Cameroon is actively working to secure financing for the Nachtigal Hydropower Project. The Ministry of Finance, in collaboration with its financial partners, is working on a "coordinated financing operation" to replenish a standby letter of credit (SBLC) of over 86 million euros, or approximately FCFA 56 billion, held by SCB Cameroon. Financia Capital is expected to act as arranger in this operation.
Technical discussions are ongoing and are expected to be completed soon, with the Minister of Finance having already given his approval in principle for this fundraising. A source close to the matter indicates that the operation's coverage documents are being finalized, particularly in legal terms.
The planned operation would not rely on a single lender. Given the scale of the sums involved, a syndicated arrangement involving several financial institutions would be preferred. SCB's parent company, Attijariwafa Bank, could also be involved in the operation. The precise financial structure has yet to be defined and validated by all stakeholders.
The main objective of this approach is to avoid triggering the counter-guarantee granted by the World Bank to Société Générale Paris, which would be triggered if the Cameroonian State were unable to honor its commitments. Such a scenario is feared by both Yaoundé and the World Bank, as it could lead to the suspension of certain World Bank funding to Cameroon, with potentially significant repercussions.
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 the Nachtigal dam. However, successive payment defaults by Éneo have led NHPC to activate this guarantee to the tune of FCFA 55 billion, thus exhausting almost all of the envelope.
This initiative follows discussions held in Paris on January 27, 2026, between the project's shareholders and funders, which resulted in a commitment to replenish the letter of credit domiciled with Société Générale in Paris. These negotiations come at a time when the State's payment arrears to NHPC now exceed FCFA 70 billion. At the same time, 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.
Beyond the technical and financial aspects, this refinancing effort is crucial for Cameroon's credibility with its international partners. The country's ability to secure this financing in time conditions the financial viability of the Nachtigal project and the quality of its relations with its funders. The speed with which this operation is completed will be decisive for the financial soundness of the project.
