The African Development Bank Group and the Government of São Tomé and Príncipe have signed three grant agreements valued at $18 million to strengthen energy supply, climate-smart agriculture and integrated water-energy-food security, moves expected to improve livelihoods and operating conditions for small businesses across the island nation.
The agreements were concluded on the sidelines of the São Tomé and Príncipe Investment Forum held in Brussels, reinforcing the Bank’s long-standing development partnership with the country and signalling renewed momentum around reforms that directly affect micro, small and medium-sized enterprises.
The first agreement involves $7.5 million approved for the third phase of the Fiscal Sustainability and Resilience Programme – Supplementary Financing. This budget support raises total funding for the programme to $20 million and will be disbursed directly into the national budget to support macroeconomic stability and structural reforms.
The programme places strong emphasis on fiscal sustainability and the transition of the energy sector. Key reforms target public procurement, customs administration and debt management, alongside governance improvements in the national electricity utility. Planned tariff adjustments aimed at cost recovery and faster adoption of renewable energy are expected to stabilise power supply, a critical constraint for SMEs in sectors such as manufacturing, services, and agro-processing. This phase is financed through the Nigeria Trust Fund administered by the African Development Bank.
The second agreement backs the Co-Management of Climate Extremes for Agriculture and Fisheries Resilience Project, known as PRIASA III, funded by the Global Environment Facility. With a total investment of $18.9 million, the project is designed to strengthen agriculture and fisheries value chains while deploying climate-resilient technologies. The focus is on protecting small-scale farmers, fishers and agribusinesses from the growing risks of droughts, floods, and water scarcity, which continue to disrupt food production and rural incomes.
The third agreement provides $1.4 million under a Project Preparation Facility linked to the NEW-ERA Water-Energy-Food Security Nexus initiative. Over a two-year period, the facility will finance technical studies and master plans for integrated water resources management. Planned areas of work include a multipurpose dam, water treatment systems, sanitation planning and climate-resilience measures that support both households and productive activities.
According to the Bank, the preparation facility is expected to unlock future investments that will expand access to safe drinking water, support food production, explore hydropower potential and create jobs by 2030, with clear spillover benefits for local enterprises and value chains.
The African Development Bank said the agreements reflect its commitment to providing long-term capital and risk mitigation support as São Tomé and Príncipe seeks to attract private sector investment. As of November 2025, the Bank’s active portfolio in the country stands at about $89.4 million, with a strong focus on agriculture, energy transition, climate resilience and macroeconomic reforms, sectors widely seen as critical to SME growth, job creation and inclusive economic development.
