On 9 March 2026, in its Article IV consultation report on Cameroon, the International Monetary Fund (IMF) warned that the renationalisation of the public electricity company – now the Société camerounaise d’électricité (Socadel) after the conversion of Eneo into a fully state-owned firm – constitutes a new source of risk for Cameroon’s public finances.

In the section devoted by IMF staff to the power sector, the full takeover by the State of a structurally loss-making company exposed to sizeable contractual commitments is described as a transfer to the sovereign budget of risks that were previously shared with private shareholders.

The IMF recalls that Cameroon remains at high risk of debt distress despite recent fiscal consolidation and stresses that containing quasi-fiscal risks stemming from state-owned enterprises is now a central pillar of the country’s debt sustainability strategy.

Budgetary risk now concentrated on the State

According to the Fund’s teams, the renationalisation of the historic operator has increased the State’s exposure to the financial weaknesses of the electricity sector, with the government becoming at once the near-sole shareholder, the guarantor of several contractual commitments and one of the company’s main debtors through its own unpaid electricity bills.

The report notes that the utility’s cash pressures stem as much from operational challenges as from delayed payments by public administrations and entities, compounded by sizeable commercial losses linked to fraud and illegal connections.

When Eneo was turned into Socadel, the new state-owned company inherited an overall debt estimated at around  FCFA 850 billion  and a monthly cash deficit of about  FCFA 13 billion , making it a potential source of recurrent pressure on the central budget via guarantees, recapitalisations and short-term advances.

In its debt sustainability analysis, the IMF highlights rising contingent liabilities related to state-owned enterprises and power-purchase arrangements with private generators among the main factors weighing on Cameroon’s public debt trajectory.

Large arrears and rigid power purchase contracts

IMF staff indicate that, by end-2024, government arrears to the public power utility amounted to more than  2.1%  of GDP, or roughly  FCFA 700 billion , underscoring the scale of financial imbalances that have built up in the sector.

The Fund also points to the burden of the firm power purchase agreement signed for electricity from the Nachtigal hydropower plant, which requires payment for generated energy even when transmission constraints prevent full evacuation to the grid, thereby risking additional budgetary pressure until transmission capacity is significantly upgraded.

Restructuring data show that, in early 2026, unpaid obligations owed to Nachtigal Hydro Power Company (NHPC) were estimated at nearly  FCFA 70 billion , highlighting persistent liquidity pressures across Cameroon’s electricity sector.

For IMF staff, these contractual mechanisms, combined with rising demand and infrastructure bottlenecks, make the electricity sector a persistent source of fiscal risk even after nationalisation.

A renationalisation rooted in a long reform cycle

By decree dated 4 May 2026, President Paul Biya converted Eneo into a public limited company wholly owned by the State and renamed it Société camerounaise d’électricité (Socadel), thereby formalising a renationalisation process launched after the government repurchased all shares held by Cameroon Power Holdings.

The Ministry of Finance notes that this move follows the early-2000s privatisation, when the former Sonel was sold to foreign investors, before the State decided to progressively regain control over what it views as a strategic asset for industrial policy and energy security.

In its structural diagnosis, the IMF underlines that Cameroon’s state-owned enterprises continue to suffer from governance weaknesses, slow reform and poor financial management, which heightens the importance of tightly managing the risks associated with renationalising strategic sectors such as electricity.

The authorities, for their part, present the creation of Socadel as a lever to overhaul the sector’s business model, improve bill collection and rationalise relationships with private generators and the transmission operator.

Next steps: fiscal trade-offs and business model reform

The IMF urges the Cameroonian authorities to strengthen public financial management, clarify the State’s commitments towards state-owned enterprises and better incorporate quasi-fiscal risks into medium-term budget planning.

Fund staff judge that, without a reformed business model for the electricity sector and a marked improvement in receivables recovery, Socadel’s nationalisation could continue to absorb significant budgetary resources at the expense of other public investment priorities.

Upcoming budget negotiations over clearing arrears, financing guarantees and scheduling any recapitalisation of the public utility will be a test of the State’s ability to contain this new risk while still pursuing its security-of-supply and growth objectives.