EDC profits soar after recovering 17 billion FCFA debt.

The information was unveiled after the Board of Directors rose from its 53rd session and announced a net end of year profit that stood at a staggering 12 billion FCFA for 2023. With the Board stressing that the amount of profit for the year ended was the highest in the history of the EDC.

Members noted that despite the challenges management faced during that year, there was recorded improvement in revenue collection due to intervention by the Ministry of Finance that gave much needed assistance. 

Even more, between 2021 and 2022, accumulated debts owed EDC by ENEO amounting to some 17 billion FCFA in unpaid water fees were settled through a mechanism to partially clear the electricity sector's debt.

The managers disclosed that the Memve’ele dam invoices are managed through cross-debt arrangements between the state and ENEO in the absence of a finalised power purchase agreement between EDC and ENEO.

EDC officials who opted for anonymity told reporters that this success story is also attributable to managerial reforms focused on prioritizing expenditures as well as the addition of revenue from the direct sale of electricity produced by the Memve´ele (211 MW capacity) and Lom Pangar (30 MW) power plants to its accounting portfolio. 

The officials further unveiled that in 2022, electricity sales from the Memve’ele dam totaled 23.34 billion FCFA, as per the 2022 report from the Technical Commission for the Rehabilitation of Public and Para-public Sector Enterprises, CTR.

But management warned that despite this impressive net result for that year, EDC's financial indicators are not entirely positive. 

"This is an accounting result that does not reflect the company's cash flow reality, although it has also improved," an EDC source commented. 

Reason why in the final statement released at the end of the 53rd session, the Board of Directors expressed cautious optimism and satisfaction that "the appreciable progress made in the performance project for the past fiscal year, was made possible despite the fact that the company’s overall financial situation still remained precarious”.

Overlapping functions of state agencies & accumulation of debts

Observers say there is so much obscurity and overlap in functions among public establishments to a point where it is difficult to clearly arrive at figures which each establishment owes the other or who to pay money to in order to make even.

Even though many stakeholders say the financial situation of EDC has been made precarious over the years, due to unpaid water rights by its main partner, ENEO, for use of the country's reservoir dams and electricity sales whose invoices are creditable to EDC. 

According to the 2022 CTR report, it is estimated that these unpaid invoices stood at 34.92 billion FCFA as at 2022, none of which were recovered from ENEO. Additionally, "ENEO's water fee receivables billed since 2016 amounted to some 48.7 billion FCFA as of December 31, 2022".

As a public asset manager, EDC oversees various reservoir and production dams in Cameroon. It mainly bills ENEO for the water volumes used for electricity production and the electricity ENEO distributes. 

However, ENEO that is controlled by the British investment fund Actis, is also struggling with liquidity challenges due to unpaid state and public sector debts, which incapacitates its ability to pay these fees. 

Moreover, ENEO frequently conditions water fee payments to EDC on settling its receivables from the central public administration, state-owned enterprises, and decentralized local authorities, which in turn, perpetually weakens the financial standing of EDC.

This story was first published in The Guardian Post issue N0:3173 of Friday July 19, 2024