São Tomé and Príncipe is set to receive a grant of US $24.5M from the African Development Fund, anchoring a broader US $30M effort to modernise the country’s energy sector and accelerate its transition away from diesel-based power.
The financing will support the Energy Transition, Efficiency, and Expansion Project (ETREEP), a nationwide programme aimed at delivering cleaner, more reliable electricity to over 200,000 people. The initiative aligns with the government’s National Energy Compact, which targets universal electricity access and a 50% renewable energy share by 2030. Implementation is scheduled from May 2026 through November 2031.
Currently, nearly 95% of electricity generation in São Tomé and Príncipe relies on imported fossil fuels, resulting in high tariffs of around US$0.30 per kWh. Frequent outages lasting up to four hours daily continue to disrupt essential services, while system losses exceed 34%, highlighting inefficiencies across the grid.
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ETREEP
ETREEP is structured around three core interventions. It will deploy 1,000 energy-efficient LED streetlights across São Tomé Island to enhance public safety and reduce consumption. On Príncipe Island, a 4 MWp solar photovoltaic plant paired with a 2 MWh battery storage system will be developed, positioning the island to operate entirely on renewable energy. The project will also upgrade low-voltage distribution networks, modernise the national dispatch system, and roll out over 40,000 prepaid meters to improve revenue collection and reduce losses.
Institutional strengthening is another key pillar. Support will be provided to Empresa de Água e Eletricidade and the Ministry of Infrastructure and Natural Resources through technical training, advisory services, and capacity-building programmes to improve operational and regulatory performance. The project is expected to directly benefit 50,000 households and facilitate 2,000 new electricity connections. Billing efficiency is projected to improve significantly, with collection rates rising from 50% to 80%, while non-technical losses are expected to drop to 20%.
Beyond infrastructure, ETREEP incorporates social and economic development objectives. Improved street lighting and cleaner energy access are expected to particularly benefit women, while young people who make up nearly 79% of the population will gain access to training and employment opportunities in the renewable energy sector. Around 200 youth are set to receive technical skills training in solar and electrical systems.
The funding package includes US$19.02 million from the African Development Fund’s ADF-16 allocation and US $5.43M from the Transition Support Facility, with an additional US$5 million expected from co-financiers. The government will also contribute in-kind support. According to Pietro Toigo, the initiative goes beyond infrastructure, signalling confidence in the ability of small island states to build resilient, sustainable energy systems through strong partnerships.
