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Economist scrutinises North West region’s multibillion hydropower project

Dr. Susungi ©All rights reserved

Dr. Nfor  N Susungi, Cameroonian Senior Economist and politician advocating the Independence of Anglophone Cameroon, otherwise known as Southern Cameroons, has scrutinized the potential of the multibillion Kpep Hydroelectric Project. In a write-up posted online, Dr Susungi presents an economic outlook of the project and its importance to Cameroon as whole and to Anglophone Cameroon in the case of an eventual independence. Read on:

Kpep is a small village you have never heard of. But it is located in Furawah subdivision of Menchum. It holds the key to solving the electricity problems of the whole of Cameroon. The village is on the right bank of the Katsina Ala River and not far from the Nigerian border.

Many hydroelectric projects in Cameroon have been located on the Sanaga river. But the problem is that from the Nachtigal Falls near Monatele to the sea, there are a number of cataracts where the river can be impounded to generate electricity. Apart from Edea hydroelectric plant which was developped in the 1950s to provide electric power to the aluminum smelter in Edea, other generators have been installed upstream in Song Loulou while other projects are planned for Song Dong, Petit Eweng, Grand Eweng, Kikot and Song Mbengue. It is expected that a hydroelectric plant shall eventually be installed in Nachtigal Falls itself.

The problem with hydroelectric power plants located on the Sanaga river is that the volume of water flowing down the river suffers from significant seasonal variations because of the absence of a large storage dam. For this reason it became necessary to construct four water storage dams further upstream from where the water is released during the dry season in order to regulate the volume of water flowing into the turbines. That is the role of the Bamendjin dam, the Mape dam, the Mbakao dam and the Lom Pangar dam.

The new electricity operator in.Cameroon is called Energy of Cameroon (ENEO). ACTIS is a private limited partnership registered in the UK which operates as an equity investment firm. ACTIS invests in financial services, consumer services, energy, mining and metals, real estate and healthcare.

In 2014, Actis acquired a 56% stake in Cameroon’s national electricity integrated utility, AES SONEL which owned and operated over 900MW of generation capacity and distributes electricity to more than 900,000 customers.

Act is paid $202 million to acquire 56% of AES SONEL plus two independent power plants in Kribi (KPDC) and Dibamba (DPDC). However in the 2014 transaction, the two independent power plants (KPDC and DPDC) were taken over by Globeleq which is a wholly owned subsidiary of Actis. Globeleq is the Actis subsidiary which focuses on electricity generation.

In September 2015, Actis sold Globeleq Africa to a company of a consortium owned Norfund and the CDC(Commonwealth Development Corporation) for $222 million. But Globeleq Africa still operates the two independent power companies in Kribi and Dibamba.

The Republic of Cameroon and Energy of Cameroon (ENEO) signed an agreement on Jan. 13 to develop the US$1.5 billion 485-MW Kpep hydropower project, located on the Katsina-Ala River near the Nigerian border in the Northwest Region of Cameroon.

ENEO is a semi-public company in the Cameroon energy sector of which 56% of its capital is held by Actis and 44% by the state. Actis, based in London, is an investor in growth markets across Africa, Asia and Latin America, and the company said it has US$6.3 billion in funds under management today.

According to Joule Africa, a pre-feasibility study conducted in 2012 by Germany-based Lahmeyer International identified the potential of the Katsina-Ala River as a site to develop the Kpep project. Completion of the Kpep project is expected to take four years and when commissioned, according to ENEO, will increase Cameroon’s power generation capacity by 40%.

What all of this means is that the Kpep hydroelectric power project will be developed by Actis as an independent power project in partnership with the CDC and Norfund for the Cameroonian market and ENEO shall be the main customer of the Kpep hydroelectric plant.

In the eventuality of Southern Cameroons independence, the country shall become a major exporter of electricity to the Republic of Cameroon. But the electricity from Kpep shall be of critical importance for the Palm oil mills that shall be installed in Akwaya subdivision of Manyu.

 

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