Cape Verde Turns to China to Develop São Vicente as Northern Economic Hub
Cape Verde and China Machinery Engineering Corporation have signed an MoU covering energy, water, agriculture and transport projects aimed at developing São Vicente and the northern islands The cooperation includes power infrastructure, desalination, wastewater reuse, precision irrigation and maritime connections between São Vicente, Santo Antão and São Nicolau The agreement. . .
Cape Verde and China Machinery Engineering Corporation have signed an MoU covering energy, water, agriculture and transport projects aimed at developing São Vicente and the northern islandsThe cooperation includes power infrastructure, desalination, wastewater reuse, precision irrigation and maritime connections between São Vicente, Santo Antão and São NicolauThe agreement comes as Cape Verde seeks to improve inter-island connectivity and diversify economic activity beyond tourismCape Verde and China Machinery Engineering Corporation (CMEC) have signed a memorandum of understanding to develop infrastructure in energy, water, agriculture and transport as the government seeks to strengthen São Vicente and the northern islands as an economic center. The agreement was signed on August 11, according to the Cape Verdean government, and provides a framework for medium- and long-term cooperation under which CMEC could mobilize technology, engineering expertise, investment and financing for priority projects. The proposed cooperation includes the rehabilitation and modernization of thermal power plants, new electricity infrastructure and storage systems, desalination and wastewater reuse, precision irrigation and the rehabilitation of the Poilão Dam. It also covers the development of São Vicente, Santo Antão and São Nicolau, including projects around the South Bay, the Cabnave waterfront and maritime connections between the islands. The focus on connectivity comes as weak links between Cape Verde's islands continue to constrain the expansion of economic activity beyond tourism. The World Bank said in its July 2026 Economic Update that limited inter-island connectivity fragments domestic markets, raises transport costs and constrains private-sector development, tourism diversification and domestic value chains. This makes São Vicente particularly important to Cape Verde's diversification plans. The government is seeking to develop the island as a center for logistics, maritime services, tourism and industry, while preparing investment zones covering tourism, industry and logistics and linking them to the island's Maritime Special Economic Zone. Better maritime connections and supporting infrastructure could make it easier to move goods, people and services between São Vicente and the other northern islands, while improving the conditions for businesses operating across those markets. The proposed energy and water investments also address constraints affecting economic activity. Desalination, wastewater reuse and precision irrigation could improve water availability for agriculture, while new electricity infrastructure and storage could support industrial activity and the country's transition towards renewable energy. The projects therefore extend beyond São Vicente's transport links to the basic infrastructure needed to support production and investment. Cape Verde is seeking to diversify an economy that remains heavily dependent on tourism. The World Bank said the economy grew 6. 3% in 2025, supported by strong tourism activity, but expects growth to slow to 4. 8% in 2026. It has identified stronger inter-island connectivity as important to unlocking private investment and creating opportunities outside the tourism sector. The proposed cooperation with CMEC fits into that broader strategy, but the August 11 agreement remains a framework rather than a confirmed investment package. Cape Verde and CMEC have not disclosed a financial value for the projects covered by the MoU, nor have they provided details on which projects will move first, their financing structures or implementation timelines. The economic impact will therefore depend on how the proposed projects are selected, financed and executed. The cooperation also comes as Cape Verde and China mark 50 years of diplomatic relations in 2026. The two countries upgraded their relationship to a strategic partnership in 2024, providing a broader framework for economic and infrastructure cooperation. By Cynthia Ebot Takang