The Nigeria Sovereign Investment Authority (NSIA) says it has completed a joint venture (JV) agreement with Vitol to invest in a range of carbon avoidance and removal projects.
Vitol is a Swiss-based multinational energy and commodity trading company.
A statement from the investment authority, on Wednesday, said both parties are in the process of reaching a final decision on the first projects for the new venture, called CarbonVista.
NSIA said an initial $50 million has been committed, with a view to attracting new investors as the partners develop the project pipeline.
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The JV, NSIA said, will commence with projects in Nigeria, partnering with local firms with proven track records of successfully delivering high-quality projects.
It will also combine carbon offsetting with social outcomes that contribute to the attainment of UN sustainable development goals, the authority added.
“Investments will focus on various sectors including infrastructure, agriculture, and energy. This initiative will seek to mobilise 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,” NSIA said.
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“The JV’s first investment will be in a household energy efficiency programme including improved efficiency clean cooking and water filtration devices. Approximately 1 billion people in sub-Saharan Africa rely on wood and charcoal for daily cooking and water purification, a major cause of the nearly 4 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 whilst also saving communities money and time. The initial scope of the project is to deploy up to 200,000 devices each.”
NSIA added that the JV 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,” the institution said.
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Speaking on the JV partnership, Aminu Umar-Sadiq, managing director and chief executive officer (CEO), NSIA, said the realisation of Nigeria’s energy transition plan requires a radical rethink “of our energy consumption mix beginning from the micro-level”.
“Without incremental steps to address the fundamental issues, including water security and homestead energy access and consumption, achieving the ETP goals may remain unrealised and further exacerbate our climate risks,” he said.
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