The Nigeria Sovereign Investment Authority, Nigeria’s sovereign wealth fund, and Vitol have completed a joint venture (“JV”) agreement to invest in a range of carbon avoidance and removals projects and are in the process of reaching a final investment decision on the first projects.
An initial US$50 million has been committed, with a view in attracting new investors as the partners develop the project pipeline. The JV will commence with projects in Nigeria, partnering with local firms with proven track records of successfully delivering high-quality projects, combining carbon offsetting with social outcomes that contribute to the attainment of UN Sustainable Development Goals. Investments will focus on various sectors including infrastructure, agriculture, and energy. This initiative will seek to mobilize capital from funding partners to the voluntary carbon market in support of the effort of the Nigerian government toward a more equitable energy transition for Africa.
The JV’s first investment will be in a household energy efficiency programme including improved efficiency clean cooking and water filtration devices. Approximately 1 billion people in sub-Saharan Africa rely on wood and charcoal for daily cooking and water purification, a major cause of the nearly 4 million hectares of annual deforestation and degradation across the continent. Providing rural households with efficient household devices significantly reduces wood fuel consumption and related greenhouse gas emissions and household air pollution whilst also saving communities money and time. The initial scope of the project is to deploy up to 200,000 devices of each.
“The realization of Nigeria’s Energy Transition Plan requires a radical rethink of our energy consumption mix beginning from the micro-level. Without incremental steps to address the fundamental issues, including water security and homestead energy access and consumption, achieving the ETP goals may remain unrealized and further exacerbate our climate risks. Carbon Vista adopts a pragmatic approach to these challenges. We are pleased to be leading this novel path for delivering Nigeria’s net-zero targets,” Aminu Umar-Sadiq, Managing Director, and Chief Executive Officer, NSIA said.
“Our partnership with NSIA, in support of Nigeria’s efforts to cut GHG emissions, aligns with Vitol’s commitment to sub-Saharan Africa. The projects delivered through the JV will focus on ensuring social benefits alongside the highest carbon offsetting standards. We have invested in high-quality carbon-mitigating projects globally for over a decade, addressing critical environmental and climate threats.
“This joint venture should be a catalyst in the creation of the domestic emissions trading scheme, a pioneer in the Africa Carbon Market Initiative (ACMI) and will create a pipeline of high-quality credits into the global voluntary carbon markets. “When combined with 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,” Michael Curran, Head of Environmental Products, Vitol said.
