AES Sonel

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In July 2001 the national electricity company of Cameroon, Nationale d'electricite de Cameroun (Sonel), was 56% acquired by AES Sirocco, a subsidiary of US AES Corp, for CFAFr 53 billion (US$70.39 million). Sonel was the state electricity utility, owning and operating Cameroon’s electricity generation, transmission and distribution throughout the country. At the time of the transaction, Sonel was granted a 20 year concession contract to provide the electricity services in Cameroon. Under the contract, Sonel was required to connect 1.3 million new lines over 20 years. Such commitment was estimated to represent investment for CFAFr 1 trillion (US$ 1,300 million). Of the total purchase price, CFAFr23 billion (US$ 30.5 million) went to the Cameroonian treasury, with the remaining CFAFr30 billion (US$ 39.8 million) to be used to increase Sonel's capital. The company was transferred with US$260 million of long term liabilities. The 56% stake in Sonel was granted through a competitive bidding process to which 5 companies were invited but only one (AES Sirocco) submitted a financial offer. The AES offer was lower than the $80-90 million the government had anticipated receiving for the stake. The remaining 44% stake held by the government was intended to be partially sold to private investors. The company was renamed AES Sonel in October 2001. In 2005 it was one of the largest African electricity utilities, with 933 MW of installed capacity (77% hydro, 23% thermal), 1,800km of HV and 12,000 km of MV lines, 3,000 employees (2005), 528,000 LV customers, 3,528 GWh sold per year and with $273 million in revenue (2004). AES Sonel remained the sole electricity generator in Cameroon in 2005. By 2005, the company had invested in 133MW of additional thermal generation since privatization in 2001. Investment projects over 2002-2004 included an 80 MW oil generation plant at Limbé, the conversion of an oil generation plant in Oyomabang (Yaounde), capacity expansion of a thermal plant in Logbaba (Doula) and technical upgrades to the transmission and distribution systems. In 2005 AES Sonel announced its intentions for $450m of further capital expenditure, including a new gas power plant (150-200 MW) near the port of Kribi and for rehabilitation and reconstruction of the 263 MW Edea hydropower scheme. Such program was to be funded with new loans. In December 2006, AES SONEL secured a $340 million (EUR 260 million) financing package--one of the largest ever provided to a privatized utility in Sub-Saharan Africa--to finance a majority of these system improvements. The 13-year $340 million financing was provided by a syndicate comprising eight developmental finance institutions, which included the International Finance Corporation (IFC), the European Investment Bank, African Development Bank, the Central African Development Bank, DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbH, the Emerging Africa Infrastructure Fund, FMO - The Netherlands Development Finance Company and Proparco. The IFC's contribution was 70 million Euros ($88.2 million), while AFDB lend some 60 million Euros ($75 million). In December 2009, AES majority owned subsidiary, Kribi Power Development Company, commissioned the 86 MW Dibamba power plant. The Dibamba facility was using heavy fuel oil and was selling power under a 20-year tolling agreement with AES SONEL.