Making sense of an Experimental Portfolio in Blue Economy in Cabo Verde
Making sense of an Experimental Portfolio in Blue Economy in Cabo Verde
December 15, 2021
How to use the great potential of the blue economy in Cape Verde to promote social-economic development and job creation while supporting ocean health and the enhancement of natural resources?
This was the challenge that the UNDP Cabo Verde Accelerator Lab embraced in 2021, considering the vulnerabilities of the country as SIDS, very much dependent on tourism.
The tourism sector is one of the country’s main source of income and economic growth, accounting directly for approximately 25% of GDP, driving growth in construction, retail, transportation, energy, financial, services, etc. But this dependence on tourism is one major vulnerability of the country. The impacts of the COVID-19 crisis came to prove this one more time, with a record recession of -14% of GDP in 2020, beating worst expectations, when the number of incoming tourists was reduced by 75% compared to 2019, increasing poverty and inequalities.
On the other hand, the country has the great potential in maritime economy, with its vast Exclusive Economic Zone and related resources. The sector is a recognized country priority in order to unlock this potential and promote investments in ports and maritime transports, fisheries, renewable energy, aquatic ecotourism, and other related areas.
But real diversification is still a major challenge! Agriculture is very limited in Cabo Verde. Almost 80% of all food and 85% of domestic cereal demand is imported. Fishery sector also faces many challenges. Altogether the primary sector accounts for only 9% of GDP. Artisanal fishing families are facing increasing challenges to access marine resources for subsistence and income. Aquaculture is limited to a few programs. Poverty rates are higher amongst the country’s rural communities.
The purpose of the intervention was to use non-traditional methods to promote projects and innovation in the blue economy sector, identifying and promoting local solutions aligned with the opportunities and challenges of the sector, involving relevant target-groups and stakeholders to address key issues, and developing innovative partnerships conductive to a creative environment for solutions development.
We wanted to know how sustainable economic activities connected to the ocean could be an alternative source of income for communities, young people, woman and men throughout the country, and help improve resilience and livelihoods. We also wanted to find out if sustainable projects in blue economy could be a good vehicle to investment and access to new sustainable financing instruments.
With this in mind, we’ve constructed a portfolio of initiatives / projects to address the challenge in hand, engaging a range of internal and external stakeholders. A mix of interventions in different points of the ecosystem, combining Digital Platforms with Innovation Challenges and Sustainable Financing instruments, to leverage solutions in blue economy and impact sector progress towards Cabo Verde’s Ambition 2030 and the SDGs.
In 2019, an SDG Roadmap acceleration mission was conducted with Capeverdian national authorities, with support of UNDP and other development agencies, to identify and prioritize SDG accelerators, in alignment with the strategic priorities of PEDS (national strategic plan for sustainable development) and with the principle of “leaving no one behind”. Five (5) accelerators were identified: human capital, potentialize blue economy, affordable renewable energy, digital inclusion and mainstreaming tourism industry in the real economy.\
These accelerators are priority clusters within existing plans to accelerate Cabo Verde’s progress across multiple SDGs. An Integrated National Financing Framework (INFF) to identify alternative and innovative modalities of financing for development was also targeted to “help develop a better understanding of the national financial landscape and coordinate efforts to mobilize and align a wide range of financing sources — public and private, domestic and international, to meet the country’s sustainable development priorities”.
In the other hand, within the scope the RFF (Rapid Response Facility) of the UNDP COVID-19 offer 2.0, an initiative named “incentive-based innovation to promote social cohesion in vulnerable communities” was being promoted by Cabo Verde Joint Office (JO) - UNDP, UNICEF and UNFPA - building on existing SDG local platforms established at the municipal level to “leverage local institutions and expand economic opportunities”. The idea was to promote small-scale projects at municipalities level, led by young people and woman in the following sectors: green economy, blue economy, health and social care services and digital solutions.
At this point, the Accelerator Lab Cabo Verde had just concluded the first edition of Reinventa Turismo challenge, in partnership with Cabo Verde Digital, and developed the Business Platform NEGOCIA in partnership with private sector associations (young entrepreneurs, woman entrepreneurs and Chambers of Commerce of Cabo Verde), a digital network where companies and entrepreneurs can connect, share ideas, find relevant services, business opportunities and also capacity building and entrepreneurship.
Within the scope of the INFF process promoted by the government of Cabo Verde with the support of the Strategy and Policy Unit (SPU) of JO, and after a Development Finance Assessment (DFA), two flagship projects were designed: the LAVANTA Fund, a revolving fund of US$300,000 to promote institutional change for private entrepreneurship and bottom-up innovation (partnership with PROEMPRESA, the national SMEs promotion agency) and Blu-X, in partnership with the Cape Verde Stock Exchange (BVC) to promote sustainable finance and impact investing.
All these initiatives set the stage for the experimental blue economy portfolio. The Accelerator Lab has developed relevant experience in conducting innovation challenges and a strong partnership with private sector associations, and the opportunity to work with other internal JO portfolios to leverage this experience and support the above mentioned initiatives represented an excellent opportunity to impact the system in several points and accelerate processes with the following interconnected projects.
