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Cameroon: EDC obtains water concession for energy generation

Cameroon: EDC obtains water concession for energy generation
  • Comments   -   Tuesday, 08 September 2020 12:19

(Business in Cameroon) - On September 7, 2020, Gaston Eloundou Essomba, Cameroon’s  Minister of Water and Energy (MINEE) signed a water concession agreement with state-owned company Electricity Development Corporation (EDC).

According to the minister, this agreement "grants the concessionaire exclusive rights over the construction and management of water storage facilities and the right to regulate activities related to stored water.

The agreement, therefore, allows EDC to collect water charges from Eneo and future operators in the Sanaga basin as provided for by the law of December 14, 2011. Thanks to revenues thus generated, EDC will be able to repay the debts incurred for the construction of the Lom Pangar dam (6 billion m3) and fulfill its contractual agreements while preserving its financial equilibrium.

It will be responsible for the management of the infrastructures covered by the concession agreement, notably Bamendjin, Mapé, Mbakaou, and Lom Pangar dams since the optimum operation of these infrastructures will increase and optimize the production of the hydroelectric facilities installed downstream of these dams. For the time being, these facilities are the Songloulou and Edéa hydroelectric power stations and soon there will be the Nachtigal hydroelectric plant.

According to a report published in 2019 by the Technical Commission put in place for the Rehabilitation of Public and Para public companies in Cameroon, in June 2018, the state of Cameroon granted an advance in the current account of XAF3.5 billion to balance EDC’s financial situation because water charges were not refunded to the company. Despite this advance, the company’s financial situation has not changed nonetheless. The state is now obliged to pay about XAF5 billion debt (as of December 31, 2018) incurred by EDC from the IDA, the EIB, and the French Development Agency.

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