS 2017-2020) and the more recent 'Ambition 2030' country strategy matches the EU external policy priorities."}, {"bbox": [83, 468, 1145, 626], "category": "Text", "text": "Despite its lack of groundwater and the fragility of its ecosystem (e.g. increased climatic aridity and the frequency of droughts), Cabo Verde reached lower middle-income status in 2008 building a robust tertiary sector. After that, it remained stranded in its lower middle-income status for most of the decade, being severely impacted by the financial crisis effects in Europe, and only after 2017 it began to experience again economic growth combined with successful contention of the inflation, improvement of macro-economic indicators and poverty reduction. Multi-level relation with the EU contributed to these remarkable achievements."}, {"bbox": [83, 639, 1145, 801], "category": "Text", "text": "Cabo Verde is one of the hardest hit countries in terms of COVID-19 related economic impact: Gross Domestic Product (GDP) plunged -14% in 2020; Public debt /GDP rose from 125 % in 2019 to an estimated (International Monetary Fund - IMF) 140.9% in May 2021. The financial affordability of mitigation and support measures, including critical cash transfers to households and individuals, and the medium term containment of fiscal and balance of payments' risks, are part of the urgent challenges for the new government which is increasingly in need of fiscal space and robust measures to start the recovery. Cabo Verde is yet among those that suffer the most from the climate change."}, {"bbox": [83, 811, 1145, 997], "category": "Text", "text": "With EU's support, Cabo Verde could regain its growth path, showing that it is possible to build back better, through a green and inclusive economic model that supports the country updated Nationally Determined Contribution (NDC) in areas such as sustainable tourism, biodiversity and nature-based solutions. The country's commitment to this new growth paradigm provides an ideal enabling environment for the EU to obtain tangible and visible results within the next 7 years in key areas of its external policy priorities. This will allow to show-case the transformative impact of the 'EU special partnership' and, at the same time, to keep influence on strategic sectors while facilitating EU private investments in the country."}, {"bbox": [83, 1009, 1145, 1223], "category": "Text", "text": "In order to promote this new inclusive and green growth path the EU-CV Multi - Annual Indicative Programme (MIP - EU Cabo Verde 2021 - 2027) identifies two priority areas: i) Governance for Human Development and Equality; ii) Green Economy for decent Jobs and Inclusive Growth. Cabo Verde's political stability and democratic institutions offer the possibility to showcase measurable success with the support of the EU and within the lifespan of MIP. Building on the TEI pillars and national priorities, the following results could be attained by 2027: reaching the national target of 50% Renewable Energy Consumption by 2030, eradicate extreme poverty-fighting growing inequality and boosting the creation of green growth and jobs (all three objectives enshrined in the 'Ambition 2030' national strategy)."}, {"bbox": [83, 1247, 1145, 1645], "category": "Text", "text": "To this end the EU will intervene through various instruments including Budget Support, Blending and Guarantees. Experience has shown however that the effectiveness and timeframe for impact of these interventions will depend to a large extent on the capacity to provide quality technical assistance. The country's ambition in terms of energy transition or reduction of inequalities is great and national policies are sound. However, despite having performing institutions, there is a broad agreement, by both the Government and stakeholders, that capacities are still limited and that in particular *avant-garde* policy areas where the country intends to use innovative approaches, there is a need to provide temporary technical assistance to ensure timely success. These include the design and operationalisation of financial instruments (blending, guarantees) to fund renewable energy sector programmes for both the private and public sectors; the design of financially sustainable inclusions mechanism to fight extreme poverty and promote gender equality; The development of pilot sustainable tourism initiatives - linking community development with environmental protection and climate change adaptation - to explore new market niches; or the creation of innovative incentives to develop the blue economy. In addition, technical assistance is also needed to give impetus to the realisation of the TEI objectives (Priority 2 of the MIP) and enhance collaboration towards joint programing between the EU and MS (including cooperation agencies, embassies and European Development Finance Institutions (EDFIs))."}, {"bbox": [1051, 1690, 1156, 1714], "category": "Page-footer", "text": "Page 5 of 21"}]