NSIA, Vitol Seal JV Agreement for Carbon Emissions Reduction Projects
•$50 million initial investment committed
Emmanuel Addeh in Abuja
The Nigeria Sovereign Investment Authority (NSIA), which oversees Nigeria’s Sovereign Wealth Fund and Vitol have signed a joint venture agreement to invest in projects that would significantly reduce carbon emissions in the country.
It was learnt that an initial $50 million had been committed to the plan, with a view to attracting new investors as the partners develop the project pipeline.
The JV was expected to commence with projects in Nigeria in partnership with local firms with proven track records of successfully delivering high-quality projects, combining carbon offsetting with social outcomes.
In addition, it was meant to contribute to the attainment of UN Sustainable Development Goals, with major focus on infrastructure, agriculture and energy.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, in her comments, said that the joint venture was important, while expressing happiness over the prospects of a domestic carbon market in Nigeria.
She stated that the NSIA’s unwavering commitment to promoting sustainable development in Nigeria was evident through its extensive portfolio of successful projects.
According to her, CarbonVista, a platform for developing quality projects and attracting third-party capital, represents yet another milestone in NSIA’s mission to build critical infrastructure and create investment opportunities that drive economic growth and development in Nigeria.
“I am particularly pleased that this initiative is a Joint Venture between two important players in their respective fields, targeting one common goal: to invest an initial $50 million towards developing sustainability-driven projects in Nigeria.
“This venture is expected to attract additional capital and leverage the large pool of ESG resources to create new businesses and develop the voluntary carbon market in Nigeria. It clearly demonstrates the power of partnerships in driving positive change toward sustainable development.
“As the supervising minister of this institution, NSIA’s great strides continue to represent critical building blocks in support of our aspirations for the Ministry of Finance, Budget, and National planning and the country.
“More fundamentally, I am pleased with the prospects of a domestic carbon market in Nigeria and its opportunities for sustainable investment and economic growth,” she noted.
The finance minister stated further that a thriving carbon market can create new opportunities for businesses and investors while driving the country’s transition towards a low-carbon economy.
Ahmed pointed out that the government will continue to support the venture as it seeks to place Nigeria at the forefront of tackling climate change while achieving sustainable social and economic outcomes.
“We recognise that climate change is a global challenge that requires collective action, and we are committed to playing our part in the global effort to address this challenge.
“Through initiatives like CarbonVista, we are creating an enabling environment for sustainable investment in Nigeria, contributing to the country’s economic development while protecting our environment for future generations,” she concluded.
The Chief Executive Officer, NSIA, Aminu Umar-Sadiq, explained that given the NSIA’s mandate as the custodian of economic resources for the next generation of Nigerians, tackling climate risks that have adverse effects on the environment was core to the objectives of the organisation.
According to him, the NSIA sustainability objectives go beyond seeking out profitable investments that incorporate climate solutions, to mitigating activities that could have adverse impact on the wellbeing of the next generation.
He stated that the NSIA acknowledges the significant resources required to undertake green projects that deliver appreciable social impact and has therefore partnered with Vitol to set up ‘CarbonVista’ as a platform for developing quality projects.
Over the next few months, he said the NSIA would roll out projects to set the standard environment-friendly investments in Nigeria.
These projects, he added, would be carefully selected, partnering with local institutions that have proven track records of successfully delivering high-quality projects.
Umar-Sadiq said the NSIA expects the partnership to grow into a platform that pushes the carbon trading market, encourages green project development, and attracts significant third-party capital into the ESG space in Nigeria.
“The unique challenges posed by climate change calls for deliberate and strategic action at all levels. At the NSIA, we developed a 3-prong strategy for delivering our ESG and climate finance objectives.
“One of the thrusts of this approach involves building partnerships with like-minded institutions to support Nigeria’s overall goal of achieving net-zero emissions by 2060.
“Against this backdrop, we are partnering with Vitol, a leader in the energy sector with a global presence, to establish CarbonVista, a carbon avoidance and removal entity, to support the delivery of a clean energy future for Nigeria and indeed the continent,” he stressed.
CarbonVista, he said, adopts a pragmatic approach to the challenges, expressing his pleasure to be leading the novel path for delivering Nigeria’s net-zero targets.
The Head of Environmental Products, Vitol, Michael Curran, in his remarks, noted that the partnership with NSIA was in support of Nigeria’s efforts to cut greenhouse emissions, explaining that it 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,” he noted.
The JV’s first investment will be in a household energy efficiency programme including improved efficiency, clean cooking and water filtration devices.
