By Ayomide Otitoju
The African Development Bank (AfDB) and the Government of São Tomé and Príncipe have reinforced their development partnership with $18 million in new grant financing, signed on Thursday at the São Tomé and Príncipe Investment Forum in Brussels. The funding targets energy, climate-smart agriculture, and integrated water-energy-food security initiatives.
The first agreement provides $7.5 million for the third phase of the Fiscal Sustainability and Resilience Program – Supplementary Financing (FSERP-SF), part of a budget support operation launched in December 2023. This brings the total budget support under the program to $20 million. The program supports reforms in fiscal sustainability and energy sector transition, including improvements in public procurement, customs, debt management, governance of the national utility, tariff adjustments for cost recovery, and accelerated adoption of renewable energy. The Nigeria Trust Fund (NTF), administered by AfDB, finances this phase.
The second agreement channels resources from the Global Environment Fund (GEF) into the Co-Management of Climate Extremes for Agriculture and Fisheries Resilience Project (PRIASA III). With a total investment of $18.9 million—$10 million from AfDB and $8.9 million from GEF—the project aims to strengthen agriculture and fisheries value chains and deploy climate-resilient technologies to protect livelihoods against droughts, floods, and water scarcity. PRIASA III will enhance value chains, reduce vulnerability through climate-smart practices, and ensure integrated climate adaptation in agriculture and fisheries.
The third agreement provides $1.4 million for a Project Preparation Facility (PPF) under the Water-Energy-Food Security Nexus initiative (NEW-ERA). Over two years, the facility will develop studies and master plans for integrated water resources management, including multipurpose dam development, a water treatment plant, climate-resilience measures, and city-wide sanitation planning. The initiative aims to expand access to potable water, explore hydropower potential, and improve food production by 2030 while creating jobs and strengthening governance.
Pietro Toigo, AfDB Country Manager for Angola and São Tomé and Príncipe, highlighted the significance of the agreements: “As São Tomé and Príncipe presents its National Development Plan and engages investors, these three financing agreements demonstrate the Bank’s commitment as a provider of patient capital and risk mitigation.”
As of 30 November 2025, AfDB’s active portfolio in São Tomé and Príncipe totals $89.4 million across 12 financing instruments, with a disbursement ratio of 49.5 percent and an average portfolio age of 4.2 years. The portfolio prioritizes agriculture (43 percent), multisector operations (23 percent), finance (17 percent), energy (15 percent), and water (2 percent), reflecting a strong focus on resilience, food security, energy transition, and macroeconomic reforms, alongside engagement in green and blue economy initiatives.
