The Nigeria Sovereign Investment Authority (NSIA) has signed an agreement with a company in the Netherlands, Vitol, to establish a joint venture that will enable both firms invest in a range of carbon avoidance and removals projects.
The pact will enable both companies to invest in projects in Nigeria, partner local non-governmental organisations (NGOs) that were previously involved in related projects that contribute to the United Nations Sustainable Development Goals (SDGs).
A statement by the NSIA said both firms are expected to make an initial commitment of $50 million to the new venture, which is open to new investors as the partners develop the project’s pipeline.
The NSIA said the initiative will seek to mobilise voluntary market carbon capital from the partners and potential third parties in a small step towards a more equitable energy transition for Africa.
The statement quoted NSIA Managing Director and Chief Executive Officer Uche Orji as saying that the authority was committed to playing a leading role in advancing climate solutions that will lower Nigeria’s carbon emissions.
Orji expressed optimism that the NSIA’s partnership with Vitol would be essential to establishing and accelerating carbon reduction and avoidance in Nigeria.
The chief executive said this would be achieved by providing an enabling platform to trade carbon credits.
He added: “NSIA is committed to playing a leading role in advancing climate solutions that help to lower Nigeria’s carbon emissions as an integral part of its Environmental, Social, and Governance (ESG) strategy.
“NSIA expects that the partnership with Vitol will be key to establishing and accelerating carbon reduction and avoidance in Nigeria by providing an enabling platform to trade carbon credits, while channelling investments in sustainable projects to deliver emission-reduction results.
“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.”
Also, Vitol’s Head of Environmental Products Michael Curran said the company had been investing in high quality carbon mitigating projects globally for over 10 years.
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 SDGs.”
Nigeria, through the Nigerian National Petroleum Company (NNPC) Limited, is pursuing energy transition to promote economic growth and is gradually investing in gas to reduce carbon emissions while continuing to exploit hydrocarbon resources.