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Shipping has long been the lifeline linking The Republic of Cape Verde with the outside world, and within their own islands. It is an important
means of achieving sustainable development and regional co-operation, thus economic development, trade and maritime transport are inextricably
This is particularly evident with developing countries because exports are a growing share of gross domestic product (GDP). For example, The
economy is service oriented with commerce, transport, tourism, and public services accounting for about three-fourths of GDP. Although nearly
70% of the population lives in rural areas, the share of food production in GDP is low. About 82% of food must be imported. The fishing
potential, mostly lobster and tuna, is not fully exploited. Cape Verde annually runs a high trade deficit financed by foreign aid and remittances from
its large pool of emigrants; remittances supplement GDP by more than 20%. Despite the lack of resources, sound economic management has
produced steadily improving incomes. Continued economic reforms are aimed at developing the private sector and attracting foreign investment to
diversify the economy.
To participate in and expand trade, efficient maritime transport and port infrastructure are essential. This is particularly important for small island
developing States that are at geographic and economic disadvantage. These handicaps are manifested by high distribution costs, lack of reliable
shipping services, expensive transshipment charges, inadequate port facilities, limited maritime administration and dis-economies of scale when
negotiating freight rates with shipping conferences.
For example, estimates of total freight costs for small island developing States are more than 45.5 per cent higher than for developed market-
economy countries. Provides a comparison for small island developing States with other country groups and indicates the large disparity between
small island developing States. Moreover, most small remote islands incur even higher freight costs as a percentage of import value, ranging from
12 to 18 per cent, which is almost double that of other developing countries as a group.
Strategic Commerce International, LLC, hopes to be involved in helping Cape Verde to improve the maritime sector by focusing on two
broad areas. The first area is policy formulation at an international level to promote equitable participation by Cape Verde in the global shipping
industry. The scope of issues includes international shipping legislation, protection of shippers' interests, merchant fleet development, multi-modal
transport and port development.
The second area is technical cooperation and human resources' development. These are important complements to research and policy analysis
and intergovernmental deliberations. Research provides new insights into methods of tackling development problems.
OVERVIEW OF THE CURRENT SITUATION IN SHIPPING
This section includes an analysis of international trade and the characteristics of the merchant fleet. The maritime transportation issues, however,
are not uniform for all the islands. The group is significantly diverse in geographic location, natural endowments and stages of economic
development. Therefore, the problems of Cape Verde, with its excellent geographic location, are very different from those of many other small
island developing States.
The Merchant Fleet – Open-registry
Open registries are legal mechanisms used to attract merchant tonnage from countries with more stringent safety regulations and higher operating
costs to countries offering more flexibility and lower registration fees. The benefits for the open-registry countries are additional tax revenues and
employment opportunities when ship management companies are established within the country. The main benefits, however, remain with the
nationals of the true owners because the share of tonnage owned by open-registry nationals is minimal.
The age of Cape Verde's eight small ships is the second qualitative factor. All are 15 years old and over. This aging fleet leads to higher operating
costs, as repair and maintenance rapidly increase with age, and schedule delays and unreliability, as well as greater environmental risks, are
associated with obsolete vessels. In brief, Cape Verde's fleet is aging and needs replacement.
Another conclusion from the fleet ownership/vessel type data is the need for Cape Verde to increase their capabilities for serving their own trade.
While this focus provides foreign exchange earnings, employment for seafarers and diversification, it is not fully complementary to the trading
requirements of Cape Verde since most manufactured goods move by container or general cargo ships.
Shipping Industry Changes
Restructuring trends in the international shipping industry are another factor affecting the transportation capabilities of Cape Verde. Over the past
decade, consolidation and cooperation commercial agreements between large container operators have resulted in a concentration of services.
This has created economies of scale and encouraged the expansion of hub and spoke service patterns between major trading areas. For Cape
Verde, however, the impact has been to increase the need for transshipment port services, acquire vessels with container-lifting capabilities, invest
in electronic data interchange (EDI) technology and train management personnel. Moreover, without these infrastructure investments (mainly ships
and port facilities), the ability for Cape Verde to effectively trade and sustain development will be marginal.
