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Cameroon

Governmental Framework

Government Institutions

Ministry of Economy, Planning and Regional Development (Ministère de l’Economie, de la Planification et de l’Aménagement du Territoire, MINEPAT)

MINEPAT promotes Cameroon’s economic and social development objectives by following the long-term development plan, Vision 2035. In line with this plan, the ministry recognises the need for significant investments in the energy sector to develop renewable energy potential and achieve universal access to energy.

http://minepat.gov.cm

Ministry of Water Resources and Energy of Cameroon (Ministère de l’Eau et de l’Energie, MINEE)

MINEE is in charge of the governmental actions in the energy sector:

  1. Planning and defining national energy policy and strategies;
  2. Supervising energy sector activities, incl. long-term investment plans for IPPs and transmission lines, and
  3. Granting the necessary authorizations, licenses and concessions to operate in the power sector.

www.minee.cm

ENEO Cameroon S.A.

ENEO Cameroun S.A. is the historical electricity operator (formerly known as AES SONEL) and was granted a monopoly over transmission and distribution throughout Cameroon. It is a semi-public company with British private equity firm Actis acquiring a majority stake of 56% in 2014 with the remaining 44% held by the Cameroonian State. ENEO has an installed generation capacity of 968 MW with a capacity limit set at 1000 MW, consisting of 39 generation power plants, including 13 grid power plants and 26 remote thermal power plants with 74 % of the electricity generated sourced from hydro power.. At present, ENEO reports employing ~3,700 permanent staff and supplies more than 950 000 customers of whom approximately 45% live in the cities of Douala and Yaoundé.

http://www.eneocameroon.cm

Electricity Development Corporation (EDC)

EDC is a state company managing the public assets in the electricity sector, including the construction and operation of all hydroelectric projects in the country. EDC’s role is to study, prepare and execute any infrastructure projects in the electricity sector on behalf of the State, as well as to promote public and private investments in the sector. EDC currently oversees the ongoing development of Lom Pangar dam on the Sanaga River.

http://edc-cameroon.org/

National Electricity Transmission Company (Société Nationale de Transport de l’Électricité, SONATREL)

SONATREL was established in October 2015 as a state-owned administrator and operator of Cameroon’s transmission network. Once the transfer of all transmission assets (currently owned by ENEO Cameroun S.A.) is completed, SONATREL will manage, develop and maintain the national transmission grid, including its interconnections with neighbouring countries. SONATREL will also be responsible for securing all necessary investments. The World Bank plans to support SONATREL in strengthening the national transmission grid by the Electricity Transmission and Reform Project at the estimated costs of USD 325 million (to be approved in December 2016 ).

The Electric Sector Regulation Agency (L’Agence de Régulation du Secteur de l’Électricité, ARSEL)

ARSEL, responsible for regulating the electricity sector, setting the electricity rates in line with consumers’ rights and determining electrical standards, acts as Cameroon’s impartial regulator. It reviews and approves the annual tariff to be paid to the power utility by consumers and promotes fair competition by analysing new investments in the sector and studying applications for concessions, licenses and authorizations before they are granted by MINEE (which has authority over ARSEL). ARSEL can also pronounce penalties for the power producers.

http://www.arsel-cm.org

Rural Electrification Agency (Agence d’Electrification Rurale, AER)

AER, a legal public entity with financial autonomy, is focused on promoting and implementing rural electrification in Cameroon and manages the Rural Energy Fund. AER provides technical expertise and financial assistance to develop infrastructure for provision of energy services to the population of rural areas (incl. surveys, studies and projects preparations). AER is also responsible for managing the tenders for studies, development of rural electrification projects. It has just announced the second development phase, which is expected to deliver electricity supply to around 100 locations.

Independent Power Producers (IPPs), Private Distribution Companies

KPDC, DPDC, NHPC, Gaz du Cameroun, small IPPs

Since the adoption of the 2011 Electricity Law, small-scale (<1 MW) independent power generators and distributors (IPPs) in rural areas, outside the concession of ENEO Cameroun S.A., are allowed to generate energy supply. So far, only one independent power generation and distribution license was awarded to GFDEE to operate a 0.6 MW thermal power plant in Yoyo, serving about 160 customers. In 2015, a Memorandum of Understanding was signed with the JCM Greenquest Solar Corporation for developing the first IPP renewable project (72 MW solar plant).

In 2009, the government awarded Dibamba Power Development Company (DPDC) and Kribi Power Development Company (KPDC) a 20-year concession rights to build and operate the respective power plants (Dibamba, Kribi) and associated transmission lines. DPDC and KPDC operate under the consortium formed by British CDC Group and Norfund.

In July 2016, the Government of Cameroon has signed a shareholders’ agreement with the International Finance Corporation (IFC) and Électricité de France (EDF) to create the Nachtigal Hydro Power Company (NHPC) that will develop the 420 MW Nachtigal hydropower plant.

Strategies, Policies, Acts, and Regulations Governing Renewable Energy

Cameroon Vision 2035

Vision 2035 is Cameroon’s strategic programme that holds enhanced energy infrastructure as a key component to its success with specific efforts outlined for the sector including:

  • Increasing electricity production by developing country’s hydro-electric and gas potential;
  • Intensifying the exploration of oil resources;
  • Deploying alternative energy resources, and
  • Extending and modernizing transmission and distribution facilities and networks.

Nationally Determined Contribution (NDC)

In its first Nationally Determined Contribution (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC), the government outlined the key message of achieving 25% renewable energy share in country’s electricity mix by 2035.

