Cape Verde is an archipelago in the Atlantic Ocean, located approximately 550 kilometres off the coast of Senegal and is composed of 10 islands, nine of which are inhabited. The capital is the city of Praia and other major cities in the country are Mindelo and Assomada, with Santiago being the largest island. More than half of Cape Verde’s resident population (55.7%) lived on the island of Santiago in 2023 and the municipality of Praia was home to approximately 30.1% of the country’s total population. The island with the smallest share of the population was Brava, with 1.1% of the population.⁴

The islands are characterised by limited resources, exposure to natural disasters and severe and prolonged droughts,⁵ and are thus highly susceptible to the effects of climate change. The country has recently suffered five consecutive years of drought, which caused significant land degradation.⁶

Climate change and natural hazards are already impacting Cabo Verde’s public infrastructure and Cabo Verde is expected to experience more heatwaves and more irregular rainfalls.⁷ The impact of natural disasters has been exacerbated by a limited capacity to manage disaster risk and mainstream climate change resilience in urban development.⁸ Due to the relatively poor river network and lack of high-discharge flows with stable and reliable discharge, the resilience to water scarcity and/or drought is low in the country Approximately 80% of the population reside in the coastal zones prone to sea level rise and 36% live in rural areas and depend on agriculture.⁹ Climate change poses a major threat, as Cabo Verde is one of the most water-scarce countries in the world.¹⁰ In addition, Cabo Verde faces development challenges from multiple structural factors, including insularity, territorial discontinuity, fragility of ecosystems, and scarcity of natural resources like water and arable land.¹¹ The World Bank estimates that the average economic damage from natural disasters, particularly floods, costs the country just under 1% of gross domestic product (GDP) per year.¹²

Cape Verde had a population of 598 682 in 2023 and life expectancy at birth in 2022 was 75 years.¹³ The population is distributed across 155 534 households.¹⁴ From 2019 to 2021 there was a decrease in the average household size, which went from 3.5 to 3.3 but from 2021 to 2022, the average household size went from 3.3 to 3.4,remaining at 3.4 in 2023. CapeVerde’s population remains young and around 27.8% of its total population is under 15 years old, and 16.3%, between 15 and 24 years old. The elderly population (65 years and over) represented 7.2% of the total population in 2023.¹⁵ Poverty and unemployment remain challenges in Cabo Verde. Poverty increased from 26% in 2019 to 31.1% in 2022 and unemployment was at 14.5%. Economic growth is projected at 5.2% in 2024 and 5.4% in 2025, boosted by agriculture, energy, the digital economy, and private consumption. Inflation is projected to average 2.1% over 2024 to 2025 on the back of weaker demand and declining food and energy prices.¹⁶

The country’s economy impacts directly on housing demand. With tourism being the most important sector of the country’s economy, young people move to the most popular islands to find jobs, which increases the demand for housing on these islands. More than half of the housing located in urban areas is of low quality or dilapidated. Data on housing supply in terms of typology is limited but it is estimated that at least 80% of the 140 000 units that were recorded in 2010 were self-built (with materials and labour managed directly by the individual families).¹⁷ Population pressure in urban centres and high construction costs, particularly due to the prices of imported materials, exacerbate the problems of access to adequate and affordable housing. In other islands where jobs are scarce, slums have been growing.¹⁸

The Cape Verdean banking system is developed and Banco de Cabo Verde was established on 29 September 1975, to carry out the duties of central bank and issuer, foreign exchange authority, treasury, commercial and development bank. It also supervises and controls the various institutions operating in the money and financial markets, including the insurance sector and the capital market. 19 The presence of banks in the country has remained unchanged recently and of the seven banks, only three (Banco Cabo-verdiano de Negócios – BCN; Banco Comercial do Atlântico – BCA; and Caixa Económica de Cabo Verde – CECV) were present on the nine inhabited islands.²⁰

Access to housing finance remains uneven despite there being an 82.8% banked rate in Cabo Verde in 2020.²¹ Cape Verdean banks benefit from the refinancing of the Central Bank and customer deposits but the country’s economy is highly dependent on foreign direct investment. Non-performing loans (NPLs) increased from 7.8% in 2022 to 8.7% in June 2023, following the unwinding of COVID-19 credit moratoriums.²² The CaboVerde financial sector is highly concentrated and at the end of 2023 the seven banks in the country held assets equivalent to 130% of GDP. In early 2024, the sale of Portugal’s Caixa Geral de Deposito (CGD)’s majority share in Banco Comercial Atlântico (BCA) neared conclusion and was awaiting central bank approval.²³

In addition to mortgages, a few banks in the country offer other housing-related services such as renovation and restoration. Banco Interatlântico (BI) offers mortgage loans to finance the acquisition, construction and improvement of permanent residences or the acquisition of land for the construction of housing. ²⁴ Banco Comercial do Atlântico offers housing products with up to 100% financing depending on the risk analysis of the client carried out by the bank. The products are intended for new credit for the purchase of apartments or houses for a minimum of 10 years and a maximum of 30 years.²⁵ However, these services only allow a small part of the Cape Verdean population to access financing.

