Cameroon is actively working to ensure the financial continuity of the Nachtigal hydroelectric project. The Ministry of Finance and its financial partners are accelerating discussions to raise FCFA 56 billion, intended to replenish a €86 million stand-by letter of credit (SBLC). SCB Cameroon and Financia Capital are the arrangers of this operation.
Technical discussions are being finalized, following the approval in principle from the Minister of Finance. A source close to the matter indicates that the legal phase is underway, with the finalization of the operation's coverage documents.
The operation could take the form of a syndicated arrangement, involving several financial institutions, given its scale. Attijariwafa Bank, SCB's parent company, could also be involved. The financial structure has not yet been finalized.
The main objective is to replenish the guarantee mechanism before April to avoid the activation of the counter-guarantee granted by the World Bank to Société Générale Paris. This scenario would lead to the suspension of World Bank funding to Cameroon.
The SBLC, with an initial amount of FCFA 56 billion, was put in place to cover the State's payment obligations, particularly in the event of default by Éneo, the purchaser of electricity produced by Nachtigal Hydro Power Company (NHPC). Éneo's payment defaults have led to the guarantee being activated to the tune of FCFA 55 billion, almost exhausting the envelope.
The State's payment arrears to NHPC exceed FCFA 70 billion. In parallel, the Ministry of Finance is negotiating with local banks to set up a FCFA 100 billion financial guarantee mechanism in the form of a revolving fund.
Cameroon's ability to replenish this safety net conditions the financial continuity of the Nachtigal project and its credibility with international donors. The market will monitor the securing of the operation in time to avoid the activation of the international counter-guarantee.
The Nachtigal hydroelectric dam, commissioned in March 2025, has a capacity of 420 MW and covers approximately 30% of Cameroon's energy needs.