Electricity Sector Development Plan up to 2030 (Le Plan de Développement du Secteur de l’ Electricité – PDSE)

The government, with the World Bank’s consensus and consultants’ recommendations (namely Électricité de France), has prepared a long-term power policy: PDSE. The PDSE envisages developing a number of hydropower stations as well as gas- and oil-fuelled power stations to ensure consistency in the development of electricity supply and demand by 2030. PDSE aims to achieve 75% electrification rate by 2030 through the expansion on transmission and distribution network as well as through parallel Rural Electrification Master Plan (Plan Directeur d’Électrification rurale – PDER).

Rural Electrification Master Plan (Plan Directeur d’Électrification rurale -PDER)

PDER outlines four programmes to provide energy access to electricity in rural areas until 2035. It targets electrification in 660 localities through various approaches:

  • The extension of interconnected grids;
  • The rehabilitation and construction of isolated diesel and mini-hydro plants;
  • Installing solar energy-based electrification technologies as well as the development of a regional grid to interconnect the standalone grids, and
  • Foster the integration of the national grid with the neighboring countries.

Electricity Law (1998), Electricity Decree (2000)

The Electricity Law (1998) and Electricity Decree (2000) ensured liberalization and privatization of the state-owned vertically integrated power utility (SONEL) and opened Cameroon’s energy sector to private investors. The 1998 Law established the electricity sector regulator (ARSEL) as well as the rural electrification agency (AER) for the promotion and use of the primary sources of energy, in particular renewable sources.

The Law governing the Electricity sector n°2011/022 (2011)

The 2011 Electricity Law created a special regime aimed at developing renewable energy, including solar, wind and hydroelectric energy and biomass below 5 MW. Under the 2011 Electricity Law, IPPs are granted guaranteed access to the transmission and distribution network and grid operators are obliged to buy excess supply from renewable energy installations if they are part of rural electrification. The law permits a simple authorization from ARSEL (instead of the full tender process), and IPPs are allowed to set up a rural distribution network up to a maximum capacity of 1 MW. This law specifically outlines the legal and institutional supervision for renewable energy and energy efficiency promotion, by creating the Department of Renewable energy (within MINEE) and providing incentives for renewable energy power producers.

Investment Considerations

Laws and Regulations Governing Foreign Direct Investment

The Cameroon Investment Promotion Agency (CIPA) is a State-owned institution in charge of the promotion of private investments. CIPA’s mission is to contribute to the development and implementation of government policy in the field of investments promotion in Cameroon.

Foreign direct investment is governed by an investment charter instituted by the Investment Code (Law No. 2002/004 of April 19, 2002) and subsequent texts (for example Law N° 2013/004 du 18 April 2013), which outlines incentives to private investment in Cameroon.

Renewable Energy Investment Incentives

There are nascent initiatives in Cameroon that are being put in place in order to promote renewable energy investments that include but are not limited to:

VAT reduction

Renewable energy projects can qualify for a VAT reduction for 5 years and various tax rebates for up to 10 years and reduced taxes and customs duties for renewable energy equipment are considered on a case-by-case basis. Solar products are subject to a 10% import tax but no VAT. A law defining incentives for renewable energy generation projects is at the drafting stage.

AfDB SEFA

The African Development Bank is active in supporting renewable energy developments in the country, a prime example being the support offered to JCM Greenquest Solar Corporation for the development of a 72 MW Solar Photovoltaic (PV) power plant as the first renewable energy Independent Power Producer (IPP) in Cameroon. These funds have been channeled through the Sustainable Energy Fund for Africa (SEFA) approved at the end of 2014 comprising of a USD 777,000 preparation grant covering environmental and social impact assessments and cost relating to the technical, legal and financial advisory services.

Rural Energy Fund

The Rural Electrification Agency (Agence d’Electrification Rurale, AER), a legal public entity with financial autonomy, is focused on promoting and implementing rural electrification in Cameroon and manages the Rural Energy Fund.

Key figures

Available statistics:
Capital
Yaounde
Official languages
French, English
Population (2016 est.)24.36m
24.36m
Population growth (2016 est.), %
2.58
Median age (2016 est.), years
18.5
Urbanization rate (2010 - 2015), % p.a.
3.6
Urban population (2015), % of total
54.4
Rural population (2015), % of total
46
Population density (2015), per km2
49
HDI (2014)
153 of 188
National Currency
Central African CFA Franc (XAF)
Exchange rate (March 2017), USD
1 USD = 618.101 XAF
GDP (2015), USD million current
28,416
GDP growth (2015), %
5.8
GDP annual growth rate forecast (2020), %
5.5
GNI per capita (2015), PPP current int’l USD
3,070
Inflation (2016), %
0.55
Inflation Rate Forecast (2020), %
1.2
Foreign Direct Investment, net inflows (2015), BOP current USD millions
620
Net official development assistance (2014), current USD millions
852
Budget deficit (2016), % of GDP
5.6
Ease of Doing Business (2017), rank of 190
166
TI Corruption Index (2016), rank of 176
145
Installed Generation Capacity (2014), MW
2327.45
Installed Fossil Fuel Capacity (2014), % of total installed capacity
40%
Hydro Capacity (2014), % of total installed capacity
60%
Other RE Capacity (2014), % of total installed capacity
<1
Renewable electricity output as % of total electricity output excl. hydro (2014)
1
Avg. distribution and transmission losses as % of output (2013)
10
Net electricity imports (2013, est.), %
0
Electrification rate, total (2014) %
62
Electrification rate, urban (2014) %
96
Electrification rate, rural (2014) %
23
Peak demand (2015, est), MW
1,000
Per capita electricity consumption (2015), kWh
317
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