African Development Fund approves $24.5 million grant to shift São Tomé and Príncipe toward clean energy

The African Development Fund (ADF) approved a $24.5 million grant package for São Tomé and Príncipe on April 23, 2026, anchoring a total $30 million investment aimed at transforming the island nation’s energy sector, according to a press release by the African Development Bank Group. The funding underpins the Energy Transition, Efficiency, and Expansion Project (ETREEP), which targets more than 200,000 citizens across both islands. Implementation runs from May 2026 through November 2031.

São Tomé and Príncipe currently relies on imported fossil fuels for nearly 95% of its electricity generation, at a production cost of $0.30 per kilowatt-hour — one of the highest in Africa. Daily power outages lasting three to four hours disrupt hospitals, schools, and businesses. Technical and commercial losses consume more than 34% of electricity generated before it reaches consumers. ETREEP is a cornerstone of the country’s National Energy Compact, which commits to universal electrification and a 50% renewable energy share by 2030.

The project will construct a new 4-megawatt peak solar photovoltaic plant paired with a 2 MWh Battery Energy Storage System on Príncipe Island. On São Tomé Island, 1,000 energy-efficient LED streetlights will replace outdated fixtures. Over 40,000 prepaid electricity meters will be installed across both islands, and 2,000 new electricity connections will be created. Billing and collection rates are expected to rise from 50% to 80%, while non-technical losses are targeted to fall from 34% to 20%.

The project will also strengthen the Empresa de Água e Eletricidade (EMAE) and the Ministry of Infrastructure and Natural Resources through capacity building and technical training. Green skills training will be provided to 200 young people in solar and electrical maintenance, targeting a population where youth represent nearly 79% and face unemployment rates as high as 22.6%. Pietro Toigo, African Development Bank Country Manager for Angola and São Tomé and Príncipe, stated: “This project is more than infrastructure. It is a statement of belief — that small island nations deserve modern, sustainable energy, and that with the right partnerships, they can achieve it.” The African Development Fund is contributing $19.02 million from its ADF-16 allocation and $5.43 million from the Transition Support Facility Pillar I.

An additional $5 million in parallel financing from other partners is expected, with the Government providing in-kind support. The project targets 50,000 households to benefit directly. Improved street lighting and new employment opportunities are among the tangible outcomes noted for women, who bear a disproportionate burden of unreliable energy. The modernisation of the national dispatch centre will support the integration of additional renewable energy sources. Together, these measures position São Tomé and Príncipe to reduce its dependence on diesel power and meet its 2030 clean energy targets.