The politics of rebuilding SONARA.

 Initially, the refurbishing cost was pegged at 250 billion FCFA. But today, it has been ballooned to 700 billion FCFA.

Unable to foot the bill, the government has launched an international “market sounding,” which is an exploratory and pre-transaction communication, used to gauge investors or supplier interest before a major deal is officially announced.

For two days, the Minister of Finance, Louis Paul Motaze, held a meeting at the Hilton Hotel, Yaounde, with some 67 officials of financial institutions, investment banks, oil companies, engineering firms, and technical partners; with the goal to preparing for the revival of SONARA, through an innovative public-private partnership.

Under the revised plan, Yaounde intends to build a hydrocracker unit that would allow SONARA to process crude oil produced in Cameroon. 

The project also includes upgrades to storage facilities and an increase in refining capacity, from 2.1 million tons to at least 3.5 million tons a year.

The international consultation is said to have allowed for gauging market interest, assessing project financing conditions, and gathering recommendations from potential partners to build a robust, bankable, and attractive project.

The project includes the rehabilitation and reconstruction of the damaged units, the modernisation of strategic facilities, notably the Hydrocracker unit.

It will be developed using a Public-Private Partnership of Design-Build-Finance-Maintain model, encompassing design, construction, financing, and maintenance.

According to the Ministry of Finance, the project will be developed as a Public-Private Partnership, PPP, under a Design-Build-Finance-Maintain, DBFM model. 

Under the arrangement, the private partner will be responsible for designing, building, financing, and maintaining the upgraded refinery.

Unlike the Build-Operate-Transfer, BOT, contracts that Cameroon has used for several infrastructure projects in recent years, the DBFM model leaves SONARA at the centre of the project. 

The Ministry of Finance said the State-owned refinery will retain ownership of all the facilities and remain responsible for day-to-day operations throughout the life of the contract.

According to Minister Motaze, the market sounding exercise is intended to get feedback on the project's technical, financial, legal, and contractual framework before government can take a final decision.

The minister further explained that beyond the refinery's reconstruction, the project will: restore national refining capacity, reduce dependence on petroleum product imports, strengthen energy security and sovereignty, improve trade balance, support industrialisation and economic resilience of Cameroon.

According to the minister, “with the conclusion of this Market Sounding, Cameroon enters a new phase: mobilising the expertise and investments necessary to make SONARA a sustainable driver of national economic transformation”.

It is now left for the government to launch a call for expressions of interest, shortlist bidders, hold discussions with selected candidates, and then choose the private partner that will deliver the project in “the coming days”.

Some experts, however, have raised reservations. The planned refining capacity, set at 3.5 million metric tons per year, was deemed insufficient by oil traders at the meeting, who argued that international standards place the break-even point at 5 million tons.

In its current configuration, the project would not be economically viable, at least not for the lenders. Investors said it wouldn't be profitable at this scale.

A second major reservation is the six-month timeframe for securing financing after contract signing was considered unrealistic. 

Participants estimated that the timeframe should be between 12 and 24 months with eighteen months being the most likely scenario, given the involvement of development finance institutions.

Without a grace period during the construction phase, the interim interest payments over 36 months would represent a considerable sum, described as "difficult to reconcile" with the project's requirements.

From a technical standpoint, some experts recommended an independent assessment before any final commitment, believing that the majority of equipment directly affected by the 2019 disaster should be replaced, not reused.

Other concerns raised included strengthening of the legal framework for guarantees, and the hedging of exchange rate risk, a significant portion of which revenues will be denominated in CFA francs.

Questions popping up are: Will the financing be backed by sovereign guarantees? Will future payments come from SONARA's revenues or the State budget?

How long will the contract run? And what revenue streams will be used to cover the long-term maintenance costs of such a large industrial facility?

But why did the government start another refinery project in Kribi, due to begin production this year, instead of first repairing the one in Limbe?

What is the assurance that 700 billion FCFA will be raised to get it operational on PPP terms, even in the “coming months”?

In a country were delays and abandon projects are the norms, and promised projects a dream, it doesn't require rolling a crystal ball to know the answer. 

This article was first published in The Guardian Post Edition No:3835 of Thursday July 02, 2026