The Government of Cameroon regains control of ENEO
The Government of Cameroon has regained effective control of Eneo, the country’s national utility and electricity distributor, following the signing of an agreement to buy back the stake held by the British private equity fund Actis.
The agreement was signed on Wednesday, November 19, 2025, concluding a negotiation process that lasted more than two years. On Cameroon’s side, the transaction was signed at the Ministry of Finance in the presence of Finance Minister Louis Paul Motaze and the Minister of Water Resources and Energy, Gaston Eloundou Essomba.
The state will now hold 95 percent of the company, with the remaining 5 percent set aside for employees.
This move has been hailed as an act of energy sovereignty. Minister Essomba stated that this signing marks the “effective resumption of control of ENEO by the State of Cameroon” and is an “essential prerequisite” for launching the necessary reforms to stabilize the electricity system under its Mission 300 Compact. By placing Eneo back under state control, authorities anticipate paving the way for profound modernization, securing necessary investments, and leading to a sustainable improvement in the quality of service in accordance with the first commitment of Pillar 5 of the national energy Compact.
ENEO’s Severe Financial Strain
The government’s takeover comes as the electricity sector faces severe financial pressure. The financial imbalance, which Minister Essomba described as “profound,” is the root cause of operational difficulties and delayed payments to independent producers such as Nachtigal, Kribi, and Memve’ele. The company is weighed down by significant debt:
- Total Debt: Eneo’s total debt reached 800 billion CFA francs (about $1.3 billion) at the end of 2024, according to the Ministry of Water and Energy’s Compact Energy Pays report.
- Debt History: Two years earlier, in 2022, Eneo’s debt already stood at about 700 billion CFA francs.
- Debt Breakdown: This total includes roughly 500 billion CFA francs owed to suppliers.
- Unpaid Bills: Eneo also faces approximately 80 billion CFA francs in unpaid bills.
- Public Creditors: Nearly half of the 2022 debt was owed to public entities, including Sonatrel, EDC, Sonara, SNH-Tradex, and Arsel. The problem of unpaid public entity bills constitutes a lack of earnings for Eneo.
The government’s subsequent recovery plan includes refinancing ENEO’s CFA800 billion debt and aims to restore the sector’s financial balance by 2028. Authorities also intend to combat fraud, which accounts for nearly 15% of network losses. The monetary value of these fraud losses is estimated by sources as either CFA60 billion per month or 60 billion FCFA per year.
Is this the Silent End of Independent Power Projects and private owned Mini grids?
The state’s acquisition of a 95 percent stake in Eneo, despite being hailed as an act of “energy sovereignty”, presents a substantial challenge to independent power producers (IPPs) and developers of new power projects. As noted, Eneo’s crippling total debt, which reached CFA800 billion (about $1.3 billion) at the end of 2024, severely undermines its credibility as an off-taker for new power projects. For new IPPs, financing is contingent on a credible off-take agreement; hence, contracting with a highly indebted, state-controlled utility where payments have historically been delayed will likely stall investment and development.
While the government has prioritized refinancing this CFA800 billion debt and improving cash flow to “stabilize payments”, the success depends on achieving greater financial discipline, especially regarding unpaid bills from public entities, a known source of Eneo’s lack of earnings. Notwithstanding, skepticism remains. If not properly managed, the takeover may lead to the end of IPPs and mini-grid project for the following reasons.
- There now seems to be an inherent conflict of interest and institutional centralization. With the government becoming the majority owner of Eneo (the national distributor), the state effectively consolidates its roles across the entire electricity value chain, jeopardizing regulatory neutrality. The state is now the principal owner-operator (through Eneo), Transmission Operator (SONATREL), the ultimate policy maker through ARSEL (the sector regulator), ARE (The Rural Electrification Agency) and entities managing generation assets (like EDC) are also public entities that operate under state control. This centralization of power risks creating a situation of regulatory capture, making it difficult for subordinate authorities, such as the licensing bodies (including the Rural Electrification agency, as noted in your context), to grant licenses or approve new projects without prioritizing the financial stability and operational interests of the newly state-controlled Eneo. This potential complacency in governance could undermine fair competition and the necessary sector reforms. Furthermore, the State is already noted for controlling policy, such as previously maintaining artificially low tariffs, which may continue to supersede market realities.
- The replacement of private commercial risk (ENEO under ACTIS leadership) with sovereign risk (ENEO under the governments leadership) may not fully alleviate the payment concerns for future IPPs seeking long-term, reliable revenue streams.
- Eneo’s severe financial imbalance and massive liability undermines the company’s credibility as a reliable off-taker, a crucial factor in securing project finance for new IPPs. Without a bankable off-take agreement, investors are unlikely to commit capital, especially when payment defaults have become systemic. While this has been the case for a while, the fact that the institution is now fully controlled by the country increases the risk profile in the light of several investors.
Conclusion
Cameroon’s experience with state-managed enterprises adds another layer of skepticism. Historically, public control in sectors such as water and transport has yielded mixed results, often leading to inefficiencies and renewed fiscal pressure. Replacing private commercial risk with sovereign risk may offer political reassurance, but it does little to mitigate investors’ fears about delayed or partial payments over long-term contracts. Ultimately, the state’s return to dominant ownership could stifle competition, dampen innovation, and slow private-led electrification. Unless strong governance and transparent regulatory oversight accompany this shift, the government’s quest for “energy sovereignty” might inadvertently signal the silent end of independent power development in Cameroon.
