The African Development Bank Group and the Government of São Tomé and Príncipe have signed three grant aid agreements totaling $18 million to strengthen energy supplies, climate-smart agriculture, and integrated water, energy, and food security. These efforts are expected to improve the livelihoods and business conditions of small and medium-sized enterprises throughout the island nation.
The agreement, signed on the sidelines of the São Tomé and Principe Investment Forum in Brussels, strengthens the country’s long-standing development partnership and signals renewed momentum around reforms that directly impact small, medium, and micro enterprises.
The initial agreement includes $7.5 million approved for supplemental financing for the third phase of the Fiscal Sustainability and Resilience Program. This budget support increases the program’s total funding to $20 million, which will be disbursed directly into the national budget to support macroeconomic stability and structural reforms.
The program focuses on fiscal sustainability and energy sector transition. Key reforms target public procurement, customs administration, debt management, as well as improving the governance of domestic power companies. Planned tariff adjustments aimed at recovering costs and encouraging the introduction of renewable energy are expected to stabilize electricity supplies, which are a major constraint for small and medium-sized enterprises in sectors such as manufacturing, services, and agricultural processing. This phase will be funded through the Nigeria Trust Fund managed by the African Development Bank.
The second agreement supports the Global Environment Facility-funded Collaborative Management of Climate Extremes for Agriculture and Fisheries Resilience project known as PRIASA III. With a total investment of $18.9 million, the project aims to strengthen agriculture and fisheries value chains while introducing climate-resilient technologies. Its focus is on protecting smallholder farmers, fishers and agribusinesses from the growing risks of drought, floods and water scarcity that continue to disrupt food production and local incomes.
The third agreement provides $1.4 million under a project preparation facility related to the NEW-ERA Water, Energy, and Food Security Nexus Initiative. The facility will fund technical research and master planning for integrated water resources management over a two-year period. Planned areas of work include multipurpose dams, water treatment systems, sanitation programs, and climate change measures that support both households and production activities.
According to the bank, the reserve facility is expected to enable future investments that will expand access to safe drinking water by 2030, support food production, explore hydropower potential and create jobs, with clear knock-on effects for local businesses and value chains.
The African Development Bank said the agreement reflects its commitment to provide long-term capital and risk mitigation support as Sao Tome and Principe seeks to attract private sector investment. As of November 2025, the Bank’s active portfolio in the country was approximately $89.4 million, with a focus on agriculture, energy transition, climate resilience, and macroeconomic reform, sectors widely seen as critical to small business growth, job creation, and inclusive economic development.
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