- NEGOCIA Business Platform upgrade
- Fundo LAVANTA Call for Projects
- ReInventa Blue Economy
- Blu-X financial platform
NEGOCIA Business Platform Upgrade
The first line of the intervention was to adapt the Business Platform NEGOCIA to launch and manage Innovation Challenges, and promote a matchmaking between entrepreneurs / Innovators and investors / the financing ecosystem to leverage opportunities for entrepreneurship and project development.
A new module to manage Innovation Challenges and an APP to access NEGOCIA via mobile devices were developed with the purpose of supporting the launching of the Fundo LAVANTA call for projects and following similar initiatives. This functionality provides the digital infrastructure to set an innovation challenge and manage the relationship with the applicants. It includes a landing page to display relevant information about the initiative, supporting texts, images and video contents, an application form builder, a countdown and dynamic sections with contents that can be activated as needed, along with the process. All this available online.
NEGOCIA platform was launch in August 2021, together with Fundo LAVANTA, and counts now with more than 1.000 registered users.
Fundo LAVANTA Call for Projects
The second line of intervention was to support SPU and Decentralization Project launch the LAVANTA fund. The role was to support the launching of the Call for Projects phase of LAVANTA fund and connect this initiative to NEGOCIA platform, using this platform to leverage the participation of the private sector led by young people and woman.
The result was the development of the Fundo LAVANTA landing page within NEGOCIA platform to manage the Call for Projects launched at national level. All relevant information and audiovisual material was developed to inform participants about the initiative, including fund description, thematic areas, eligibility, rules of engagement, application form, instructions to complete application, FAQs, documentation and contacts.
The Call for Projects was open from 23rd August to 13th September. Over 300 applications were received, from all islands of Cabo Verde in five categories: green (33%) , blue (31%), digital (15%), social and health (10%) and others with inclusive growth and job-creation potential (10%). Of these, nearly 54% were individual entrepreneurs who have not yet established a company and 54% of the applicants were women, as described in more detail in the article “Cabo Verde’s INFF boosts digital marketplace to connect local entrepreneurship with SDG investment”.
ReInventa Blue Economy
The third project in the portfolio is ReInventa Blue Economy. The initiative has the general purpose of stimulating the adoption of digital tools and promote technology-based solutions in key areas of Blue Economy, such as fisheries and aquaculture, renewable energies, aquatic ecotourism, maritime transport and safety, environment and waste management, climate change and scientific research, in order to promote socio-economic development and job creation in communities most directly linked to the sector, while promoting ocean´s health and the sustainable use of marine and coastal resources.
ReInventa program is a partnership between Cabo Verde Digital and Accelerator Lab. During this period, partnerships were forged with the Ministry of Maritime Economy and other national and international partners, with the purpose of promoting the development of digital solutions to help sector relaunch in the post pandemic crisis. The initiative takes the form of an open innovation contest, targeting the national innovation and entrepreneurship ecosystems.
The fourth line of intervention is the collaboration with the project Blu-X. The collaboration with this initiative can be a good synergy between the Accelerator Lab, SPU and INFF to better impact the Blue Economy challenge. Blu-X aims to become a regional platform for listing sustainable and inclusive finance instruments oriented towards the blue economy. The project has several modules, from capacity building to promoting sustainable financing instruments to be traded in a digital platform and includes national and international partners such as Cabo Verde Stock Exchange (BVC), Ministry of Finance, Luxembourg Green Exchange (LGX), LGX Academy, among others.
The Accelerator Lab is collaborating in the development of the digital platform and in building a pipeline of investment projects in Blue Economy to test the taxonomy / labeling criteria of “Blue Projects” though synergies with Lab’s initiatives NEGOCIA platform and ReInventa program.
Perspectives for 2022
This interaction between NEGOCIA and LAVANTA is expected to continue in 2022. The natural next step is to integrate and promote successful projects from LAVANTA fund in NEGOCIA platform, with the purpose of strengthening this platform as a public-private dialogue tool that promotes connections between entrepreneurs and business with investors and innovative financial instruments to accelerate development opportunities in targeted sectors.
LAVANTA is a revolving fund, and the success of this first round of projects can trigger new sources of funds into the mechanism and the need to procure new projects into the initiative. A second call for projects in NEGOCIA platform is foreseeable, but a connection between LAVANTA and ReInventa Blue Economy is very promising. ReInventa will be targeting innovative and technology-based solutions in blue economy with a wide range of partners in the sector, and can serve as a pipeline of “Blue Projects” into LAVANTA fund mechanism. ReInventa can also serve as a link with the project Blu-x, testing the sustainable financing taxonomy in its mapping the gaps phase.
The JO in Cabo Verde is currently working other projects and initiatives in the Blue Economy spectrum, namely in the environment sector. A sensemaking exercise with all internal stakeholders around the topic of Blue Economy could bring to the table more initiatives, resources and capabilities to help escalate effects with an even more integrated approach and innovation tools included in the UNDP Portfolio Sensemaking and Accelerating Protocol.
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