(Business in Cameroon) - The World Bank office in Cameroon announced on July 14 that the Multilateral Investment Guarantee Agency (MIGA), the institution specialised in insurance services against policy risks and the improvement of credit conditions, decided to lend its support to the investments of the private investment fund Actis LLP in electricity in Cameroon.

Based on a decision taken by the chairman of the board on June 30, 2014, MIGA will grant a guarantee of 180 million USD (around 82 billion FCfa) to Energy Cameroon Coöperatief B.A, an Actis subsidiary, in the framework of his participation in the capital of Société nationale d'électricité (AES Sonel). The eight year insurance covers the risks of restrictions on money transfers, war, civil unrest and breaches of contract.

In the meanwhile, MIGA granted to Globeleq Africa, another subsidiary of Actis, insurance against the risk of breach of contract for a maximum period of 20 years for a total amount of 145.7 million USD (approximately 66 billion FCfa) for its participation in the Kribi gas plant (216 megawatts) and in the Djbamba heavy fuel plant with a 88 megawatt capacity. 

“Our support adds to the assistance that Cameroonian electricity sector has been receiving for a long time from the World Bank and the International Finance Corporation. Actis and Globeleq are providing significant investments in Cameroon and we are happy to contribute to efforts undertaken in the energy sector to ensure the stability, continuity and recovery by reducing their investments’ exposure to risk,” stated Michel Wormser, Vice-President and Managing Director at MIGA.

Actis, who acquired the assets of American company AES in Cameroon in 2013 for a total amount of 202 million USD (approximately 11 billion FCfa) had requested a guarantee from MIGA for a total coverage of 300 million USD for a period of 15 year. MIGA was already supporting Actis through its breach of contract guarantee, granted  to its subsidiary Globeleq on the Umeme project in Uganda.

The guarantee granted by the multinational agency is not the first to a private investment in Cameroon. Loita Capital Partners International Limited, an investment firm based in Mauritius, received in 2007 for a period of five years a guarantee of 1.7 million USD for its investment in National Financial Crédit Bank (NFC Bank), a Cameroonian bank.

In 2012, MIGA also granted a 6.7 million dollar guarantee for a period of 10 years,  to the Swiss company 4G Africa AG for its investment in Telecom SA, a company known by the name Yoomee Cameroon. Lastly, in 1994, the guarantee agency granted a 0.37 million USD guarantee to Société internationale de plantations d'hévéas (SIPH), for its investment in Société des palmeraies de la ferme Suisse, in Cameroon’s Coast region.

Idriss Linge