Cameroon’s energy challenge is no longer primarily about identifying projects or mobilising donor interest. It is about navigating a tightening fiscal perimeter shaped by contingent liabilities. As of late September 2025, the country’s contingent debt stock stands at 4,897 billion FCFA, accumulated almost entirely through Public-Private Partnership (PPP) agreements. A substantial and strategically sensitive share of this exposure lies in the electricity sector, creating a binding constraint on how future energy ambitions can be financed.
This reality casts a long shadow over Cameroon’s participation in the “Mission 300” energy compact, a donor-backed initiative aimed at connecting 8 million new subscribers and raising installed capacity to 3,000 MW. The program requires an estimated $12 billion in financing. The core issue is not the scale of ambition, but the mismatch between these massive funding needs and a public balance sheet already saturated by state guarantees. This tension forces a fundamental rethink of the country’s financial engineering model for the energy sector.
A closer look at the contingent debt portfolio reveals the depth of the challenge. PPP projects alone account for 4,895 billion FCFA of the total stock. While this figure includes multisectoral infrastructure—ports and roads among them—the electricity sector dominates both in volume and in systemic risk. Energy PPPs are uniquely sensitive because they sit at the intersection of long-term demand uncertainty, regulated tariffs, and fragile transmission and distribution networks.
The Nachtigal hydroelectric dam, structured as a concessive PPP, illustrates this exposure, weighing 787.1 billion FCFA on the contingent balance sheet. In addition, a smaller but more direct guaranteed debt of 1.7 billion FCFA is linked to the Kribi Power Development Company (KPDC). Beyond their nominal amounts, these commitments entail significant fiscal risk through contractual mechanisms such as “Take-or-Pay” clauses, which obligate the State to secure private operators’ revenues even in cases of grid failure or downstream inefficiencies.
Under these conditions, layering an additional $12 billion of energy investments onto the system cannot rely on the historical model of expansive sovereign guarantees. Doing so would materially heighten fiscal vulnerability. Recognising this constraint, the government has begun to act on the institutional front. The adoption, in July 2023, of a new law governing the general regime of partnership contracts aims to strengthen governance, improve project selection, and better contain future budgetary risks.
Yet legislative reform alone is insufficient. The credibility of Cameroon’s energy financing strategy now hinges on the successful execution of the World Bank–supported reform program, valued at $300 million. As of December 25, 2025, this program has delivered initial but still fragile results. Progress has been made in reducing the tariff deficit and clearing cross-debts within the sector. Still, these gains remain conditional on deeper reforms—particularly the modernisation of commercial management and revenue collection.
Ultimately, Cameroon’s ability to translate the “Mission 300” ambition into reality rests on measurable internal performance improvements. The deployment of smart meters in public administrations, the tightening of financial flows following the renationalisation of ENEO, and the restoration of payment discipline are not peripheral reforms; they are preconditions for rebuilding investor confidence without overextending the State’s balance sheet.
If these efforts succeed and the sector’s accounts are effectively cleaned up in 2026, Cameroon could unlock more flexible financing structures that reduce reliance on sovereign guarantees and limit contingent liabilities. If they fail, the existing stock of contingent debt will act as a structural brake, forcing authorities into difficult trade-offs between fiscal solvency and the urgent need for mass electrification. In this sense, Cameroon’s energy transition is as much a test of financial governance as it is of infrastructure delivery.
Idriss Linge