Low and middle income households have other financing levers, mostly informal and based more on social networks. Microcreditors are used by households excluded from the bank loan system to cover the construction costs of their homes. Yet, despite being present on all islands, the microcredit sector in Cape Verde still has a limited reach.²⁶ A majority of Cape Verdeans depend on their own savings, informal savings groups or remittances to pay for their housing. Construction in the country is therefore financed over a long period depending on the amount and frequency of remittances, with some families being in a position to complete a construction within months and others within 10 years or more.²⁷

The subsidisation of housing through public institutions such as Imobiliária, Fundiária e Habitat (IFH) allows vulnerable parts of the population (young people, people with disabilities, and single women) to obtain financial support that they would not have received through the traditional banking system. This subsidy remains limited because the beneficiaries must be able to obtain a bank loan or have savings covering the non-subsidised portion of the property price. ²⁸ There are reforms on financial inclusion and the digitalisation agenda, with the pandemic having triggered the use of mobile payments and internet banking services.²⁹

In Cape Verde, access to housing differs greatly depending on social class, area of residence and gender but most Cape Verdeans prefer to own their homes. The policies put in place by the government do not promote renting but encourage the construction of housing for purchase. However, due to high interest rates and a lack of repayment capacity on the demand side, financing for construction and property purchases is restricted to a very small number of individuals with stable jobs.³⁰ Climate change is expected to have a disproportionate impact on poor households in Cabo Verde due to their higher exposure to natural hazards and the vulnerability of their income.

The prices charged in the Cape Verdean housing market do not allow the majority of the population to live in formal housing and low-cost housing is their only available option. Typically, the minimum mortgage rate and the maximum mortgage rate in the country are 4.9% and 9%,respectively.³¹ The maximum loanto-value (LTV) on a residential mortgage can range between LTV 80% for an interest rate of 8.50%, 80% to 90% for an interest rate of 8.75% and 90% to 100% for an interest rate of 9.00%.³² The price of the cheapest, newly built house by a formal developer or contractor in an urban area in local currency units is CVE3 500 000 (US$34 130) for a house that is 80m2.³³

Typical land costs per square metre in urban areas is approximately CVE15 000 (US$146). The total construction costs per square meter in local currency units for the cheapest, newly built house is approximately CVE40 000 (US$390) per square meter³⁴ and the cost of a standard 50kg bag of cement in local currency units is CVE1 175 (US$11.45).³⁵ The cost of ceramic floor tiling (per square meter) is CVE1 200 (US$11.70).³⁶ The typical rental price for the cheapest, newly built dwelling by a formal developer or contractor in local currency units is CVE25 000 (US$243.78) for a 2 bed apartment.³⁷ However, the rental market is regulated, allowing a maximum rent increase of 8.3% per year but landlord and tenant are free to agree lease terms and conditions. In addition, approximately 30% of households live in rented or leased premises in some way.³⁸ The median national house price, being the middle value of all house prices in the nation (meaning that half of the houses are priced above this value and half are priced below it), is US$109 549.³⁹

Cape Verde has an approximate housing deficit of 8.7% (in terms of households), which corresponds to 11 119 households, that is mainly urban.⁴⁰ The supply of housing in Cape Verde is characterised by a shortage of family residential housing and developed land for housing. The vast majority of Cape Verdean households live mainly in independent or free-standing houses (70.5%) and 28.9% of households live in apartments.⁴¹ Independent houses are houses that are ground floor or duplex surrounded by walls and whose main entrance generally faces a street or land surrounding the building. In Cape Verde 73.8% of households live in accommodation with access to piped water and with regards to source, the majority of households (71.3%) used piped water, with only 11.8% relying on self tanks and 7% sourcing water at a neighbour’s house. A survey conducted in 2023 revealed that 88.4% of households had toilets in their accommodation, with a marked difference between urban (91.1%) and rural areas (78.7%).⁴²

