The government of Cameroon has bought back its electricity company, which was privatized in 2001. The move has been widely welcomed, considering the challenges many have encountered since it was owned by AES Sonel and later Eneo.
But behind the euphoria of the government’s acquisition lies a significant question: how will the company be managed?
Most public parastatals in Cameroon have faced managerial issues, ranging from misappropriation and embezzlement to corruption and tribalism.
Furthermore, the takeover comes at a time when the government is grappling with its own problems, from disputed elections to other economic setbacks.
However, Minister Gaston Eloundou Essomba applauded the regained control as “a major decision to restore order in the electricity sector and launch an in-depth restructuring.”
He also stated that this is an essential step to initiate the emergency reforms necessary for the stabilization of the electricity sector. To him, the core problem is the financial imbalance that has weakened the sector.
Government Plan
According to the minister, the government’s emergency plan to sustainably redress the sector remains a priority. This plan involves refinancing Eneo’s debt to improve cash flow and stabilize payments; ensuring everyone pays their bills, including public entities; and expanding the industrial customer base with the second energy corridor to Douala.
He also highlighted the fight against fraud, which he said remains a priority, as fraud represents nearly 15% of the system, or 60 billion FCFA per year.
“The government commits to the generalization of meters, the standardization of connections, [and] reinforced controls,” he said. “The takeover of Eneo is an act of energy sovereignty. It paves the way for deep modernization, securing investments and sustainably improving the quality of public electricity service.”
How the Takeover Unfolded
The state resumed control following an agreement reached with the British investment company, Actis, on Wednesday, November 19.
Under the terms of the deal, the Cameroonian government acquired Actis’s stakes in the company for 78 billion FCFA. Cameroon now holds a 95 percent stake in Eneo, making it the majority shareholder.
As the new majority owner, the government is expected to appoint a director and board members. Eneo, formerly known as Energy of Cameroon, is also likely to be rebranded.
This past January, the World Bank reported that over 75 percent of Cameroonians still lack access to electricity, despite living near the grid.
Over the last decade, the government has invested in infrastructure, building hydroelectric power dams and replacing wooden high-tension poles with concrete ones. However, persistent challenges such as failed transformers and fallen poles continue to leave many areas without power.
In Buea, for example, neighborhoods including Sandpit, Bunduma, Muea, and Malingo have been without electricity for extended periods.
As the Cameroonian government takes full control, many citizens hope it will accelerate the resolution of the issues plaguing the energy sector.