Nigeria requires $500b to achieve net-zero goal, secures $16b commitments

Nigeria will require approximately $500 billion in additional financing beyond business-as-usual (BAU) investments to achieve a net-zero emission target by 2060.

The Nigeria Energy Transition Office disclosed this during a webinar, noting that the funding would be essential to decarbonising the power sector and providing sustainable energy solutions across key sectors, including industry, transport and clean cooking.

A member of the Nigeria Energy Transition Office, Somkele Awa-Kalu emphasised that significant progress has been made toward achieving the initial objectives of the Energy Transition Plan (ETP). To date, he said that $16.1 billion in funding commitments have been made towards implementing the transition plan.

The commitments came from a diverse group of investors, including oil and gas companies, private equity firms, local and international development finance institutions (DFIs), energy companies and grant-giving foundations.

Awa-Kalu stressed that the ETP has secured at least $10 billion financing commitment at COP27 to kickstart the implementation of Nigeria’s ETP, noting that the target is based on an estimated cost of $10 billion per annum to implement the plan.

“Significant progress has been made in advancing local manufacturing and assembly in Nigeria, with OEMs increasingly setting up assembly lines for critical net-zero technologies such as solar PV, electric mobility and battery manufacturing. This drive is bolstered by Nigeria’s lithium reserves, which present opportunities for developing a robust local supply chain for energy storage solutions.

“These efforts align with the broader goals of fostering innovation and building domestic capacity to support the country’s energy transition,” he said.

He said the country plays a leadership role in Africa promoting a fair, inclusive and equitable energy transition that includes gas as transitionary fuel, ending energy poverty and industrialisation.

He said significant investment is expected in both grid and off-grid generation technologies within the power sector, with a focus on integrating renewables into the grid and experimenting with off-grid solutions.

He stressed the importance of investing in grid extensions and upgrades, emphasizing that the success of this transition depends on incorporating renewables into the grid and extending it to areas that are currently unserved or underserved.

“Investments are also needed in the industry side on clean high and low-temperature heating processes, especially In steel and cement industries the clean cooking side is really about investments in clean cookstoves and the technology to support that cook stoves even in terms of backward integration and ensuring that in the long-term sustainability, we can manufacture some of these clean cookstoves in the country or at least in the continent,” he said.

He further noted that three to five agreements have been secured with original equipment manufacturers (OEMs) to start local manufacturing and assembly of essential technologies, including electric vehicles and decentralized solar systems, in Nigeria by 2025.

He also noted that Nigeria has strengthened its leadership in Africa’s energy transition by implementing the Nigeria Gas Flare Commercialisation Programme (NGFCP), aimed at converting and utilising flared gas.

Communication Specialist at the Nigeria ETO, Ibilola Essien, explained that in some countries, fossil fuels are deeply integrated into people’s lives while many have recognised that an immediate halt would negatively impact economic growth and development.