The Nigeria Sovereign Investment Authority has entered into an agreement with Vitol to establish a joint venture that will enable both firms invest in a range of high integrity, socially impactful, carbon avoidance and removals projects.
The deal was confirmed in a statement issued by NSIA.
Based on the agreement, NSIA and Vitol are expected to make an initial commitment of $50m to this new venture.
The pact will enable both companies to invest exclusively in projects in Nigeria, partnering with local NGOs which have a proven track record of successfully delivering high-quality projects that combine carbon offsetting with social benefits that contribute to the United Nations Sustainable Development Goals.
The NSIA said in the statement that the new venture is open to new investors as the partners develop the project pipeline.
The initiative, the statement noted, will seek to mobilize voluntary market carbon capital from the partners and potential third parties in a small step toward a more equitable energy transition for Africa.
The Managing Director and Chief Executive Officer, NSIA, Mr Uche Orji was quoted in the statement to have said that the Authority is committed to playing a leading role in advancing climate solutions that will lower Nigeria’s carbon emissions.
The energy industry is currently facing increasing demands to reducing greenhouse gas emissions so as to achieve the goals and commitments of Paris Accord and COP 26.
Nigeria through the Nigerian National Petroluem Company Ltd is pursuing energy transition in order to promote economic growth and is gradually investing in gas so as to reduce carbon emissions while continuing to exploit hydrocarbon resources.
Currently, natural gas is the energy transition fuel for Nigeria.
During the COP 26 summit in Glasgow, President Muhammadu Buhari had pledged that Nigeria would cut its carbon emissions and reach net-zero by 2060, underlining the key role of gas in the country’s energy transition roadmap.
While nations such as the United Kingdom, the United States, and the European Union have set targets to achieve net-zero by 2050, Nigeria has opted to join Saudi Arabia and Russia in planning to reach net-zero by 2060.
But speaking on the partnership, Orji expressed optimism that the NSIA’s partnership with Vitol will be key to establishing and accelerating carbon reduction and avoidance in Nigeria.
This, he stated, is expected to be achieved by providing an enabling platform to trade carbon credits.
He said, “NSIA is committed to playing a leading role in advancing Climate Solutions that help to lower Nigeria’s carbon emission as an integral part of its ESG strategy.
“We are therefore very pleased to be working with Vitol to channel our investments in sustainable projects to deliver emission-reduction results as well as significant socio-economic outcomes that will be of benefit to Nigerians.”
The NSIA is an investment institution of the Federation set up to manage funds in excess of budgeted hydrocarbon revenues.
Its mission is to play a leading role in driving sustained economic development for the benefit of all Nigerians through building a savings base for the Nigerian people, enhancing the development of Nigeria’s infrastructure, and providing stabilization support in times of economic stress.
The Authority is empowered to receive, manage, and invest funds in a diversified portfolio of medium and long-term assets on behalf of all three tiers of government including the Federal Capital Territory, in preparation for the eventual depletion of Nigeria’s hydrocarbon resources.
Also speaking, the Head of Environmental Products, Vitol, Michael Curran, said in the statement that the company has been investing in high-quality carbon mitigating projects globally for over ten years.
He said the company is delighted to be partnering with the NSIA to support Nigeria’s efforts to reduce greenhouse gas emissions through projects that address critical environmental and climate threats.
He said, “Vitol has been investing in high-quality carbon mitigating projects globally for over a decade, with a recent focus on sub-Saharan Africa.
“We are delighted to be partnering with NSIA to support Nigeria’s national efforts to reduce greenhouse gas emissions through projects that address critical environmental and climate threats.
He said, “Vitol has been investing in high-quality carbon mitigating projects globally for over a decade, with a recent focus on sub-Saharan Africa.
“We are delighted to be partnering with NSIA to support Nigeria’s national efforts to reduce greenhouse gas emissions through projects that address critical environmental and climate threats.
“The projects will have a clear focus on delivering social benefits, alongside the highest standards of carbon offsetting.
“Used appropriately as part of a comprehensive corporate energy transition strategy, offsetting will play a key role in meeting the Paris Climate Agreement objectives and contribute toward the UN Sustainable Development Goals.”
Vitol is a leader in the energy sector with a presence across the spectrum from oil through to power, renewables and carbon.
It trades 7.6 million barrels per day of crude oil and products, and charters circa 6,200 ship voyages every year.
Vitol’s clients include national oil companies, multinationals, leading industrial companies and utilities.
Founded in Rotterdam in 1966, today Vitol serves clients from some 40 offices worldwide and is invested in energy assets globally including: 16 m m3 of storage globally, 500 k b/d of refining capacity, over 6,800 service stations and a growing portfolio of transitional and renewable energy assets. The company’s revenues in 2021 were $279bn.
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