NSIA, Vitol seal $50m joint venture climate deal

The Nigeria Sovereign Investment Authority (NSIA), managers of Nigeria’s Sovereign Wealth Fund, and Vitol have completed a joint venture agreement to invest in a range of carbon avoidance and removals projects as well as in the process of reaching a final investment decision on the first projects.

According to a statement, an initial $50 million has been committed to Carbon Vista, the joint venture company, to attract new investors as the partners develop the project pipeline.

The JV will commence with projects in Nigeria, partnering with local firms with proven track records of successfully delivering high-quality projects, combining carbon offsetting with social outcomes that contribute to attaining UN Sustainable Development Goals. Its investments will focus on infrastructure, agriculture, and energy.

Aminu Umar-Sadiq, managing director/CEO of NSIA, said that given the NSIA’s mandate as the custodian of economic resources for the next generation of Nigerians, tackling climate risks that have adverse effects on the environment is core to the implicit objectives of the Authority.

“NSIA’s sustainability objectives go beyond seeking out profitable investments that incorporate climate solutions, but more pressingly to mitigate activities that could have an adverse impact on the well-being of the next generation,” he said.

To achieve this objective, Umar-Sadiq said the Authority had implemented a three-fold sustainability strategy that firstly addresses sustainability at an institutional level.

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“Secondly, NSIA embeds ESG practices in its investment process while advancing climate solutions that help to lower Nigeria’s carbon footprint, and lastly builds partnerships with other institutions to support Nigeria’s overall goal of achieving net-zero emissions by 2060,” he said.

According to Umar-Sadiq, the NSIA acknowledges the significant resources required to undertake green projects that deliver appreciable social impact and have partnered with Vitol to set up CarbonVista as a platform for developing quality projects and attracting third-party capital.

“Over the next few months, NSIA will roll out projects to set the standard for ESG investment in Nigeria. He said that these projects will be carefully selected, partnering with local institutions with proven track records of successfully delivering high-quality projects,” he said.

Umar-Sadiq added that the NSIA expects this partnership to morph into a platform that catalyses the carbon trading market, encourages green project development, and attracts significant third-party capital into the ESG space in Nigeria.

“The unique challenges posed by climate change call for deliberate and strategic action at all levels. At the NSIA, we developed a 3-prong strategy for delivering our ESG and climate finance objectives,” he said.

“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.”

According to him, CarbonVista adopts a pragmatic approach to these challenges. We are pleased to lead this novel path for delivering Nigeria’s net-zero targets.

“Our partnership with NSIA, in support of Nigeria’s efforts to cut GHG emissions, aligns with Vitol’s commitment to sub-Saharan Africa. The projects delivered through the JV will focus on ensuring social benefits alongside the highest carbon offsetting standards,” said Michael Curran, head of environmental products at Vitol.

“We have invested in high-quality carbon-mitigating projects globally for over a decade, addressing critical environmental and climate threats.”

According to him, this joint venture should be a catalyst in creating 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,” he said.

Zainab Ahmed, minister of finance, budget and national planning, said the NSIA’s unwavering commitment to promoting sustainable development in Nigeria is evident through its extensive portfolio of successful projects.

According to her, CarbonVista represents yet another milestone in NSIA’s mission to build critical infrastructure and create investment opportunities that drive economic growth and development in Nigeria.

“I am particularly pleased that this initiative is a Joint Venture between two important players in their respective fields, targeting one common goal: to invest an initial $50 million towards developing sustainability-driven projects in Nigeria,” she said.

“This venture is expected to attract additional capital and leverage the large pool of ESG resources to create new businesses and develop the voluntary carbon market in Nigeria. It demonstrates the power of partnerships in driving positive change toward sustainable development.”