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Climate change rains on efforts to raise finance

Climate change action: How a unified approach can attract global investment

Many local companies who expressed interest to acquire some marginal fields in last year’s bid round were unable to raise the signature bonus ranging from $5 million to $20 million forcing some to be merged or to drop out entirely. Against this backdrop, local companies seeking to buy Shell’s assets valued at $3 billion face a bigger challenge.

Climate change concern is drawing away critical investment dollars from the energy sector. Some of the world’s biggest financiers, pension funds, philanthropies have said they would no longer fund fossil fuel projects. Major banks and multilateral organisations are facing pressure to discontinue funding oil and gas projects.

Read also: Rising climate activism may weaken AFCFTA’S benefits for energy sector

In this environment, local oil companies seeking to raise financing to acquire Shell’s assets would face a serious challenge. Sources close to the negotiation say financing and the ability to sustainably explore without ruining the environment are Shell’s top concerns.

This is why the proposal by the European Union to label natural gas as a ‘green energy’ source could boost the divestment deals.

Nigeria along with other gas producers has been campaigning for the inclusion of gas as a clean energy source.

This proposal will pave the way for new European investments in natural gas in Africa and will therefore allow Europe to unlock billions of euros in finance and sustainable energy funds to support gas as a transitional energy source, a development that may yet rescue this deal.

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States

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