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New Caledonia: The French government steps in with €14.2 million to stabilize Enercal

The French government has granted an advance of 14.2 million euros to Enercal, New Caledonia's electricity system operator, to ensure continuity of electricity supply and offset its chronic deficit.

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Congress of New Caledonia

New Caledonia is facing a major energy crisis.
Enercal, the archipelago’s main power system operator, is accumulating a chronic deficit that threatens the stability of the electricity supply.
In response to this emergency, the French government is granting Enercal a “repayable advance” of 1.7 billion Pacific francs (14.2 million euros).
This financial aid is intended to enable the company to continue operating over the coming months, while reforms are implemented to ensure its long-term viability.
According to a recent report by the local government, as of June 30, Enercal had a deficit of 18.9 billion Pacific francs (150 million euros).
This worrying financial situation has prompted the French government to intervene to prevent any disruption to the electricity supply in New Caledonia.

Comprehensive government support measures

The exceptional aid granted to Enercal is part of an overall package of 300 million euros intended to support local authorities and companies not linked to the nickel sector.
New Caledonia was recently rocked by riots that severely affected the local economic fabric, resulting in destruction estimated at 2.2 billion euros.
Overall support includes measures such as partial activity, the State Solidarity Fund, state-guaranteed loans, as well as funding for local authorities, health, social security and energy systems.
These measures are designed to stabilize the local economy and restore the confidence of investors and residents alike.

Recovery Plan and Tariff Reforms

To ensure Enercal’s future viability, the collegiate government of New Caledonia is proposing a phased increase in the kilowatt-hour selling price between October 2024 and September 2026.
This draft resolution, currently being examined by the New Caledonian Congress, also provides for the government to assume responsibility for Enercal’s deficits during this transition period, and to pay off the company’s debt between 2026 and 2029.
This tariff reform is essential to restore Enercal’s finances and guarantee a stable, sustainable supply of electricity to the entire Caledonian population.
The measure is accompanied by internal restructuring plans aimed at improving the company’s operational efficiency and reducing costs.

Riot Impact and Recovery Strategies

The riots, which broke out in May 2024 in response to a proposed reform of the electoral body, caused significant damage, both in terms of human lives and material destruction.
Ten people, including two gendarmes, lost their lives, and the resulting economic disruption amplified the ongoing energy crisis.
The New Caledonian government estimates the cost of the riots at around 2.2 billion euros, a figure that underlines the seriousness of the economic situation.
The State’s response, combined with local measures, is aimed at redressing the economy and preventing future instability.
The joint efforts of local and national authorities are crucial to restoring order and supporting the island’s economic recovery.
Support for Enercal and the associated reforms represent a critical step in stabilizing New Caledonia’s energy sector.
By strengthening the energy infrastructure and ensuring more rigorous financial management, the authorities hope not only to restore the supply of electricity, but also to lay the foundations for sustainable economic growth in the archipelago.

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