1. Mini-Grids as a Path to Electrification in Africa
Mini grids have demonstrated their significance in enhancing energy access across Africa by reaching millions of individuals currently without electricity. According to the Africa Energy Outlook 2022 by the International Energy Agency (IEA), mini grids are indeed the most cost-effective way to provide electricity access to 265 million people in 21 African countries by 2030, requiring a total investment of US$65 billion. Governments must implement policies that stimulate the development of mini grids through an effective regulatory structure.
Despite the growing adoption of mini grids in Sub-Saharan African countries, existing frameworks are not consistently clear. In Cameroon, there has been no specific regulatory development since the enactment of primary legislation — the electricity code. In Cameroon, where approximately 40% of the population lacks access to electricity, mini grids present a transformative opportunity to rapidly increase electrification rates, particularly in rural and underserved areas.
2. Mini-Grids in the Context of Cameroonian Legislation
In the Cameroonian context, the term “mini grid” lacks a specific definition within the relevant regulatory instruments. Nevertheless, according to the interpretation and application of Article 68 of Law N° 2011/022 of 14 December 2011 governing the electricity sector in Cameroon (the Electricity Code), a project can be identified as a mini-grid project if it entails the generation of electricity, along with the installation and operation of electricity distribution lines aimed at supplying power directly or indirectly to specific communities without grid connection. Power generation projects with a capacity of less than 5MW, and with distribution lines independent of the national grid, fall under the classification of mini-grid projects.
3. The Key Challenges for the Mini-Grid Sector
a. Challenges Around Licensing Requirements for Mini Grids
Mini-grid operators are required to get an Authorization according to the conditions specified by regulations, issued by the Electricity Sector Regulatory Authority (ARSEL) following consultations with the Ministry of Energy and Water Resources (MoE). Authorizations are only granted when public electrical service is unavailable or insufficient. By virtue of the concession contract between the Republic of Cameroon and Eneo (the power utility), Eneo is currently the sole concessionaire across a distribution perimeter covering a substantial part of the national territory — meaning private companies would be unable to obtain authorization within Eneo’s designated geographical coverage, even where the utility cannot adequately serve it.
b. Multiplicity of Licenses and Uncertainty Around Licensing Fees
Several licenses are needed for setting up generation facilities, installing and running a power distribution system, and installing private electricity lines. According to Ministerial Order No. 0193/A/MINEE dated April 28, 2014, non-refundable license costs for electricity generation and distribution are as follows:
- XAF 25,000 for capacities below 100kW
- XAF 100,000 for capacities between 100kW and 1MW
- XAF 2,500,000 for capacities between 1MW and 5MW
- XAF 100,000 for setting up distribution lines in remote communities
c. Limited Grid Integration Policies
There is no clarity in the legal framework regarding the fate of mini grids upon arrival of the national grid in areas where mini-grid projects already exist. If an Authorization is granted to a private company in an area covered by ENEO’s license and ENEO subsequently expands the grid into that community, the mini-grid project is put in direct competition with ENEO — so developers must exercise caution in site selection and avoid areas already identified by the Rural Electrification Agency (REA) as priority sites.
d. Lack of a Clear Framework for Partnerships with Municipal Councils
One of the key obstacles to mini-grid development in Cameroon is the absence of a clear framework for Public-Private Partnerships (PPPs) between the private sector and municipal authorities. Law No. 2019/024 (the “Decentralisation Law”) and Law No. 2023/008 offer a clearer framework for PPP contracts, but these instruments are primarily designed for large-scale projects and involve complex, bureaucratic processes — municipalities require approval from the State’s representative (Senior Divisional Officer) before entering agreements with private sector entities, adding an extra layer of complexity.
e. Tariff Design Methodology and Considerations for Mini Grids
There is currently no specific tariff framework applicable to the sale of electricity to local communities in off-grid areas. Tariffs are determined using an Individualized Cost-Based Tariff model, and it is the responsibility of the project developer to propose a suitable tariff methodology to ARSEL for validation — an approach that creates uncertainty developers must navigate on a project-by-project basis.
f. Complexity Around the Requirement to Possess Construction Permits
A construction permit is required before undertaking a new construction project and is only issued where the plot has a land title. Existing instruments do not specify a building permit requirement for mini-grid projects specifically, but as a general rule, developers are advised to acquire tentative construction permits from local mayors to ensure infrastructure is duly authorized.
g. Uncertainty Around ESG Standards to Be Complied With
Beyond Law No. 96/12 of 5 August 1996 relating to Environmental Management, there is no specific direction for ESG standards tailored to mini-grid projects — the same general rules applied to large hydropower projects are often imposed on small-scale mini grids, requiring ESIAs, hazard assessments, and other complex documentation typically reserved for large-scale power projects.
4. Moving Forward: Progress and Promise in Cameroon’s Mini-Grid Sector
Recognizing the challenges faced by mini-grid developers, the government has begun taking significant steps to create a more favorable environment, focusing on two key areas: the customs regime and quality standards.
Customs Regime Reforms
- A preferential customs regime was established for certain solar energy and off-grid electrification products under the 2024 Finance Law.
- Qualifying equipment can now be imported into Cameroon without incurring customs duties or taxes.
- A Ministerial Circular details a specific list of renewable energy products enjoying this exemption for 24 months, beginning January 1, 2024.
Quality and Technical Standards
The Standards and Quality Agency for Cameroon (ANOR) established 138 new Cameroonian standards in the field of renewable energy on August 16, 2024:
- 33 standards related to new and renewable energies
- 105 standards in the electricity and electrotechnical sector
To build on this momentum, we recommend:
- Creating and implementing a clear licensing framework for mini grids that addresses all of the issues identified above.
- Developing standardized contractual documentation, tariff frameworks, and financial models.
- Continuing to create a more investor-friendly environment.
By addressing these areas, Cameroon can fully unlock the immense potential of mini grids, reducing energy costs for households and businesses and lowering greenhouse gas emissions.
Developers evaluating equipment eligible for the 2024 customs exemption can cross-check import procedure against our Importer’s Guide to Solar, available in the resource library.
