Cameroon to power up its economy

Tom Nevin

The disappointing performance of Cameroon�s privatisation of energy sector and the resulting drag on economic growth have led to country�s vast gas resources being strategised as its principal source of power. Blessed with copious gas deposits which, converted to energy, could more than solve the West African country�s present energy problems, according to local and international energy professionals.

The precarious reliance on electricity power from hydro-generation would be short-circuited with the strategic installation of gas-fired capacity. Gas turbine power stations are relatively quick to build, are cost-efficient to run and are clean-burning.

Importantly, gas will also be integrated into homes for domestic use as a substitute for traditionally-used wood fuel, preventing further damage to the environment through the stripping of forests.

Cameroon�s economy has been under a liberalised transformation for the past decade, with a significant departure from centralised economics to market dynamics and competitiveness.

�However,� notes the United Nations Economic Commission for Africa, �the performance of the power sector since 2001 has been extremely disappointing, but at least one external condition cannot be blamed on the reform. Severe droughts have limited the supply of water, which is the energy behind 90 percent of the electric power produced in Cameroon. This led to major power shortages that have damaged consumers as well as the whole economy.�

Cameroon is now taking a long, hard look at its hotch-potch energy sector, and gas has emerged as the most logical choice.

Gas-fired turbine generators would be a welcome substitute to hydro for both urban and rural electrification, the latter being in the greater need.

Cameroon�s established energy sources are fuelwood, electricity and petroleum. The switchover to gas will gradually predominate and replace the more expensive and environmentally damaging fuels sources.

�The wider picture of life in Cameroon is also an encouraging one,� reports Tafu. �The country is benefiting from a 3-year programme of poverty reduction and growth promotion, along with an IMF-supported debt relief initiative.�

Modest at best, the production of petroleum in Cameroon is now in decline and exploration for new deposits is being encouraged. Enlarged electricity network

Cameroon�s sole energy provider AES SONEL plans to more than double its electricity network, bringing in hitherto unserved parts of the country. The company expects to add about 50 000 new electricity connections each year over the next 15 years in the upgrading its of its existing transmission, distribution and generation facilities. AES SONEL, in partnership with the Cameroon government, is the sole electric utility in Cameroon and currently generates and distributes electricity to more than 528,000 customers in the country.

�This is the most ambitious expansion program for Cameroon�s electricity sector. We expect to more than double the number of people we serve in Cameroon and to provide electricity to thousands of individuals who never had it before,� said John McLaren, president of AES, SONEL�s European parent.

Cameroon enacted a new electricity law in 1998 and privatised its integrated utility in 2001. The main goals were to stimulate investment, develop competition and decrease prices, in accordance with structural adjustment projects from the World Bank and the International Monetary Fund. AES-Sonel holds a series of concession contracts in generation (952 MW), transmission, system operations, distribution and sales. As it is currently the only company holding such concession contracts, it is a de facto monopoly. The new legislative framework of the sector would, however, allow other players to enter the generation and wholesale markets. -Business in Africa Magazine