To conclude, Cape Verdeans are more than ever dependent on trade and efficient shipping services. These capabilities, however, continue to
deteriorate because of inappropriate and aging ships, ever-increasing and the expansion of island hub ports that will require transshipment services.
Despite the diversity of the islands, there are several recommendations in the maritime sector that may be selectively considered by Cape Verde.
At the National Level
(a) Promote investments in modern ships through fiscal policies that encourage investment. These include, rapid depreciation allowances,
investment credits and reducing personal income taxes for seafarers;
(b) Upgrade maritime safety and environment administration by advanced training through IMO and by sending government officials to specialized
training and academic institutions;
(c) Encourage the development of ship repair facilities through favorable fiscal policies and custom exemption for essential equipment and ship
(d) Provide and upgrade reception facilities for ship waste;
(e) Strengthen or encourage shippers' councils to act as focal points for the protection of shippers' interests;
(f) Support port infrastructure investments through direct loans or by guaranteeing loans from development agencies;
(g) Consider, the need for a licensing scheme and mail subsidies to private ship companies;
(h) Ratify United Nations conventions pertaining to the maritime sector, namely, the Convention on a Code of Conduct for Liner Conferences,
the United Nations Convention on Conditions for Registration of Ships, the United Nations Convention on International Multi-modal Transport of
Goods, the United Nations Convention on the Carriage of Goods by Sea, 1978 (Hamburg Rules) and the International Convention on Maritime
Liens and Mortgages, 1993);
(i) Provide additional management training for private and public sector personnel;
(j) Gradually phase out existing over-age vessels and ban imports of ships exceeding 15 years old that cannot meet minimum IMO safety
(k) Improve managerial skills through a human resources programme or national ports staff;
(l) Actively participate in UNCTAD and IMO meetings pertaining to global shipping policy, port development and maritime safety/pollution;
(m) Upgrade maritime safety and environmental protection procedures:
(i) Consider applying international instruments adopted by the Paris Memorandum of Understanding on Port State Control, including the
International Convention on Load Lines, 1966; the Protocol of 1988 relating to the International Convention on Load Lines, 1966; the
International Convention for the Safety of Life at Sea, 1974; the Protocols of 1978 and 1988 relating to the International Convention for the
Safety of Life at Sea, 1974; the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978
relating thereto; the International Convention on Standards of Training, Certification and Watch-keeping for Seafarers, 1978; the Convention on
the International Regulations for Preventing Collisions at Sea, 1972; and the Convention concerning Minimum Standards in Merchant Ships, 1976
In view of the large investments involved in the development of infrastructures and acquisition of the means of maritime transport, efforts of Cape
Verde at the national and regional levels need to be supplemented by international assistance. The international community is urged to:
(a) Provide assistance to help Cape Verde by investing in port infrastructure, modern ships for intra regional transport, port reception facilities for
ship wastes and the development of managerial and functional skills for maritime transport;
(b) Support regional efforts at improving regional maritime transportation, including maritime safety and marine pollution.
The improvement in maritime capabilities for Cape Verde within the context of sustainable development will require multilateral actions. These
include decisions by government; however, to obtain economic and political leverage, regional and international cooperation is also necessary.
Conversely, without coordination, Cape Verde will continue to be marginalized by larger groups that already dominate economic and maritime
policy in the area.
SCI/CV Maritime Initiative Program
SCI - Marine Initiatives to assist Cape Verde – To Improve Shipping in Cape Verde
In order to improve marine shipping to and around Cape Verde;
1. Building regional maritime capacity: This covers ship management, marine surveys & audits, maritime information systems, maritime law, port &
security, maritime administration, business excellence, port operations and supply chain logistics will no doubt contribute to improved shipping in
Cape Verde. Regional maritime associations: The work being undertaken by the various regional associations including, the Area Countries Ports
Association - reviewing the basis of its fees and charges and the implementation of the business excellence framework will benefit shipping.
2. In-country transport study: Undertaken a number of in-county transport studies that will contribute to improved shipping in among the islands.
