Legal update/Cabo Verde: New Legal Framework for Public-Private Partnerships (PPP)

Cabo Verde has approved a new Law which defines the general rules applicable to the State’s actions in the identification, evaluation, tendering and awarding of projects, as well as in the management of public-private partnership (PPP) contracts, according to official legal database Legis-PALOP+TL.

As of May 9, 2024, within the scope of public-private partnerships with the State of Cabo Verde, private partners may be any person who offers guarantees of suitability, technical qualification and financial capacity and meets the requirements set out in each public procurement procedure, provided that the project: Has a gross cost to the public sector of more than 5,000,000,000 ECV (around USD 50,000,000); Has an investment of more than 1,000,000,000 ECV (around USD 10,000,000).

And affects one of the following sectors: Airport; Ports; Road; Energy; Electronic communications; Water and sanitation; Maritime transportation between islands; Health services.

The main bodies responsible for PPPs are:

  • The Council of Ministers responsible for approving or rejecting the feasibility studies for PPP projects;

  • The Ministry of Finance and Business Development (MFFE) is responsible for submitting feasibility studies for PPP projects to the Council of Ministers;

  • The Privatization, Public-Private Partnerships and Concessions Service, part of the State Business Sector Monitoring Unit (UASE), responsible for submitting the list of bids to the MFFE and monitoring the public procurement procedure, which complies with the 2015 Public Procurement Code, as last amended in 2020; and

  • The Ministry of Agriculture and Environment (MAA) responsible for ensuring that PPP projects comply with environmental regulations, climate change priorities and national policies.

A public-private partnership is a long-term contract between a private partner and a public entity for the provision or development of a public service or good, under which the private partner assumes significant risks and management responsibility, and remuneration is linked to performance. Compared to other forms of contracting, the PPP option should be the best option in terms of efficiency, budgetary responsibility, socio-economic, climate and environmental sustainability.

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