CNG, Electric Vehicles Attract $700m Investment – FG
The Federal Government has said that about $700m in investment was made in Compressed Natural Gas and electric vehicles last year.
The Special Adviser on Energy to President Bola Tinubu, Olu Verheijen, said this was made possible by the various incentives announced by the President to support investments in electric mobility and midstream and downstream infrastructure to increase the penetration of Liquefied Petroleum Gas, Compressed Natural Gas, and mini-Liquefied Natural Gas.
In a report, Verheijen expressed satisfaction, saying Tinubu’s energy sector reforms are prompting oil companies to take a second look at Nigeria.
According to her, Tinubu’s vision is to ensure Nigeria has abundant energy in all forms and must ensure that every policy and regulation is designed to unlock investments that deliver this energy as affordably and sustainably as possible, for domestic use and export.
“Within weeks of assuming office in May 2023, he established a dedicated Energy Office in the Presidency – which I am privileged to lead as his special adviser – with a mandate to design and coordinate the implementation of bold reforms to reposition Nigeria as a top global investment destination.
“Our overarching energy strategy consists of four primary objectives, building on the foundation of the Petroleum Industry Act and the new Electricity Act. The first objective is to eliminate wasteful petrol subsidies and redirect the savings to critical investments in infrastructure and social sectors. The second is to restore and grow oil and gas production and associated fiscal income, prioritising strong economics, quick execution, and low emissions.
“Third is the deepening and diversification of the economy by shifting towards gas, for which demand will demonstrate greater resilience through the energy transition: gas for mass electrification and transportation, displacing petrol and diesel; gas for clean cooking; and gas for manufacturing (petrochemicals, fertiliser, and other industrial raw materials). The fourth objective is to scale up on-grid electrification in Nigeria by resolving liquidity challenges and attracting new private-sector investment,” she recalled.
Verheijen maintained that despite having the largest reserves of oil and gas in Africa, Nigeria endured being overlooked for years by investors who readily deployed capital to other countries deemed more fiscally attractive.
To urgently improve investor appetite for Nigeria and attract a portion of the over $90bn in planned investments in oil and projects over the next five years, she said the government held extensive engagements with leading investors, from which it emerged that Nigeria needed to roll out compelling investment incentives.
While noting that the government prioritised speed, protection of existing revenues, and ease of implementation in designing its policies, the special adviser disclosed that three presidential directives – Directives 40, 41, and 42 – were issued in February 2024, after months of work with private and public sector stakeholders.
“Through Directive 40, Nigeria now has, for the first time in history, a competitive fiscal framework for non-associated gas and deepwater gas, and much more competitive fiscal terms for the exploration and production of oil. This was followed by additional incentives in October 2024, to support investments in electric mobility and midstream and downstream infrastructure to increase the penetration of LPG, CNG, and mini-LNG.
“Additionally, we have done a lot to improve coordination within the government, working with a wide range of stakeholders including the Office of the National Security Adviser, cabinet ministers, heads of regulatory agencies, and others, to forge the needed solutions. With ONSA we collaborated to issue a series of data-driven directives that have helped improve the security of critical transport infrastructure like the Trans-Niger Pipeline in the eastern Niger Delta,” the presidential aide explained.
Highlighting the result, she stressed that Nigeria has since moved to the top quartile, in terms of competitive returns, among 14 indexed countries competing for deep offshore investments.
“The country accounted for three out of the four Final Investment Decisions recorded across Africa in 2024, with a combined value exceeding $5bn. These all happened within 10 months of the presidential directives.
“Total and Nigerian National Petroleum Company Limited committed to investing $500m in a gas project on the Ubeta field that was discovered in 1965; while Shell, Total, ENI, and Exxon delivered the standout highlight of 2024, a $5bn commitment to the Bonga North project, which will increase Nigeria’s production by 110,000 barrels a day.
“Across the energy transition value chain – CNG, LPG and electric mobility – we have already identified $700m of ongoing and prospective investment. We expect more investment decisions in the months ahead,” she remarked.
She pointed out that gas represents the backbone of Nigeria’s energy security vision for Nigeria.
“With oil, it is a race against time to derive maximum economic benefit from an abundant resource endowment – as its era of dominance gradually winds down,” she added.
Verheijen noted that every dollar of new brownfield and greenfield oil and gas investment represents jobs, new technical skills for the young people, economic dividends in host communities, and much-needed foreign exchange.
In the power sector, she emphasised that the new Presidential Metering Initiative launched in 2024 represents a huge step to deploy over 5 million smart meters by 2027, bolstering revenue assurance for the entire value chain.
“In 2024, we mobilised N700bn in new investments to support the initiative and bridge Nigeria’s metering gap.
“We are also working on settling the legacy debts burdening the power sector, discouraging new investment. Another critical effort is the introduction of electricity tariffs that reflect the true cost of providing power, while also striving for affordability by protecting the most vulnerable Nigerians with targeted support.
“By unlocking cost-reflective, reliable and affordable power, we will be setting the stage for a surge in standards of living, and unprecedented entrepreneurship and wealth creation.
“As 2025 kicks off, the reforms will gain even greater momentum and deliver more transformational outcomes. This is what we owe present and future generations of Nigerians, who deserve a country that has the capacity and drive to use its abundant resources to guarantee enduring prosperity for all,” she concluded.
