The Nigeria Sovereign Investment Authority (NSlA), managers of Nigeria’s Sovereign Wealth Fund, and Vitol have sealed a joint venture agreement to invest in a range of carbon avoidance and removal projects.
Already, they are in the process of reaching a final investment decision on the first projects with an initial $50 million committed with a view to attracting new investors as the partners develop the project pipeline.
The Managing Director/CEO of NSIA, Mr Aminu Umar-Sadiq, said NSIA is committed to tackling climate risks that have adversely affected the environment as the custodian of economic resources for the next generation of Nigerians.
He said the NSIA sustainability objectives go beyond seeking out profitable investments that incorporate climate solutions, but more pressingly to mitigate activities that could have adverse impact on the well-being of the next generation.
Umar-Sadiq said JV will commence with projects in Nigeria, partnering 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. Its investments will focus on various sectors including infrastructure, agriculture, and energy.
The initiative seeks to mobilize capital from funding partners to the voluntary carbon market in support of the effort of the Nigerian government toward a more equitable energy transition for Africa.
The JV’s first investment will be in a household energy efficiency program including improved efficiency, clean cooking and water filtration devices as statistics show that approximately one billion people in sub-Saharan Africa rely on wood and charcoal for daily cooking and water purification.
This has caused nearly four million hectares of annual deforestation and degradation across the continent.
Providing rural households with efficient household devices significantly reduces wood fuel consumption and related greenhouse gas emissions and household air pollution while also saving communities money and time. The initial scope of the project is to deploy up to 200,000 devices of each, a statement by NSIA and given to Persecondnews said.
Towards achieving the objective, the NSIA boss said the Authority had implemented a three-fold sustainability strategy that firstly addressed sustainability at an institutional level, and also embedded ESG practices in its investment process while advancing climate solutions that help to lower Nigeria’s carbon footprint.
He said partnerships were being built with other institutions to support the initiative.
On the goal of achieving net-zero emissions by 2060, Umar-Sadiq explained that significant resources were required to undertake green projects that deliver appreciable social impact and have partnered with Vitol to set up CarbonVista as a platform for developing quality projects and attracting third-party capital.
According to him, NSIA will over the next few months roll out projects to set the standard for ESG investment in Nigeria with the projects being carefully selected also partnering with local institutions that have proven track records of successfully delivering high-quality projects.
Umar-Sadiq said:: “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.”
“CarbonVista adopts a pragmatic approach to these challenges. We are pleased to be leading this novel path for delivering Nigeria’s net-zero targets.”
Also speaking, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, commended NSIA’s unwavering commitment to promoting sustainable development in Nigeria is evident through its extensive portfolio of successful projects.
According to her, CarbonVista represents yet another milestone in NSIA’s mission to build critical infrastructure and create investment opportunities that drive economic growth and development in Nigeria.
She said: “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.”
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.
“With this in mind, CarbonVista must work closely with the National Council on Climate Change (NCCC) to develop the domestic carbon market. We must also collaborate with strategic partners such as Sustainable Energy for All (SEForAll) and Africa Carbon Markets Initiative (ACMI) to achieve our goals.
“By working together, we can create a sustainable future for Nigeria, where economic growth is achieved in harmony with environmental and social sustainability,” she added.
The Minister assured that the Federal Government remains committed to fostering a resilient net-zero economy developed by dedicated partners like NSIA and Vitol.
“The government will continue to support this venture as it seeks to place Nigeria at the forefront of tackling climate change while achieving sustainable social and economic outcomes.
“We recognize 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.
Michael Curran, the Head of Environmental Products, Vitol said: “Our partnership with NSIA, in support of Nigeria’s efforts to cut GHG emissions, 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.”