NEWSLETTER MAY 20 – JUNE 02, 2013

According to some international media, the U.S. power giant, which owns 56% of AES-Sonel capital, would have already sold its shares.

The main article is found in the in the current Jeune Afrique issue.

In two pages, the international weekly journal, tries to shed light on the origins of this somewhat unexpected departure, given that its Cameroonian subsidiary had overcome the crisis it faced at the beginning of the concession in 2001. According to Jeune Afrique, the U.S. group is actively seeking to sell its 56% stake in AES-Sonel. "It's not easy to know exactly when the negotiations began around this highly strategic asset for the country's future, the various stakeholders in this process keep total silence," Nicolas Teisserenc, the editor of this article, wrote. The Bechir Ben Yahmed’s weekly journal staates, however, that in April 2013, the investment fund Actis, one of the potential buyers, hired several law firms for advice in the preparation of deeds of acquisition of the Cameroonian electricity operator.

The primary motive of this departure highlighted by Jeune Afrique is the "misunderstanding among its shareholders." The latter criticize the Arlington Group about the lack of clarity of its strategy. "AES is a very complex group present in 25 countries, which seeks to simplify its operation," a New York-based analyst said, quoted by the international weekly journal. The journal equally informs that since 2011, following the arrival of a new manager, AES has decided to leave five countries (China, France, Hungary, Czech Republic and Ukraine) and has sold more than 1 billion assets worldwide. "These are non-key assets generating insignificant margin, or those that do not make up a platform strong enough to ensure further development." The newspaper also revealed that in February, AES sold its Ukrainian subsidiary for USD 113 million, "a subsidiary whose incomes are roughly equivalent to those produced in Cameroon, but whose assets are ten times lower than those of AES-Sonel", meaning that the Cameroonian subsidiary of U.S. giant represents virtually nothing in its portfolio.

Buyers

Another analyst quoted by Jeune Afrique estimated at less than 1% the share of AES profits generated in Cameroon, which sales amount to USD 18.1 billion (more than XAF 9000 billion), three times Cameroon's budget, and employs 25,000 people. As far as buyers are concerned, three names have been put forward by Jeune Afrique. The first one is Actis, the British equity investment company, which controls the Azito power plant, the biggest one in Côte d'Ivoire, and other assets in Kenya and Tanzania. Then Finagestion, the former subsidiary of Bouygues acquired by the Panafrican investment funds Emerging capital partners (ECP), which owns the Ivorian Electricity Company (Compagnie ivoirienne d’électricité-CIE) and the Ivorian electricity generation Company (Compagnie ivoirienne de production d’électricité-CIPREL). Finally, the American firm Contour Global. But the weekly journal highlights that Contour Global has denied any involvement in the process.

The AES group currently has three entities in Cameroon. AES-Sonel, Kribi Power Development Company (KPDC) and Dibamba power development company (DPDC), all owned at the rate of 56% through holdings based in the Netherlands.

Jeune Afrique also points out the possibility for AES to sell its shares to three separate buyers. The American group may also want to leave because of the criticisms and other insults they are subject to in Cameroon, since their establishment, whether related to electricity or not. Even the huge investment made in Kribi failed to turn up Cameroonians’ opinion vis-à-vis the company. But this information is not confirmed by AES-Sonel, which has not ruled on the matter yet. All our attempts on Monday night to pull any reaction on this sensitive issue were unsuccessful. But we can already guess this must be a real blow. A blow on the side of employees and especially top management, mainly Jean David Bile, the CEO of AES-Sonel, who is the architect of all the success of this venture, after bitter failures of Mark Miller, Helen Tarnoy and more recently Brian Rich. The latter, during the signing of a partnership agreement with Société Générale des Banques au Cameroun (SGBC) on May 24, 2013, still welcomed AES-Sonel results over the last ten years: more than XAF 540 billion invested, with over 350,000 new families connected, an estimated production of 1,238 megawatts, an increase of 30% compared to the beginning of the decade.

Source: translated from the article “Energie électrique: Le groupe AES veut quitter le Cameroun ?”, La Nouvelle Expression

www.lanouvelleexpression.info

Herakles Farm accused of not telling the truth about his project in Cameroon

In a report titled "Oil palm in Cameroon: The double play of Herakles Farms" (« Huile de palme au Cameroun: Le double jeu d’Herakles Farms ») released on May 22, 2013, international non-governmental organizations Oakland Institute and Greenpeace accused the American group that owns investments in Cameroon and Ghana, of not telling the truth to investors, local communities and the Cameroonian authorities on its proposed oil palm development in the south-west area of the country.

"Nine false, misleading or inaccurate declarations were got from documents or communications of Herakles Farms on its proposed oil palm plantation in Cameroon," the report stated,, meanwhile NGOs did not explain how they are came into possession of some of the said documents.

The report quotes statements made ​​by company officials in some newspapers, articles in newsletters, but also internal mail to the company and statements from undisclosed sources.

On the basis of this report, the Centre for Environment and Development (CED), a local NGO in Cameroon, and Greenpeace join to say that the Cameroonian authorities must apply a moratorium on all concessions of the same nature as the one attributed to Herakles Farm in the country.

On May 18, 2013, the U.S. group said it was suspending its operations due to an injunction of the Cameroonian Ministry of Forestry, resulting in 700 permanent jobs being lost.

The Cameroonian Government discharged responsibility

Following the decision of the company Sithe Global Sustainable Oils Cameroon (SGSOC), the Cameroon subsidiary of the American group Herakles Farm, to suspend its plans for oil palm plantations in the South-West, Cameroon's minister in charge of Forestry, NGOLLE Philip Ngwesse, released a communiqué on May 23, 2013. In response to the information released by the U.S. firm officials that the Herakles Farm project was halted to comply with an "injunction" from the Ministry of Forestry which wanted to protect a nursery located near the project site, the Minister NGOLLE Ngwesse responded that "the signing of the agreement on September 17, 2009 did not exempt the company from compliance with all environmental procedures and constraints, including the removal of wood in the project area."

And the member of the Cameroonian government went further to clarify that "in light of complaints, including violations of forestry regulations and recurrent claims of local people, the Ministry of Forestry has just reminded the trader with the legal provisions on the subject."

From this point of view, Philip NGOLLE Ngwesse said, "the Ministry of Forestry cannot be held responsible for the suspension of the activities of the project, for the lifting of the suspension of slaughter is subject to the production of the declaration of public utility and the effective transfer of the domain to the beneficiary ".

Source: translated from the article “Herakles Farm accusé de n’avoir pas dit la vérité sur son projet au Cameroun”, Investir au Cameroun www.investiraucameroun.com

Cameroon and Europe bound by an agreement on cocoa

The outcome of the last Friday meeting that was held in Yaoundé between Cameroonian producers and European cocoa firms was the signature of a partnership agreement. More specifically, this document, signed by the Interprofessional Council of cocoa and coffee (CICC) and European cocoa firms, institutionalized between the two parties, the exchange of information and organization aiming at a brighter future for the cocoa industry. Thus, manufacturers are invited to join the farmers in the plantations.

But, according to Luc Magloire Mbarga Atangana, Minister of Commerce (MINCOMMERCE) who presided over the work, Cameroonians should not expect foreigners to improve the quality of their products, and even accelerate their transformation. "It was recognized that our cocoa is of good quality. There is certainly room for improvement, but the solution to our problems is endogenous. We must not wait for our buyers to come and act for us”, the Minister said. And these solutions are good agricultural post-harvest practices disseminated daily. The MINCOMMERCE also invites local processors to move to a higher stage, so that the country is no longer dependent on European industry, not always willing to sell us his best finished products.