3. Commodity mapping & trade study: Explore the commodities used by Cape Verdeans with reference to their country of origin, quantity,
demand, and current route, trade arrangements and trends. By matching those to the major ports in the area and to work out which port(s) would
be best suited to collect or consolidate the incoming and outgoing cargoes or commodities. The closer the market the cheaper the transport cost;
thus benefiting the consumers.
4. Island hub & transshipment ports: Refers to the practice where shipping lines call into one major port within Cape Verde, rather than at several
ports in the same vicinity. It has proven to be an economical and effective means for the transfer of cargo or commodities from its port of origin to
its destination. Cape Verdean Feeder Ships then transship passengers and cargoes from hub ports to neighboring islands.
5. Utilizing Cape Verde resources: Regional focus on utilizing the feeder shipping services to the 10 islands, the utilization of the ship repair
facilities and the increased employment of regional seafarers.
6. Purpose-built ship [donor-funded]: The capability and limitation of island ports should determine the effective size of the ships used.
7. Maximize cargo on shipping: To explore opportunities to maximize cargo loading on sub-island shipping by identifying available products for
regional exports, develop/facilitate and address shortcomings, etc. A full ship load will enable costs to be contained or reduced to the benefit of
8. With the expected expansion: Of tourism within the next decade new models and approaches will have to be implemented.
It must be noted that no system is perfect but innovative approaches and a concerted regional effort can provide a sound and sustainable
framework for developing appropriate shipping services to meet the region’s need.
Handbook of International Trade and Development Statistics, (United Nations publication, Sales No. E/F.95.II.D.15),
Review of Maritime Transport, (United Nations publication, Sales No. E.95.II.D.17), p. 34.
UNCTAD secretariat, based on data from the Statistics Division of the United Nations Secretariat.
Lloyd's Maritime Information Services Ltd, London.
Cape Verde Launches Fast Ferry
Cape Verde Maritime Review - Clk Above
Oceans of Opportunity for Cape Verde
(Africa-The Good News)
New onshore wind farms on four islands in the Cape Verde archipelago will be the first large scale wind project on the continent and the first
renewable energy public private partnership in sub-Saharan Africa.
The European Investment Bank(EIB) and African Development Bank(AfDB) yesterday agreed to provide financing to design, build and operate
onshore wind farms that are expected to be operational by the end of 2011 and provide significant employment.
"Cape Verde is pleased to host the first large scale wind farm project in Africa and the project will help Cape Verde provide 50% of electricity
from renewable sources by 2020," noted Cape Verde Minister of Finance Cristina Duarte.
When completed, the project aims to provide over 28MW of electricity generating capacity and help the island reach an ambitious target of
ensuring that 25% of local power needs are provided by renewable energy by 2012 and 50% by 2020.
The project is being developed by InfraCo in a public-private partnership between the government of Cape Verde and local power utility Electra.
According to Fabio Borba, president of Cabeolica, the company that will build and operate the wind farms, the project propels Cape Verde into
a position of leadership in renewable power generation in Africa where the country's Public Private Partnership structure will be extensively
studied and replicated throughout the region.
The project will introduce modern wind power technology provided by Vestas to enable wind power to be established as the primary alternative
to electricity produced by fuel oil or diesel. Alongside significantly reducing greenhouse gas emissions the programme will increase access to
electricity in Cape Verde, reduce the need to import fuel priced in foreign currency and help establish wind energy as a reliable source of non-
polluting renewable power on the islands.
"Climate change seriously threatens sustainable development and achievement of the Millennium Development Goals (MDGs) in Africa.
However, climate change also provides new incentives and opportunities for Africa to pursue a low carbon intensive development as sustainable
growth requires access to diverse, reliable, affordable clean and renewable energy," said AfDB President Donald Kaberuka.
The EIB will provide €30million and the AfDB €15million for the €65million project. The project follows the European Union 2008 - 2013 Cape
Verde country strategy.
The agreement was signed in Washington D.C. by Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa, Cape
Verde Finance Minister Cristina Duarte and representatives of the African Development Bank.
