Home West Africa Nachtigal Hydro Plant Hits Full Capacity: A Victory Shadowed by Financial Woes

West Africa

Nachtigal Hydro Plant Hits Full Capacity: A Victory Shadowed by Financial Woes

March 23, 2025

(3 Minutes Read)

The Nachtigal Hydro Power Company (NHPC) has successfully integrated the entire 420 MW capacity of the Nachtigal Dam into Cameroon’s national grid. Following a seamless connection on February 27, 2025, and weeks of thorough testing, the final unit of the hydroelectric facility officially commenced operations.

This achievement marks a significant milestone for the project, with the plant now functioning at full capacity and poised to make a substantial contribution to the nation’s energy supply. NHPC announced that the completion of this seventh and final unit marks the end of the construction phase and the start of the plant’s 35-year operational period. This is a pivotal moment, as under the agreements between the government and NHPC, the company is now entitled to a monthly payment of CFA 10 billion for its energy capacity, regardless of actual usage.

However, the financial landscape of Cameroon’s power sector complicates matters. Eneo, the state-owned electricity distributor, has faced liquidity challenges for years. Controlled by the British investment fund Actis, Eneo claims the government owes it over CFA 100 billion in unpaid bills. Despite this, Eneo is struggling to fulfill its financial commitments to its suppliers, including NHPC, which will begin expecting payments soon.

Eneo’s financial struggles are becoming increasingly evident. As of December 31, 2022, the company reported a cash flow deficit of CFA 113 billion and total debts of CFA 700 billion, half of which is owed to various suppliers. The national treasury, which typically intervenes to pay public-sector debts to Eneo, has been unable to keep up with these payments. Furthermore, the independent power producer Globeleq, which operates the Kribi and Dibamba power plants, has had to shut down its facilities multiple times in recent months due to unpaid bills totalling CFA 137 billion, which Eneo has failed to settle despite repeated assurances.

With Nachtigal now operating at full capacity, either the government or Eneo must secure CFA 10 billion each month to fulfill NHPC’s contractual obligations. However, it may not be feasible to immediately consume all the electricity generated at Nachtigal. Delays in constructing essential transmission lines from the Nyom substation near Yaoundé, as well as from Nachtigal to the capital, are hindering distribution.

According to sources involved with the project, several transmission lines from Nyom are still in the final stages of construction, while the line connecting Nachtigal to Yaoundé, constructed by the French company Bouygues, is currently under inspection. This inspection is crucial before the line can be transferred to Sonatrel, the national electricity transmission company. The assessment will evaluate the stability of the pylons, identify any damage or corrosion, and check the integrity of the electrical conductors and insulators.

The Nachtigal project is transformative for Cameroon, representing an investment of CFA 786 billion. As the country’s largest power generation facility, it is expected to enhance Cameroon’s installed electricity capacity by 30%. This increase will improve energy security and shift the energy mix towards hydroelectric power, yielding significant savings on fuel costs for the nation’s thermal backup plants.

Beyond meeting domestic energy demands, the Nachtigal plant is positioning Cameroon as a leader in electricity exports within Central Africa. As part of the Central Africa Power Interconnection Project (Pirect), Cameroon aims to export 100 MW of electricity to Chad beginning in 2027, providing vital energy to its neighbour.