Treasury Today Country Profiles in association with Citi

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Best Trade/Supply Chain Finance Solution Highly Commended: Energy of Cameroon SA (ENEO SA)

Photo of Geoffrey Gursel, Citi collects the award on behalf of Energy of Cameroon SA

Faced with funding essential nationwide power supply improvements, Eneo in Cameroon has deployed a solution that helps its suppliers and its own working capital positions so all can get on with the vital infrastructure work.

Photo of Geoffrey Gursel, Citi collects the award on behalf of Energy of Cameroon SA.

Brigitte Konso Epse Yanda

Treasurer

View biography

Douala, Cameroon

Energy of Cameroon (Eneo) is Cameroon’s electricity production and distribution company and a partially (44%) state-owned entity.

in partnership with

Eneo adopts supplier finance solution to help keep Cameroon’s lights on

The challenge

Since the takeover of Eneo by Actis in 2014, the company’s new management team has faced significant challenges. Most notably, the company struggled to find sufficient funding to invest in the improvement of Cameroon’s energy distribution infrastructure after the government imposed an electricity tariff cap which prevented Eneo rising prices to finance its projects.

In an effort to tackle this, Eneo looked internally, reviewing its working capital practices to see if it could internally fund these projects. However, Eneo found that its suppliers, many of whom are SME’s, were often unable to pay on time or accept longer payment terms because they struggled to access financing to support their working capital. The company was therefore stuck and left looking for a solution.

The solution

To resolve these challenges, Citi proposed a supply chain finance solution which would result in supply chain stability and lead to a timely resolution of the relevant projects that have critical and direct impact on the local electricity supply.

Through the implementation of the solution with Eneo, Citi brought an innovative solution to the market that enables both the bank and private companies to participate indirectly in the Government of Cameroon’s efforts to support the financial inclusion of small and medium-scale enterprises (SMEs) sector in line with International Monetary Fund (IMF) recommendations for Cameroon.

The IMF’s recommendations, as part of the ‘Extended Credit Facility Supported Programme’, aims to restore Cameroon’s fiscal and external sustainability and unlock job-rich, private sector-driven growth.

Best practice and innovation

Eneo, in collaboration with Citi, have implemented a truly innovative solution that has delivered a wide range of benefits. Indeed, apart from the immediate advantages of improved efficiency and cost savings for Eneo, this solution has helped facilitate access to credit for SMEs, at a very competitive rate and without any guarantee or insurance required, as the bank can rely on Eneo’s strong credit profile.

Today, suppliers can access early payment (reduction in trade cycle by circa 60-90 days) on their invoices with Eneo at one-fifth of the average rate prevailing for such client segments on the local market.

Citi has played a strong and active role in the implementation of this first-class solution, leveraging the power of its network and working side-by-side with Eneo on the on-boarding of suppliers located in different regions of Cameroon. The impact on the local economy is quite sizeable, as over 2,000 suppliers will benefit from this solution.

By dealing with the key challenges faced by local suppliers, the solution has improved Eneo’s relationships with these businesses and enhanced the company’s own efficiency. In addition, this solution supports the government’s programme to boost financial inclusion for SMEs and addresses structural obstacles to competitiveness and economic diversification.

This unique approach could be replicated in other sectors and countries where access to funding and financing is a challenge for SMEs and local businesses.

Key benefits

  • Eneo working capital improved by extending suppliers’ payment terms from 60 to 90 days.

  • Removed manual processing and streamlined the approval process, reducing payment delays to suppliers and increase governance and compliance with Eneo business principles.

  • Suppliers paid within 48 hours of the invoice being uploaded, compared to circa 90 days before.

  • Suppliers can track the status of their invoice directly.

  • Significant cost savings for both Eneo and suppliers.

  • Technology enhancement and operational efficiency achieved for all as the solution is 100% digital and fully integrated into Eneo’s ERP.

Best Trade/Supply Chain Finance Solution Overall Winner

Brake Parts Inc. LLC

Brake Parts Inc LLC

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Portrait of Brigitte Konso Epse Yanda

Brigitte Konso Epse Yanda

Treasurer

Brigitte Konso Epse Yanda has been Eneo’s Debt Compliance and Treasury Sub Director for the past two years. Her activities include daily cash, liquidity, and banking relationship management to ensure the company’s solvability. Brigitte joined Eneo in 2002 (AES-SONEL at that time). Prior to that, she held different roles in the company, totalling over ten years in international and local fundraising for investments and the company’s working capital.