"This project establishes wind energy as a competitive alternative to traditional diesel generation in Cape Verde. Enabling small island states to
use renewable energy contributed to the global fight against climate change. Close cooperation between the European Investment Bank and
African Development Bank demonstrates the contribution long-term public finance can make to developing renewable energy projects in a
challenging economic climate," said Plutarchos Sakellaris, European Investment Bank Vice President responsible for Africa.
Wind energy was first introduced to Cape Verde in 1994, but until now only provides 2% of power needs in the small island state located 500km
of the West African coast. The project will include comprehensive environmental studies, wind resource assessment and interconnections to the
|SCI - Maritime Feasibility Study
Marine Logistic Services
I Hope We All End Here
MARINE LOGISTICAL SERVICES
Project Backgrounds and Rationale:
The Republic of Cape Verde Islands include Santiago, Sao Vicenteve, Fogo, Sal, Boa Vista, Maio, Sao Nicolau, Santo Antao and Santa Luzia.
These islands possess a diverse coastal and island marine environment. Together with their unique cultural, natural and historic attractions, these
islands offer unique tourism-related and cruise tour experiences as well as investment and real estate opportunity's. The potential of tourism,
cruise tourism and many other opportunity's has yet to be fully developed especially in the context of bringing the benefits too much of the 10
The rationale of the project is to provide service to market development, and a tourism-related infrastructure foundation on which to build an in-
line island marine transportation network by 2014 in order to improve the distribution of the benefits of logistical supply side distribution between
the islands and within them, and to improve the distribution of the benefits of investment and tourism to the disadvantaged sectors of Cape Verde.
The overall objective of this project is to spread the benefits of supply side logistics, investment and tourism more widely between the islands
especially in the areas of commodities distribution to the poorer communities through the development of personal/supply offshore vessels.
Specifically, the project aims to provide a framework to guide marine operators cruise ship investors, vessel operators, tour operators and the
related government agencies in developing the marine transportation network and, cruise ship industry. The project will frame the key markets;
identify the tourism-related infrastructure needed to develop and maintain supply side logistic and cruise products; and prepare feasibility studies
for the provision of specific support infrastructure on the waterway infrastructure.
Project Scope and Description:
The scope of the project includes the following tasks:
To prepare a study of the current and likely future demand and supply of product/commodities distribution and logistics and tourism in the region
giving special attention to;
To assess the market potential of the individual islands in terms of their major attractions, population, future development, and optimal location.
To evaluate investors and operators interest in marine logistics services, cruise ship programs, island tourism and attractions, resort and hotel
operations on the islands and to identify key issues and policies that need to be addressed in order to facilitate the development of Marine
Logistic Services relative to development plans both within the government and the public sectors.
To identify and investigate the feasibility of key cruise ship terminal, navigation and regulatory infrastructure requirements as a basis for developing
an overall marine logistics infrastructure program using public sector loans and private sector financing instruments.
To seek registrations of interest from private sector investors in partnership with the public sector incentives to finance, develop and operate
Marine Logistic Services specific to cruise ship terminal infrastructure, commodity-service distribution and future off shore needs; identify project
proponents through a screening and evaluation process.
SUSTAINABLE DEVELOPMENT ALONG WATERWAY
Tactical Assessment (TA) of the overall pier, docking and terminal infrastructure program and develop and implement monitoring methods to
determine the impact of marine logistics on the distribution of the benefits of commodity/product - tourism between the islands and within them,
the distribution of the benefits of.
The project will involve both a Tactical Assessment (TA) study to establish the demand and supply for Marine Logistic Services in the island
chain as well as identification and managing the implementation of an infrastructure development program that includes an island participation
component. The TA study will identify and evaluate the feasibility of up to nine docks and terminal points, up to 15 smaller key points and related
navigation routs, and lay out a program of island preparation around the docking and terminal points.
The project will also result in the production of investment portfolios designed to attract private sector investors to partner with SCI, public sector
institutions, the planning, financing, development and operation of the Marine Logistic Services infrastructure operations and support facilities. The
project will go on to seek registrations of interest from proponents to invest in the program and to assist in the selection of proponents to
implement the program with co-financing support from bilateral and multi-lateral development partners.
