An oil and gas report reviewed on Sunday showed that only $1 billion has been pledged by investors to the $80 billion in gas-to-power projects slated for establishment in Nigeria.
According to The Punch, stakeholders in the industry said in the report that financing for natural gas projects had decreased as a result of the push for climate-friendly projects in the wake of the recently finished policy conversation on Nigeria’s Decade of Gas plan.
The African Initiative for Transparency, Accountability, and Responsible Leadership organized the policy conversation that gave rise to the study in collaboration with the Natural Resource Governance Institute.
According to the study, investment for natural gas projects is declining internationally due to a desire for environmentally and climatically friendly initiatives.
“A reflection of this is the fact that just $1 billion has been committed to the many gas-to-power projects (estimated at $80 billion) that are expected to be constructed in Nigeria, with the other projects still in the negotiating phase and experiencing numerous difficulties.
“The rising risks of gas projects to infrastructure lock-ins and stranded assets, as well as other technical problems, as well as their unprofitability and bankability, are another aspect of the decline in funding.”
According to the statement, In light of this, it is necessary to adopt a strategy that concentrates on one or two financially successful brown gas projects rather than the 10 that are currently planned, in order to ensure that there may be a remote chance of success.
The dialogue’s participants noted that financing gas projects would be challenging, but they also noted that all hope was not lost, according to the document.
It added that funding options include international development banks and the chances provided by the conception of the novel African Energy Bank and that in order to help with credit allocation for project finance, it is also necessary to give an acceptable risk rating to these initiatives.
“At COP28, financing for petrol has to be discussed through support for funding innovations that can reduce the emissions potential of natural gas,” they stated in the report.”