In 2023, the percentage of households living in accommodation with electricity was estimated at 94.3%.⁴³ Due to the country’s geographical position, there is an absence of an interconnected grid across the islands and this results in reduced overall efficiency in electricity generation. ⁴⁴ Access to electricity also varies between urban (95.3%) and rural (90.9%) areas.⁴⁵

Cabo Verde still relies heavily on fossil fuel-based power generation, with renewable energy sources contributing only 17% of the power generation.⁴⁶ A substantial 83% of electricity generation relies on thermal power plants fuelled entirely by imported diesel and other oil derivatives. The remaining electricity generation derives from renewable sources, primarily wind with a minor contribution from solar energy. A significant portion of households in the country rely on biomass as the primary source of energy and as of 2019, 20% of households predominantly used biomass for cooking purposes.⁴⁷

Electricity and water sector operators face significant financial challenges. The energy sector in Cape Verde is managed at the national level and the water sector at the municipal level.⁴⁸ To enhance the viability and performance of the energy sector, Empresa de Electricidade e Água (ELECTRA), the national electricity and water company, separated the electricity and water businesses and started the unbundling of electricity services, alongside other reforms. The overarching objective of the reforms was to address ELECTRA’s precarious financial situation, enhance the operational and financial sustainability of the electricity sector, and foster an environment conducive to private sector investment for the modernisation and expansion of the electrical infrastructure. The Cabo Verdean government expected to complete the legal and operational unbundling by March 2024.⁴⁹ With regards to water, operations of the water sector have been consolidated, moving from a municipality-by-municipality approach to a multimunicipality island-by-island setup.⁵⁰ The government in Cape Verde aims to continue improving access to water and sanitation services and intends to provide 100% of the population with access to safe water from public networks, increasing average per capita freshwater consumption from 43 to 90 litres per day.⁵¹

There is a growing real estate market in Cape Verde. Investments in the real estate market in Cape Verde, especially in large urban centres (Praia, Mindelo) or tourist sites are often reserved for the foreign market.⁵² There is little land reserved for social housing and land may be underused in consolidated urban areas. This underutilisation, combined with the fact that in large cities such as Praia at least half of the households occupy their land informally, causes municipalities to lose significant income and hinders their initiatives to strengthen access to affordable housing.⁵³ Almost all land and properties being registered in Cape Verde now include a search at the local Land Registry for office copy entries of the previous owner’s deed, that can also be undertaken by law firms operating in the country. This search will show who the registered owner is and whether there are any charges on the title historically.⁵⁴

With respect to land management, the municipality makes a certificate of parcel or cadastre available to third parties after the acquisition of land. It issues the title deed (certidão predial) of the land register within one week at a cost of CVE1 243 (US$12.12)⁵⁵. When a third party wants to carry out a construction project, they would need to complete the requisite form, that can be used for new construction or for an extension of an existing permit. The cost of the project is based on the size of the construction project, the projected impact on traffic, and the duration of the project (three, six or 12 months). The building permit is issued within two weeks at a cost of approximately CVE75 000 (US$731.36).

Law 54/99 establishes the basic law for the electricity system, structures the national electricity system and regulates electricity production, transport, distribution, concessions, licenses, sale, tariffs and service quality. Rights and responsibilities in the water sector are well defined by theWater Sanitation Code (CAS) and are implemented through the National Strategic Plan for Water and Sanitation (PLENAS), which includes projections for water demand and plans for how to address these demands. The PLENAS is currently being updated and important changes to the plans for water sourcing are envisaged.⁵⁶

2022 saw the culmination of extensive work to develop a national housing policy by the CapeVerdean Government. The National Housing Plan (PLANAH) 2021- 2030 is the main instrument for implementing the National Housing Policy of Cape Verde, through Resolution No. 25/2020, of February 18. This process is concomitant with the drafting and official publication of the National Policy for Territory and Urban Planning (PNOTU), and sets out the main challenges faced in the housing sector.⁵⁷ The national housing policy of CapeVerde and PLANAH were conceived out of the failure of the existing regulatory apparatus for affordable housing. PLANAH provides a budget of CVE7 billion (US$68 260 051) for the development of more than 190 urban plans at the local level. This will include the construction of social housing, the development of housing areas, the regeneration of housing, the development and monitoring of urbanisation plans, and the strengthening of the institutional legal framework. ⁵⁸

