Eneo Today : Some Answers by the CEO…
After the resignation of Mr. Nana Kontchou, we would have expected to have another Cameroonian, why an expatriate?
It should be noted that Actis is committed to providing Eneo Cameroon with an experienced person in the core business. Eric MANSUY has held several management positions in power utility companies in Eastern Europe (as President and CEO), and has a wealth of professional experience in Africa. He brings more than 30 years of experience in the transmission and distribution of electricity, which will help improve Eneo’s performance while increasing customer satisfaction.
In recent weeks, we have witnessed an increase in frequent as well as prolonged power cuts. What is happening? When will we see a complete return to normal?Several reasons are behind this situation for which we would like to express our apologies to our customers.
First of all, the company if facing a declining financial situation. The electricity sector in general is experiencing an acute liquidity crisis. For Eneo, we have a very tight cash flow situation, due to huge unpaid bills, which prevent us from honouring all of our commitments to our suppliers. The most visible consequence is reflected in the difficulties encountered in the daily supply of fuel to our thermal power plants, which results in sporadic load shedding that is harmful to our customers, and more generally to the economy of the country.
We are working relentlessly with the government and all stakeholders in the sector to find suitable solutions.
There is also the scarcity of wood poles for repairs. With the security situation in the North-West, from where we get all our raw materials, pole production has dropped by over 90%. Eneo has contacted public authorities, through the Ministry in charge of forests which has given its agreement in principle, for the sustainable exploitation of some eucalyptus reserves in the West. Pending the completion of this option, the company is in the process of deploying its mixed-pole strategy which consists of reintroducing concrete and metal poles alongside wood poles. To this end, we have engaged (and are supporting) six local companies for the manufacture of concrete poles in order to strengthen and secure the electricity network.
We are experiencing power outages, Eneo customers have no energy but very often they are still issued bills at the end of the month as if everything was normal. How can you explain this?
We would like to reiterate our apologies to our customers for these annoying disruptions they are experiencing. We hope that the issue of financial stability in the sector will be resolved in order to help improve service. The current situation of the service is all the more regrettable that it is coming after several considerable efforts have been made in recent years to improve the quality of the distribution network in both urban and rural areas.
With regard to billing, it is important to state that a bill only reflects what the customer has actually consumed. When you do not have any power supply, your meter will not run. It may happen that a customer considers that his consumption is too high. In this case, in accordance with the Rules of Service, he must contact Eneo through his local agency or through our online platforms (MyEasylight, Twitter, Facebook, in particular).
Furthermore, we have made several procedural, organizational and technological reforms to allow for the most accurate billing possible. This explains why smart meters were introduced into the network, for example. Despite these efforts, we recognize that there may be problems with some customers. We manage them on a case-by-case basis, and continue to draw lessons in order to improve our systems and processes.
At the same time, it should be noted that one of the reasons why we introduced the prepaid solution is to gradually get rid of billing. Not only are customers spared of the stress of waiting for bills, they also become autonomous, change their habits and take control over their consumption, which they can manage efficiently by activating the energy-saving option whenever necessary.
These power cuts cause huge losses, particularly in households where food is damaged because it cannot be properly preserved. Shouldn't Eneo compensate customers for this damage? What is your share of responsibility in these situations?
Customers requesting compensation have the option of contacting Eneo in accordance with the procedures in the Rules of Service. Once again, we regret any inconveniences experienced by customers due to the disruptions and we are working with the other stakeholders to improve on this situation.
Connection deadlines are often not respected. Customers complain of being poorly welcomed. What is Eneo doing?
Whenever customers complain, we are concerned. The curve of average connection deadlines after payment of estimates has witnessed a satisfactory trend in recent years. From 20 days to 5 on average. It is thanks to reforms (lower subscription cost, simplification of procedures, etc.)
Unfortunately, due to problems with pole supply, it is becoming increasingly difficult to make timely connections that require poles. As we said earlier, we are working with the public authorities to overcome the constraint on these supplies.
What is the situation of Eneo's outstanding bills?
Whether it is the debts of key customers towards Eneo or those of Eneo towards its partners, the amounts are huge.
Eneo is working with public authorities, the regulator, and its key customers and partners to find a compromise, with a view to returning to normal as soon as possible. In the meantime, the situation requires the streamlining of available resources at all levels.
Since January 2019, a new player is in charge of Electricity Transmission. Have the operating limits already been defined, to minimize possible negative impacts on customers?
With the launch of the process of transferring Energy Transmission operations, a new player has entered the sector: the National Electricity Transmission Company (SONATREL), alongside others like the AER, ARSEL, EDC, DPDC, KPDC, etc. Each actor has a well-defined role, just like links of the same chain. Good coordination and regulation between all actors and a solid financial balance are essential to minimize the impact of constraints on the quality of service in general. We are working with all the players, not only to build this synergy, but also to restore the financial balance of the sector.
On several occasions, we have heard about the electricity sector development plan. Concretely, what role does Eneo play there?
Eneo’s ongoing transformation program is part of this plan, which is overseen by the supervisory authority. Eneo has made investments of 30 billion on average over the past five years, despite a particularly difficult socio-economic and financial context. Power supply has not yet reached the level desired by customers, but progress has been recorded, overall, both in terms of access to electricity, which has grown from 56 to around 65% in 5 years, as well as in the quality of service.
Furthermore, since 2014, we have laid all the foundations for this transformation with the consolidation of our ethical approach, rejuvenation of the workforce, empowerment and appointment of more women, a decentralized organization for closer proximity to customers, the use of new technologies to improve network quality, a new pole strategy and progressive modernization of facilities.
We have often heard that the Songloulou dam poses serious dangers. What is actually the situation?
The Songloulou dam is the main hydroelectric facility in Cameroon with an installed capacity of 384 megawatts. It is stable, according to the results of the latest appraisals carried out on the structure by specialized companies between 2018 and 2019. The dam fully assumes its function with an availability rate of 99% when it is not undergoing works and 91% when maintenance work is being conducted there. To further secure the structure and even give it new additional lifespan of 30 years, the dam has been under rehabilitation for 3 years following the commitments made by Eneo to the Government. The first phase of this rehabilitation project should be completed in 2020, if all the conditions are met.
What amount of investments have Eneo made in the past 5 years? And what are its plans?
On average, Eneo has committed around 30 billion annually for investments in generation facilities, transmission network (until 2018) and distribution network. This last segment accounts for more than half of these investments, which has reduced the outage period by 45% due to the condition of the distribution network.
The company remains fully committed to continue the process of its transformation, and above all to contribute effectively, alongside other players, to the achievement of the objectives set by the Government for the development of the electricity sector.
How can we understand that Eneo cannot pay its suppliers when its balance sheet shows a profit of more than 11 billion in 2018?
The balance sheet effectively shows a profit. But, this is an accounting result. Cash flow, meanwhile, remains very tight. This is a cash flow problem due to the outstanding payments accumulated mainly by some of our key customers.
We have heard that there will be layoffs. Is it true?
No, there will be no layoffs. We are going to take a very close look at our human resource management, and rather do a redeployment that takes into account the challenges of the company. We can cite, among other things including, rejuvenation of staff following many cases of retirement recorded, diversity, empowerment of women, etc.