ADB, São Tomé and Príncipe Sign $18m in Adaptation, Energy Transition Financing

The African Development Bank Group and the Government of São Tomé and Príncipe have signed three new grant financing agreements worth a combined $18 million, strengthening a development partnership centred on economic resilience, energy transition and climate adaptation.

The agreements were signed at the São Tomé and Príncipe Investment Forum in Brussels and will support programmes in energy reform, climate-smart agriculture, fisheries and integrated water, energy and food security.

The largest component is a $7.5 million grant for the third phase of the Fiscal Sustainability and Resilience Programme–Supplementary Financing, a budget-support operation launched in December 2023. The new financing brings the programme’s cumulative value to $20 million, with funds disbursed directly into the national budget.

The programme is structured around two pillars: fiscal sustainability and energy sector transition. Under its fiscal reforms, the government has committed to strengthening public procurement, customs administration and debt management.

On energy, a priority identified in the country’s National Development Plan, the programme supports improved governance of the national utility, tariff reforms aimed at cost recovery and an accelerated shift towards renewable energy sources. This phase is financed through the Nigeria Trust Fund, administered by the African Development Bank.

A second agreement channels resources from the Global Environment Facility into the Co-Management of Climate Extremes for Agriculture and Fisheries Resilience Project, known as PRIASA III. The project seeks to strengthen agriculture and fisheries value chains while introducing climate-resilient technologies to protect livelihoods from droughts, floods and water scarcity.

With total financing of $18.9 million, $10 million from the African Development Bank and $8.9 million from the Global Environment Facility, the project will be implemented through three components. These include boosting value chains and socio-economic benefits, reducing climate vulnerability through technology deployment and capacity building, and ensuring effective project management to support integrated climate adaptation in agriculture and fisheries.

The third agreement provides $1.4 million from the Project Preparation Facility for the Water–Energy–Food Security Nexus under the NEW-ERA initiative. Over a two-year period, the facility will finance studies and master plans for integrated water resources management, including plans for a multipurpose dam, a water treatment plant, climate-resilience measures and a city-wide sanitation system.

The preparatory work is intended to unlock future investments aimed at achieving universal access to safe drinking water, exploring hydropower potential and improving food production by 2030. The initiative is also expected to strengthen governance, build stakeholder capacity, create jobs and support the country’s climate commitments.

Pietro Toigo, the African Development Bank’s country manager for Angola and São Tomé and Príncipe, said the agreements demonstrated the Bank’s long-term commitment to the country. “As São Tomé and Príncipe presents its National Development Plan to the global community and engages investors to power its private sector, these financing agreements signal that the Bank stands ready to provide patient capital and risk mitigation,” he said.

As of 30 November 2025, the African Development Bank Group’s active portfolio in São Tomé and Príncipe stood at about $89.4 million across 12 financing instruments. Agriculture accounts for the largest share of the portfolio, followed by multisector operations, finance, energy and water. The portfolio reflects a focus on resilience, food security, energy transition and macroeconomic reform, alongside growing engagement in the green and blue economy and financial infrastructure.