In the context of promoting its development objective, CaboVerde is seeking the interest of investor and development partners in key sectors, particularly energy and water. For the energy sector, the government is looking to mobilise funding for wind and solar independent power producers (IPPs), energy storage solutions and grid reinforcement, e-mobility, and energy efficiency measures.⁵⁹ For the water and sanitation sector, the government is looking for funding to provide access to sustainable energy for mobilisation and distribution of desalinated water intended for human consumption.⁶⁰

The government, through different Ministries, has instituted a range of reforms aimed at promoting investment in renewable energy, including import duty exemptions and partnerships with private banks to increase access to green financing. In addition, Cabo Verde’s 2023 State Budget Law introduces new incentives, such as an exemption for imports of solar panels, batteries, wind turbines and equipment’s to install renewable energy, both for large and small scales.⁶¹ Additionally, to incentivise the adoption of solar panels, the Ministry of Finance and Business Development (MOF) partnered with local banks to offer reduced interest rates on loans for households and micro and small companies seeking to install solar panels. The government plans to more than double the installed renewable energy capacity over the coming years.⁶²

By 2030, 24 000 new homes will be required to meet demand.⁶³ The housing deficit is largely urban in nature, and an annual average of between 1700 and 2000 units will be required.⁶⁴ Given that Cabo Verde is highly susceptible to the effects of climate change and damage from natural disasters such as floods, building resilience in this regard would need to be a top priority. The authorities in Cape Verde estimate that to address the climate challenge would require funding of at least two billion euros to implement a 10-year action plan targeted at reforms and investments to increase the climate resilience of the local economy. ⁶⁵

Not all official government websites are up to date, and some documents would benefit from being published in English. The data published by Banco de Cabo Verde is informative in several respects but should be further disaggregated to speak specifically to housing needs and supply and by income level. The National Institute of Statistics can be a reliable source of information and data on the county in general and housing in particular when its website is accessible, but it could also benefit from incorporating English publications or translating its publications into English.

Banco Comercial do Atlântico (BCA): www.bca.cv

Banco Interaltântico: www.bi.cv

Kaps Habitat: www.kaps-habitat.com

Fair Moov: www.fairmoove.fr

Instituto Nacional de Estatística: www.ine.cv/

Banco de CaboVerde: www.bcv.cv

Brazil will help Cape Verde draw up municipal housing plans and later in 2024 the two countries will sign a protocol to this effect, with the support of UN-Habitat. Mariana Falcão Dias, analyst of cooperation projects with international organisations at the Brazilian Cooperation Agency (ABC), has said, “We will ensure that there is a technical assistance and social housing programme connected to the municipal councils and that they can also develop their own housing programmes and implement them.”66 The Brazilian government, which has had a cooperation with UN-Habitat for over 25 years, will also support Cape Verde in the management of condominiums, urbanisation and construction inspection.

The management of the State’s housing stock, land use planning, project development, exchange and technical assistance are other areas in which the Brazilian Government will support Cape Verde. In addition, Cape Verde’s Secretary of State for Foreign Affairs and Cooperation, Miryan Vieira, said that the new cooperation framework between the two countries will cover climate change and environmental preservation and the private sector

