UNLOCKING NIGERIA’S ENERGY TRANSITION POTENTIAL

Nigeria, with its vast energy resources, is at a crucial crossroads in its journey towards cleaner and more sustainable energy sources. In 2022, the nation launched its much-anticipated Energy Transition Plan, aiming to reduce emissions and harness the power of natural gas. However, despite decades of planning, only a mere $1 billion of the planned $80 billion has been committed to these transformative projects.

Civil society organizations, including the African Initiative for Transparency, Accountability, and Responsible Leadership, and the Natural Resource Governance Institute, came together in a policy dialogue in Abuja. Their message was clear: Nigeria declared the 2020s as the “Decade of Gas Expansion,” but progress has been slow, leaving many ambitious gas-to-power initiatives in limbo.

Of the numerous gas-to-power projects, valued at $80 billion, only $1 billion has been secured, with others stuck in the negotiation phase, facing formidable challenges. Complicating matters further are the escalating risks associated with these projects, from infrastructure lock-ins and stranded assets to profitability concerns and technical intricacies.

Given this intricate backdrop, there is a growing consensus that a shift in approach is needed. Rather than pursuing all 10 planned projects simultaneously, the focus should be on one or two profitable ventures to ensure a modicum of success. Potential funding avenues, including international development banks and innovative ideas like the African Energy Bank, are under consideration. It is also imperative to conduct thorough risk assessments to facilitate credit allocation for project funding.

Critically, the issue of gas financing needs to take center stage at COP 28, advocating for technologies that reduce the emissions footprint of natural gas. Additionally, stakeholders emphasize that clean cooking gas remains a viable strategy to boost domestic natural gas consumption, provided that clear guidelines for its use are established.

However, the challenges do not end there. The expansion of natural gas projects may conflict with the interests of local communities if not accompanied by sound environmental regulations. Nigeria is also grappling with a backlog in natural gas supply, largely composed of associated gas, further complicating efforts to expand its natural gas export capacities and meet domestic demand.

In conclusion, Nigeria’s Energy Transition Plan is an ambitious roadmap towards a more sustainable energy future. It represents not only a chance to address climate change and energy market volatility but also to harness the potential of its abundant natural gas resources. While the path is fraught with challenges, the collective efforts of various stakeholders and a strategic shift in approach can pave the way for a brighter and more sustainable energy landscape in Nigeria.