The Federal Government is stepping up efforts to attract private and multilateral capital into its gas sector, as officials warn that the country faces an estimated 10-year $200 billion infrastructure investment shortfall.

Speaking on a panel at the West African Refined Fuels Market (WARFM) Conference in Abuja, Executive Secretary of the Midstream and Downstream Gas Infrastructure Fund (MDGIF), Oluwole Adama, said Nigeria’s proven gas reserves, put at more than 200 trillion cubic feet, with some estimates reaching 600 trillion, remained hugely underexploited relative to their potential to power economic growth.

MDGIF was established under the Petroleum Industry Act 2021 to de-risk investment in gas infrastructure, a sector Adama described as highly capital-intensive and largely unattractive to commercial lenders.

Adama called for “patient capital” to make otherwise unbankable projects viable for private investors.

Since its board was constituted, Adama said the Fund has reached final investment decisions on 31 projects and supported the construction of more than 200 pieces of infrastructure over the past 18 months, 10 of which have already been commissioned.

He said six to eight gas processing plants, along with dozens of associated facilities, were expected to come on stream between October and December this year.

Citing a study, Adama put Nigeria’s gas infrastructure financing gap at around $20 billion yearly, which needs to be sustained over 10 years.

He argued that every naira MDGIF invested could trigger roughly three naira in additional private capital, a multiplier effect the fund is relying on to close the gap.

On international financing, Adama pointed to a syndication arrangement of up to $500 million agreed with partners at an African finance conference last August, under which two projects have already secured funding and three more are in the pipeline.

He said a central challenge in attracting foreign capital was that international investors are often unable to properly assess the equity risk of Nigerian gas projects before committing funds, a gap MDGIF’s de-risking model is designed to close.

A representative of a global credit ratings agency told the panel that, according to data on infrastructure defaults compiled by multilateral lenders, African infrastructure projects have historically recorded lower credit losses than comparable emerging-market projects, a finding she said should help to reshape investors’ perception of risk on the continent.

Executive Director of Finance and Accounts at the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Abiodun Adeniji, said the planned African Energy Bank, expected to launch before the end of the year, would offer financing at rates closer to those available in mature markets such as Norway, the United States and the United Kingdom, in contrast to the double-digit rates charged by Nigerian commercial banks.

He noted that adequate funding for MDGIF was central to enabling greater equity participation in the sector.

Adeniji also flagged non-financial risks that continue to slow project delivery, including currency volatility, foreign exchange constraints and delays caused by community relations issues around project sites, factors they said investors needed to weigh alongside the cost of capital.