The Nigeria Sovereign Investment Authority (NSIA) has entered into an agreement with Vitol to establish a joint venture that will enable both firms invest in a range of carbon avoidance and removals projects.

The pact will enable both companies to invest in projects in Nigeria, partnering with local non-governmental organisations (NGOs) that have previously got involved in related projects that contribute to the United Nations Sustainable Development Goals.

According to a statement by NSIA, both firms are expected to make an initial commitment of $50 million to this new venture.

The new venture is open to new investors as the partners develop the project pipeline, it said.

NSIA said the initiative will seek to mobilise voluntary market carbon capital from the partners and potential third parties in a small step toward a more equitable energy transition for Africa.

The statement quoted the Managing Director and Chief Executive Officer, NSIA, Mr. Uche Orji, as saying that the Authority was committed to playing a leading role in advancing climate solutions that will lower Nigeria’s carbon emissions.

Orji expressed optimism that the NSIA’s partnership with Vitol will be key to establishing and accelerating carbon reduction and avoidance in Nigeria. He said this will be achieved by providing an enabling platform to trade carbon credits.

He said, “NSIA is committed to playing a leading role in advancing climate solutions that help to lower Nigeria’s carbon emission as an integral part of its ESG strategy.

“NSIA expects that the partnership with Vitol will be key to establishing and accelerating carbon reduction and avoidance in Nigeria by providing an enabling platform to trade carbon credits, while channelling investments in sustainable projects to deliver emission-reduction results.

“We are therefore very pleased to be working with Vitol to channel our investments in sustainable projects to deliver emission-reduction results as well as significant socio-economic outcomes that will be of benefit to Nigerians.”

Also speaking, the Head of Environmental Products, Vitol, Michael Curran, said the company had been investing in high-quality carbon mitigating projects globally for over 10 years.

He said the company was delighted to be partnering with the NSIA to support Nigeria’s efforts to reduce greenhouse gas emissions through projects that address critical environmental and climate threats.

Curran said: “Vitol has been investing in high-quality carbon mitigating projects globally for over a decade, with a recent focus on sub-Saharan Africa. “

We are delighted to be partnering with NSIA to support Nigeria’s national efforts to reduce greenhouse gas emissions through projects that address critical environmental and climate threats.

“The projects will have a clear focus on delivering social benefits, alongside the highest standards of carbon offsetting.

“Used appropriately as part of 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.”

Nigeria, through the Nigerian National Petroleum Company Ltd, is pursuing energy transition in order to promote economic growth and is gradually investing in gas so as to reduce carbon emissions while continuing to exploit hydrocarbon resources.

Currently, natural gas is the energy transition fuel for Nigeria, with the energy industry facing increasing demands to reducing greenhouse gas emissions so as to achieve the goals and commitments of Paris Accord and COP 26.

During the COP 26 summit in Glasgow, President Muhammadu Buhari pledged that Nigeria would cut its carbon emissions and reach net-zero by 2060, underlining the key role of gas in the country’s energy transition roadmap.

While nations such as the United Kingdom, the United States, and the European Union have set targets to achieve net-zero by 2050, Nigeria has opted to join Saudi Arabia and Russia in planning to reach net-zero by 2060.

The NSIA is Nigeria’s investment institution set up to manage funds in excess of budgeted hydrocarbon revenues.

With mission to play a leading role in driving sustained economic development for the benefit of all Nigerians through building a savings base for the Nigerian people, enhancing the development of Nigeria’s infrastructure, and providing stabilisation support in times of economic stress, the NSIA is empowered to receive, manage, and invest funds in a diversified portfolio of medium and long-term assets on behalf of all three tiers of government including the Federal Capital Territory (FCT).

Vitol is a leader in the energy sector with a presence across the spectrum from oil through to power, renewables and carbon.

The company trades 7.6 million barrels per day of crude oil and products, and charters circa 6,200 ship voyages every year.