Cameroon’s Ministry of Finance and its financial partners are accelerating discussions over new financing tied to the Nachtigal hydropower project. According to information reported by Business in Cameroon, Financia Capital is preparing to act as an arranger in a coordinated financing operation aimed at replenishing a standby letter of credit (SBLC) denominated in euros and valued at more than €86 million—just over CFA56 billion—currently carried by SCB Cameroon.
Technical discussions are ongoing and could conclude in the coming days. The minister of finance has already given preliminary approval for the fundraising operation. “We are finalizing the transaction’s coverage documents and are currently in the legal phase,” a source close to the matter said.
According to several sources familiar with the talks, the financing is unlikely to be provided by a single lender. Given the size of the operation, financial institutions are leaning toward a syndicated structure that would involve several participants.
In that scenario, Attijariwafa Bank, the parent company of SCB, could also take part in the deal. At this stage, however, the final financial structure has not yet been fully defined or approved by all stakeholders. “We are still in the preparatory phase,” a source involved in the discussions said.
Preventing the activation of a World Bank counter-guarantee
For the Cameroonian government, the priority is to replenish the mechanism before April in order to avoid triggering the counter-guarantee granted by the World Bank in favor of Société Générale in Paris. That guarantee would be activated if the state is no longer able to meet its commitments.
Both the government and the World Bank view this scenario as undesirable. Its activation could lead to the suspension of certain World Bank financing programs in Cameroon, with consequences extending beyond the Nachtigal project itself.
A guarantee almost fully used
The mechanism was initially set up under the commitment agreement linking the state to NHPC, the company responsible for operating the Nachtigal dam. Cameroon established the €86 million SBLC—equivalent to slightly more than CFA56 billion—to cover its payment obligations, particularly in the event of a default by Eneo, the buyer of the electricity produced.
However, repeated payment defaults by Eneo have already led NHPC to draw on the guarantee for about CFA55 billion of the CFA56 billion available. The facility is therefore nearly exhausted, placing the government under significant pressure from its financial partners.
Arrears now exceed CFA70 billion
The initiative follows a meeting held in Paris on January 27, 2026, which brought together shareholders and lenders involved in the project. One of the commitments made during that meeting was precisely to replenish the letter of credit held with Société Générale in Paris.
These negotiations come as the government’s payment arrears to NHPC are believed to have surpassed CFA70 billion. Since the fourth quarter of 2025, the Ministry of Finance has also been negotiating with several local banks to establish a CFA100 billion financial guarantee mechanism structured as a revolving fund.
Behind the technical financial arrangements now under discussion lies a broader issue: sovereign credibility. Cameroon’s ability to restore this financial safeguard in time will determine not only the stability of the Nachtigal project’s financing but also the strength of its relationship with international lenders.
In the short term, the market will focus less on the engineering of the deal itself than on whether the parties can secure the operation in time and avoid triggering the international counter-guarantee. That outcome will largely determine the immediate financial stability of the framework supporting the Nachtigal project.
Amina Malloum
