Cameroon has seen an average annual growth of 3.6% in its economy over the last decade. It has a relatively high electrification rate of 46% nationally. The government aims to increase this to 75% nationally by 2030, reaching 3GW of overall power capacity by 2020 in the process.
The country has the third largest hydropower potential on the continent, estimated at 20GW, of which 723MW has been developed, accounting for 57% of total installed capacity. Thermal capacity accounts for the rest, including a 216MW gas power plant. The long term Energy Sector Development Plan and the Rural Electrification Master Plan have the goal to electrify 660 localities through grid extension and the development of mini-grids.
Cameroon was one of the first countries in Africa to open its energy sector to private investment. The Electricity Law of 1998 resulted in the entry of AES as a majority shareholder of Sonel, the national utility, in 2001. The company obtained a 20-year transmission and distribution concession and owns most of the existing generation capacity. In 2014 Sonel was acquired by Actis, the British private equity fund, and rebranded as Eneo.
The law of 1998 made possible the involvement of independent power producers. As a result, the Dibamba Power Development Company and the Kribi Power Development Company commissioned an 88MW heavy fuel oil power station and a 216MW gas power station in 2011 and 2013, respectively. Both companies were controlled by AES and acquired in 2014 by Globeleq.
Also under the law, a number of agencies were constituted, including the Rural Electrification Agency (AER), created in 1999; the Electric Sector Regulation Agency (ARSEL), which sets electricity tariffs; and the Electricity Development Corporation (EDC), created in 2006 with the mandate to develop, own and operate hydropower assets.
A new phase of reform in the power sector started in 2011, with the promulgation of a new electricity law which paves the way for unbundling generation, transmission and distribution. The transmission company will remain under government ownership. Power purchase contracts will be signed between generators and distributors. Secondary legislation is being drafted.
The 2011 law also opened the door to independent power generators and distributors in rural areas outside the concession of Eneo, but only one independent power generation and distribution license has been awarded: to GFDEE, a small company running a 0.6MW thermal power plant in Yoyo and serving about 160 customers.
Finally, the 2011 law intends to increase private investment by allowing the development of hydropower projects by auto-producers and creating the obligation for auto-producers to sell, and grid operators to buy, a portion of the electricity produced on a cost-of-service basis as determined by the regulator. Grid operators are obliged to buy excess production from renewable energy installations.
Under tax regulations introduced in 2013, renewable energy projects can qualify for a VAT reduction for five years and various tax rebates for up to 10 years. Solar products are subject to a 10% import tax but no VAT. A law defining incentives for renewable energy generation projects is at the drafting stage. Energy products are subsidized. Subsidies for fossil fuels cover significant portions of the retail cost of gasoline and kerosene. Power tariffs are subsidized through direct budget transfers from the government to the utility.
In the last year JCM Greenquest Solar Corporation announced plans to build a 72MW PV project with the support of the African Development Bank, and Joule Africa signed a memorandum of understanding to develop a 100MW PV project. Various hydro projects are under construction, including the 200MW Memve’ele project funded by the Export-Import Bank of China, and at the development stage, such as EDF’s 400MW Nachtigal project.
Score Summary
Cameroon scored 0.56 in Climatescope 2015, placing it 49th on the list of countries overall, above only the Democratic Republic of the Congo among the African nations. The country’s highest score was on Greenhouse Gas Management Activities Parameter IV.
On Enabling Framework Parameter I, Cameroon slipped one place to rank 47th. While there is no discernible installed clean energy capacity and little in the way of policy support, the country does have energy access policies.
Cameroon was ranked 46th on Clean Energy Investment and Climate Financing Parameter II, unchanged from 2014. Investment in the sector to date has been scarce.
On Low-Carbon Business & Clean Energy Value Chains Parameter III, the country placed 49th due to the low number of value chains and service providers.
On Parameter IV, the country was ranked 37th, reflecting in particular a low failure rate among its small number of carbon offset projects.