- The Nigerian Sovereign Investment Authority (NSIA) plans to expand its existing $50 million carbon credits program in collaboration with Vitol SA, aiming to increase its scale tenfold.
- The programme intends to sell the credits to a unit of Saudi Arabia’s sovereign wealth fund, showcasing NSIA’s recognition as a key player in driving climate-conscious initiatives.
- NSIA CEO also revealed plans to invest $100 million in an ammonia plant with Morocco’s OCP SA in southern Nigeria, with a total project cost of up to $1.6 billion.
The Nigerian Sovereign Investment Authority (NSIA) has announced its plans to enhance its existing $50 million carbon credits programme in collaboration with Swiss energy firm Vitol SA.
Under the new arrangement, NSIA envisions a remarkable expansion potential for the programme, aiming to increase its scale tenfold. Aminu Umar Sadiq, the Chief Executive Officer of NSIA, told Bloomberg that the programme’s portfolio could potentially expand to encompass half a million, although NSIA intends to assess the performance of the current $50 million program before proceeding with such significant growth.
More details about the NSIA programme
The program intends to sell the credits to a unit of Saudi Arabia’s sovereign wealth fund. Simultaneously, NSIA has been invited to take the lead in the climate and sustainability working group for the African Sovereign Investors Forum, underscoring the organization’s recognition as a key player in driving climate-conscious initiatives and promoting sustainable practices.
The backstory
In April 2023, NSIA and Vitol SA completed a joint venture agreement to invest in a range of carbon avoidance and removals projects through the CarbonVista programme. An initial $50 million (NSIA; $20 million, Vitol SA; $30 million) was committed, to attract new investors as the partners develop the project pipeline.
The JV initially planned to partner 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.
According to the NSIA announcement in April 2023, the JV’s first investment will be in a household energy efficiency program including improved efficiency of clean cooking and water filtration devices.
The plan
CarbonVista intends to focus on efficient wood stoves, water purification, and re-afforestation projects to earn credit. African countries from Zimbabwe and Malawi to Gabon and Kenya are seeking to benefit more from the production of the offsets.
Each carbon credit represents a ton of climate-warming carbon dioxide, or its equivalent removed from the atmosphere or prevented from entering it in the first place.
The JV also plans to get a clean-cooking project by Q3 2023, which will use more efficient wood stoves than those currently used to reduce deforestation, underway.
In the meantime, an agreement is being negotiated with a stove manufacturer that will set up a plant in Kano state and CarbonVista may take a stake in the company to guarantee offtake. Meanwhile, water purification and re-afforestation of plants will take place later.
Under the programme, CarbonVista will sell the carbon credits it produces to the Regional Voluntary Carbon Market Co., a unit of Saudi Arabia’s Public Investment Fund, and other buyers may need to be found in the future.
What you should know
NSIA CEO also disclosed that the organisation is investing $100 million in an ammonia plant with Morocco’s OCP SA to develop a facility in Ikot Abasi in southern Nigeria that could cost as much as $1.6 billion. OCP will contribute about $200 million, and the rest will need to be raised in the form of equity and debt.