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Gaz du Cameroun SA terminates gas supply contract with Eneo over CFAF9.3 bln debt and threatens to pursue legal actions

Gaz du Cameroun SA terminates gas supply contract with Eneo over CFAF9.3 bln debt and threatens to pursue legal actions
  • Comments   -   Wednesday, 08 July 2020 11:14

(Business in Cameroon) - In a note published on July 3, Victoria Oil & Gas Plc (VOG), owner of Gaz du Cameroun SA (GDC), announced the termination of its gas supply contract with the electricity company Eneo and threatened to take legal actions.  

Indeed, according to VOG, GDC has been supplying natural gas (30 MW) to Eneo via its Logbaba power plant since 2015. However, at end-June 2020, Eneo still owes GDC $16 million, about CFAF9.30 billion. Despite GDC’s reminders, there have been no noticeable changes. Because of this situation, GDC served a default notice on Eneo following the binding terms signed on June 2, 2020, which included a 30-day repair period.

 "As we have reached the expiry of this remedy period, GDC has no alternative but to terminate the gas supply agreement with immediate effect," VOG informs. "The Company will now vigorously pursue this unpaid debt via the legal channels available to it, including a penalty payment of three months' fees as a result of termination as per the signed term sheet [on June 2, 2020]," the company adds.

The Logbaba power plant was commissioned in April 2015. The supply was interrupted in January 2018 because Eneo, a subsidiary of the UK investment fund Actis, had to face its cash and accounts receivable problems. But it was restored in December 2018 after a deal, which unfortunately just shattered.

Despite solicitations, the electricity concessionaire provided no comments about the news.

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