Prometal Power Deal Pits Cameroon’s Electricity Companies Against Each Other

A proposed electricity supply agreement between Cameroon’s state-owned Electricity Development Corporation (EDC) and steel producer Prometal has exposed growing tensions over how revenue should be shared across the country’s power sector.

The deal would allow Prometal, Central Africa’s leading steel processor, to buy electricity directly from EDC, the state-owned company that manages several hydropower plants. The proposal has drawn strong opposition from Société camerounaise d’électricité (Socadel), the public electricity distributor, which argues the move could further weaken its finances.

In a June 8, 2026 letter to Prime Minister Joseph Dion Ngute, Socadel Chairman Antoine Ntsimi urged the government to postpone the signing of the bilateral power supply agreement between EDC and Prometal until a full assessment of its institutional, financial, technical, and sector-wide implications is completed.

The project still depends on EDC obtaining a power generation concession it has been awaiting since 2022. Under the proposed arrangement, electricity generated at EDC-managed hydropower plants would be transmitted to Prometal’s factories in Douala-Bassa through the national transmission grid operated by the National Electricity Transmission Company (Sonatrel). The agreement does not involve a direct physical connection between the plants and Prometal’s facilities but rather a bilateral supply contract using the existing transmission network.

Socadel argues that losing Prometal, which operates five industrial plants in Douala-Bassa, would further destabilize the electricity sector and deepen the distributor’s financial difficulties. The company already carries debt estimated at about CFA800 billion.

According to Ntsimi, the government’s electricity sector reforms are built around strengthening Socadel’s customer base, improving its financial performance, and increasing its investment capacity. Removing its largest industrial customer, he argues, would undermine those objectives.

The company did not estimate how much revenue it would lose. It says, however, that Prometal generated about CFA42 billion in electricity bills between 2016 and 2025. Part of that revenue is normally used to compensate other participants in the electricity value chain, including power producers, EDC, and Sonatrel.

EDC expects about CFA12 billion a year

Officials close to the Prime Minister’s Office take a different view. One source familiar with the matter said the financial health of the electricity sector should not be assessed solely through Socadel’s position, noting that the sector depends on several companies whose financial sustainability also needs to be protected.

According to the source, the previous market structure was heavily centered on Eneo, now Socadel, which often struggled to transfer payments owed to other operators.

Under Cameroon’s electricity market structure, Socadel collects most customer payments before distributing revenue to power producers, Sonatrel, EDC, and other sector participants. However, the distributor’s financial difficulties have repeatedly delayed those payments, weakening the liquidity and investment capacity of its partners.

The same source argues that improving the financial position of other state-owned electricity companies would strengthen rather than weaken the sector by giving them the resources needed to improve operations and invest.

Sonatrel already benefits from Prometal’s transition to the high-voltage network. According to estimates obtained by Business in Cameroon, the transmission agreement generates about CFA4 billion in annual revenue for the company, improving both its cash flow and its ability to maintain and expand the transmission network. EDC, meanwhile, expects the proposed supply contract to generate about CFA12 billion in annual revenue. Although the agreement has not yet been finalized, the prospect of receiving those funds directly has raised expectations within the company.

An EDC executive said the company’s business model depends on earning revenue from hydropower infrastructure and using those resources to finance new energy projects. Delays in payments from Socadel, its main customer, have made that difficult. Direct revenue from Prometal, the executive said, would help move several projects forward.

Those projects include a planned 400 MW hydropower plant at Mbakaou, a second phase of the Memve’ele project, and a 50 MW solar power plant. The company did not provide implementation timelines or details on the maturity of those projects.

Prometal’s electricity demand keeps rising

If signed, the agreement would make Prometal only the second company in Cameroon to buy electricity directly from a hydropower producer after Cameroon Aluminium Company (Alucam). Alucam, long regarded as the country’s largest electricity consumer, with demand that at one point accounted for about 40% of national power generation, receives electricity from the Edea hydropower plant.

Unlike the EDC proposal, however, the Edea and Songloulou hydropower plants are operated by Socadel, which may explain why Alucam’s supply arrangement has not generated similar concerns.

For the government, the proposed agreement is intended to support Prometal’s industrial expansion. As production increases across its five facilities in Douala-Bassa—Prometal 1, Prometal 2, Prometal 3, Profab, and Progaz—the group’s electricity demand has grown rapidly.

According to the company, its power demand rose from 26 MW in 2024 to 40 MW in 2025. It is expected to reach 60 MW in 2026 and 90 MW in 2027, when its sixth plant, Proalu SA, begins operations. The facility will manufacture aluminum coils and electrical cables.

The proposal goes beyond supporting Prometal’s growth. It also forces the government to decide how to strengthen EDC and Sonatrel without further weakening Socadel’s finances.

The government’s decision will need to balance the financial sustainability of state-owned energy companies, the viability of the electricity distributor, and the growing power needs of large industrial consumers.

Brice R. Mbodiam