1. Amaral,A. (2024). Government wants electricity in all homes by 2026. Expresso das Ilhas. 9 May 2024. https://shorturl.at/I0QCJ (Accessed 11 August 2024).
2. Balai CaboVerde. (2024). Minister points out considerable challenges in the housing sector and highlights investments made by the Government. Inforpress. 12 June 2024. https://shorturl.at/GJGOj (Accessed 11 August 2024).
3. Ribeiro, S. (2024).Around
4. thousand homes were rehabilitated under the PRRA – Minister. Expresso das Ilhas. 12 Jun 2024. https://shorturl.at/lO0OB (Accessed 11 August 2024). 4 National Institute of Statistics (CapeVerde). Statistics on the Living Conditions of Households IMC 2023. https://shorturl.at/LzTYQ (Accessed 11 August 2024). Pg. 20.
5. Adaptation Fund (2022). Proposal for CaboVerde (country eligibility). https://shorturl.at/jnfwD (Accessed 11 August 2024). Pg. 24.
6. IMF (2024).Third Review Under the Extended Credit Facility Arrangement. IMF Country Report No. 24/9. Pg. 131.
7. IMF (2023). Climate Public Investment Management Assessment (C-PIMA). https://tinyurl.com/ywp29eme (Accessed 11 August 2024). Pg. 6.
8. IMF (2023). 2023 Article Iv Consultation, Second Review Under the Extended Credit Facility Arrangement, and Request for Modification of a Performance Criterion. Pg. 51.
9. See footnote 5. Pg. 53.
10. See footnote 6. Pg. 6.
11. Ibid. Pg. 16.
12. See footnote 6. Pg. 50.
13. World Bank. CaboVerde Overview. https://data.worldbank.org/country/cabo-verde (Accessed 11 August 2024).
14. See footnote 4. Pg. 18.
15. See footnote 4. Pg. 19.
16. African Development Bank (2024).African Economic Outlook 2024. Pg. 238.
17. Governo de CaboVerde (2019). Perfil do sector de Habitação CaboVerde 2a Edição. https://tinyurl.com/ms2kavp2 (Accessed 11 August 2024). Pg. 18.
18. CGTN Africa (2023). China steps in to ease housing challenge in CapeVerde. https://tinyurl.com/kb7cbjuk (Accessed 11 August 2024).
19. Banco de CaboVerde (2024). https://tinyurl.com/yzsu677v (Accessed 11 August 2024).
20. Banco de CaboVerde (2022). CapeVerdean Payment System Report – 2020. https://tinyurl.com/auj8v843 (Accessed 11 August 2024). Pg. 17.
21. Ibid. Pg. 15.
22. See footnote 16.
23. IMF (2024). Fourth Review Under the Extended Credit Facility Arrangement, Request for Modifications of Performance Criteria. IMF Country Report No. 24/257. Pg. 13.
24. Banco Interatlântico. Crédito in Habitação. https://tinyurl.com/2mhaj85e (Accessed 11 August 2024).
25. Banco Comercial do Atlântico. https://tinyurl.com/ye6hch4y (Accessed 11 August 2024).
26. See footnote 17. Pg. 114.
27. Ibid.
28. Imobiliária, Fundiária e Habitat (IFH). https://tinyurl.com/uyn6z6k6 (Accessed 11 August 2024).
29. See footnote 8. Pg. 13.
30. See footnote 17. Pg. 115.
31. Banco Caboverdiano de Negócios. https://bcn.cv/pt_PT/particulares/particulares-credito/particulares-creditohabitacao/ (Accessed 11 August 2024).
32. Ibid.
33. Interview with Julia Monteiro, Employee of IMOR, Mediação Imobiliaria e Representações, Lda (https://www.imor.cv/inicio/). 1 August 2024.
34. Ibid.
35. SOCIEX – Sociedade Cabo-Verdiana de Importação e Exportação, SA. https://www.sociex.cv/wpcontent/uploads/2023/02/Precario-Cimento-Portland-425-R.pdf (Accessed 11 August 2024).
36. See footnote 33.
37. Ibid.
38. See footnote 17. Pg. 18.
39. Properstar (2024). CapeVerde: housing price and price/m2. https://www.properstar.co.za/cape-verde/houseprice (Accessed 21 August 2024).
40. See footnote 17. Pg. 18.
41. See footnote 8. Pg. 25.
42. See footnote 4. Pg. 31.
43. Ibid.
44. IMF (2023).Technical Assistance Report-Climate Policy Diagnostic. https://shorturl.at/msF2e (Accessed 11 August 2024). Pg. 35.
45. See footnote 4. Pg. 27.
46. See footnote 23. Pg. 28.
47. See footnote 23. Pg. 30.
48. See footnote 6. Pg. 35.
49. See footnote 23. Pg. 33.
50. See footnote 6. Pg. 55.
51. See footnote 23. Pg. 53.
52. See footnote 17. Pg. 18.
53. Ibid. Pgs. 18-20.
54. Judicare. Buying Property in CapeVerde. https://shorturl.at/yKgvi (Accessed 11 August 2024).
55. Doing Business (2020). Economy Profile CABO VERDE. Pg. 24.
56. See footnote 23. Pg. 20.
57. FAOLEX. Resolution No. 2/2022 approving the CapeVerde National Housing Plan 2021-2030 (PLANAH).
    https://faolex.fao.org/docs/pdf/cvi207677.pdf. (Accessed 11 August 2024).
58. Conselho de Ministros (2022). Boletim Oficial n°2. Resolução n2/2022 :Aprova o Plano Nacional de Habitação de CaboVerde 2021-2030. 7 January 2022. Pgs. 53-54.
59. See footnote 23. Pg. 26.
60. Ibid.
61. Ibid.
62. See footnote 33. Pg. 31, 32.
63. See footnote 58. Pg. 53.
64. See footnote 17. Pg. 18.
65. See footnote 8. Pg. 15.
66. Amaral,A. (2024). Government wants electricity in all homes by 2026. Expresso das Ilhas. 12 Jul 2024