ENEO’s cashflow problems force energy rationing in the Northern regions again

Business in Cameroon | On September 26, electric utility ENEO resumed with energy rationing in the three northern regions of Cameroon, an official release informs. According to the utility company, the rationings were resumed because of the worsened hydrological drought that substantially reduced production at the Lagdo dam.

The situation got worse because of ENEO’s inability to supply diesel to thermal plants in the three regions. “The cash flow problems facing the electricity sector are the result of unpaid bills accumulated by some large state companies and the non-payment by the government, of the weekly XAF1 billion that usually covers the current expenditures,” ENEO explains.

According to documents seen by Business in Cameroon, as of May 31, 2021, the debt owed by the government to ENEO was XAF163.073 billion. As at the same period, ENEO was still claiming XAF44.524 billion from state companies making it a total of XAF207 billion owed to ENEO by state companies and institutions.

Due to that important debt, the electric utility explains it is currently unable to supply fuel to thermal power plants in the northern regions where the “significant and regular cash flow needs” are constantly growing and logistics is complex.

In late 2020, a correspondence between the Minister of Water and Energy and ENEO estimated the cost required to apply fuel in thermal power plants in the northern regions in 2021 at XAF30 billion, XF18 billion more than initial projections.

Solar plants

With the transfer of 20MW of thermal energy generation capacity from Ahala to Garoua (12MW) and Ngaoundéré (8 MW) in January 2021, the fuel costs needed for the northern region rose by XAF3 billion monthly, authorized sources explain.

To mitigate the energy deficit that is affecting households and businesses in the three northern regions, ENEO plans to inject 30MW of solar energy into the North Interconnected Network (NIN) as of January 2022.

To achieve such ambition, the electric utility hopes it will quickly finalize energy production contracts with Norwegian company Scatec, with the support of the government.

Officially, Scatec will install modular solar power plants leased by the government for four years. The cost of the lease has not been disclosed but it is expected to reduce power outages by 98% in the Northern regions.

Minister of Water and Energy Gaston Eloundou Essomba says the modular power plants will reduce fuel expenditures needed to run thermal power plants in this part of Cameron by XAF5 billion over the first nine months of operations.

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