Cameroon’s decision to take back control of its main electricity utility has sharpened questions over how the state will rescue a sector facing mounting financial strain, grid bottlenecks and rising risks to economic growth.
On November 19, 2025, the government completed what it described as the renationalisation of ENEO, agreeing to buy the 51 percent stake previously held by British investment fund Actis. The deal leaves the state with about 95 percent ownership of ENEO, the backbone of Cameroon’s power system.
ENEO holds a monopoly over electricity distribution and operates generation assets spanning 44 power plants, drawing on hydropower, thermal generation and solar energy. But the takeover comes at a moment of deep stress for the sector, shifting the debate from ideology to execution: can the state stabilise an industry central to living standards and economic development?
Through ENEO and other public entities, the government now effectively controls almost the entire electricity value chain generation and distribution (ENEO), transmission (SONATREL), regulation (ARSEL), water resource management (EDC) and rural electrification (AER). Analysts warn that this vertical integration risks compounding long-standing governance and efficiency problems common to state-owned enterprises, rather than fixing them.
The most pressing challenge is financial. While the state is spending about CFA78 billion (US$130 million) to acquire Actis’s shares, it is also inheriting ENEO’s heavy debt load, estimated at around CFA800 billion (US$1.3 billion) at the end of 2024. The liabilities are owed to suppliers, independent power producers and banks.
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Operating figures highlight the imbalance. According to the energy ministry, ENEO earns around CFA30 billion (US$50 million) in monthly revenues but faces financial commitments close to CFA50 billion (US$83 million). A key reason is electricity tariffs frozen by regulator ARSEL since 2012, forcing the utility to sell power below cost.
In principle, the state compensates ENEO for the shortfall. For 2025 alone, the required subsidy is estimated at between CFA70 billion and CFA100 billion. But persistent arrears have weakened confidence among investors and lenders, particularly around the Nachtigal hydropower project.
Nachtigal, commissioned in March 2025, added 420 megawatts to installed capacity a roughly 30 percent increase and was expected to end load shedding. Instead, its impact has been blunted by chronic underinvestment in transmission. The grid, run by SONATREL, cannot absorb all the electricity produced, turning transmission into a critical bottleneck.
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The project’s power purchase agreement has added to the strain. Nachtigal is paid through a “capacity payment” mechanism, meaning the plant must be paid for its full available capacity even when only part of the output can be dispatched. By November 2025, more than €85 million had already been drawn from a World Bank-backed letter of credit supporting the project, raising concerns over sustainability.
Business leaders say unreliable power remains a major drag on the economy. According to the employers’ association GECAM, more than 80 percent of executives cite electricity shortages and disruptions as the main weakness of Cameroon’s business environment.
The stakes extend beyond Nachtigal. Any default could spill over to future projects, notably the planned 500-megawatt Kikot hydropower dam, which is structured along similar lines and backed by many of the same international partners, including the World Bank and African Development Bank.
A loss of confidence could also derail Cameroon’s broader energy ambitions. Under its National Energy Compact, the country aims to expand electricity access to around eight million people by 2030 and mobilise US$12.5 billion in financing, much of it from the private sector.
Meanwhile, the role of thermal power plants remains unresolved. In Cameroon, thermal generation costs about three times more than hydropower, yet large gas- and fuel-oil-fired plants were designed for baseload use. Their owner, Britain’s Globeleq, is owed more than CFA137 billion by ENEO and the state.
With public finances under pressure and the state once again at the centre of the system, analysts warn the margin for error has narrowed sharply. Without deep reform, Cameroon’s electricity sector risks tipping into crisis with consequences for the wider economy far beyond the power grid.
