NSIA, Vitol commit $50 million to partnership targeting carbon removal projects

The Nigerian Sovereign Investment Authority (NSIA) has entered into a joint venture pact with Swiss-based commodity trading company Vitol in a move to invest in a number of carbon avoidance and removal projects.

Both parties are close to making a final investment decision on the maiden projects to be launched via the partnership, the authority said in a statement.

The collaboration has committed $50 million in initial capital, hoping the push will draw additional investors.

The joint venture is targeting local projects for a start and aims to forge synergy with companies having a reputation for completing projects of top quality. Such projects must have accomplished carbon offsetting with social outcomes that help achieve United Nation’s Sustainable Development Goals.

Funding partners and voluntary carbon market are expected to contribute capital to back the push by the Nigerian Government for a fairer energy transition in Africa via the initiative.

Carbon-emitting fuels like wood and charcoal help about a billion Africans daily in cooking and water purification but that accounts for the deforestation of roughly four million hectares on the continent every year.

The statement noted that supplying rural households with efficient devices will help cut the use of wood fuel phenomenally as well as associated greenhouse emissions and household pollution.

NSIA’s partnership with Vitol will hopefully deploy 200,000 of such devices at its initial phase.

“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,” said NSIA CEO Aminu Umar-Sadiq.

“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.”

Michael Curran, who heads the Environmental Products unit at Vitol, said his organisation’s collaboration with NSIA, is aimed at scaling back GHG emissions, aligns with Vitol’s commitment to sub-Saharan Africa.

Vitol expects the JV to be a spur for the establishment of the local emission trading scheme, a pioneer in the Africa Carbon Market Initiative.

“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,” Mr Curran said.