Linking the Islands with Other Project/Initiatives:
The project will further link the islands and through fly/drive components as development progresses. The project will support and help to
complement existing development initiatives and encourage future development opportunities. The project will support existing activities in
various stages of development and construction. In particular, the project would link strongly with the major Flagship Transportation and
Economic Corridor Projects, Overseas Private Investment, International Trade Development and Distribution of Humanitarian Aid.
Expected Outputs and Overall Outcomes:
This project has a number of proposed deliverables or outputs:
- A detailed study of the existing and potential supply/demand amongst the islands.
- A detailed assessment of the maritime infrastructure requirements and identification of a related infrastructure development program
including hard infrastructure and soft elements such as policies and regulations and the preparation of islands to effectively participate in the
development of the program.
Feasibility studies of each infrastructure component as well as environmental impact and economic impact evaluation of the projects and program.
Information memorandum for seeking investors to partner with SCI and the public sector in the planning, financing, development and operation of
Marine Logistic Services and navigation infrastructure and related island preparation programs, and identification of proponents to undertake the
A system for measuring the social and economic impact of implementing Marine Logistic Services affect on other island infrastructure programs
giving special attention National Development Goals and Strategies.
The overall outcome is expected to be the integration of a significant service into the overall National Development Plan offering thus increasing
opportunities and competitiveness; a significant increase in the volume and expenditure markets in Cape Verde and related developments' of
tourism facilities and services, building and inland transportation infrastructure; a more equitable distribution of the benefits of development;
significant increases in livelihood opportunities among the sectors of society resulting in higher levels of poverty reduction; and greater
participation by Cape Verdeans in related entrepreneurship and employment.
Impact on Poverty Alleviation:
Through its targeting of the participation of island communities through micro and small enterprise investment, expansion and job creation,
improved product range and services, better access through infrastructure improvements to key areas, and enhancement of cross sectoral
economic linkages, the project will have a major and direct impact on poverty alleviation.
Impact on the Natural, Cultural and Social Environment, and Mitigation Measures:
No major negative impacts are envisaged on the social and cultural environment. Careful study of the environmental impacts (natural, cultural and
social environment) will need to be made and mitigation strategies identified and implemented in order to monitor and minimize any negative
Participatory Development Issues, if any:
There are likely to be considerable participatory development issues, especially with authorities/Port Development, Operating Agencies, Poverty
Alleviation Agencies-NGO's, Cruise Ship Companies, Overseas Investor, Hotels & Resorts, and related organizations.
Sustainability and Financial Viability of the Projects:
The SCI - Marine Logistics Services infrastructure program should achieve a high level of Sustainability and viability given strong growth in the
development, tourism and cruising market for the islands, supported by proactive marketing of real estate, tourism and cruise ship products.
SUSTAINABLE DEVELOPMENT ALONG WATERWAYS:
Expected Impact on Target Beneficiaries:
Individual Island Communities
Hotels & Resorts
Development Organization (public & private)
Key public sector agencies Port Development and Operating Agencies/ Poverty Alleviation Agencies.
Cruise Ship Owners and Operators.
Local Entrepreneurs and Travel/Tourism Enterprises.
Offshore Oil Industry
Maritime Fright & Container Company's
Private Sector Participation:
The project maximizes private sector benefits and participation through private sector participation in the planning, financing, development and
operation of SCI - Marine Logistics Service infrastructure, and the provision of services to developers, hotels resorts, cruise ship tourists and
operators, local entrepreneurs through micro and small business enterprises.
Proposed Development Partners (Funding Sources):
TA study and governmental preparation support from OPIC and Private Offshore Marine Corporations, Venture Capital; and co-financing
support for infrastructure development from multilateral financial institutions such as Offshore Industry Grants, NGO and bilateral financing
institutions such as MMC. Major Cruise Ship Companies, Hotels & Resorts, Shipping Company's will be sought to provide TA and investment
support on a co-financing basis with the related public sector agencies.
Proposed Implementing Agency:
Oversea Private Investment Corporation
Shell Oil Corporation
Implementation (incl. Preparations) Arrangements:
Trade Winds 2012 – Trade Mission to Cape Verde
Initial Estimated Cost:
2 million dollars (US)
Implementation Schedule (Draft):
No Designation at this Time
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