By Adedapo Adesanya
Nigeria’s sovereign wealth fund, Nigerian Sovereign Investment Authority (NSIA), and Vitol have launched a joint venture to invest in a range of carbon avoidance and removal projects.
The NSIA said an initial $50 million had been committed and that both firms were in the process of reaching a final investment decision on the first projects.
The new entity called CarbonVista was first considered last July to invest exclusively in projects in Nigeria.
It said the first investment would be in a household energy efficiency program aimed at improving clean cooking and water filtration.
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 the attainment of UN Sustainable Development Goals.
It was announced that investments would focus on various sectors, including infrastructure, agriculture, and energy.
This initiative will also seek to mobilize capital from funding partners to the voluntary carbon market in support of the effort of the Nigerian government toward a more equitable energy transition for Africa.
Approximately one billion people in sub-Saharan Africa rely on wood and charcoal for daily cooking and water purification, a major cause of the nearly 4 million hectares of annual deforestation and degradation across the continent, the NSIA said.
The NSIA said the joint venture will provide rural households with efficient devices that would reduce wood fuel consumption and related greenhouse gas emissions while also saving them money and time.
It added that the firm would deploy up to 200,000 devices initially.
Speaking on this, Mr Aminu Umar-Sadiq, Managing Director and Chief Executive Officer of NSIA, said: “The realization of Nigeria’s Energy Transition Plan requires a radical rethink of our energy consumption mix beginning from the micro-level.
“Without incremental steps to address the fundamental issues, including water security and homestead energy access and consumption, achieving the ETP goals may remain unrealized and further exacerbate our climate risks.”
“Carbon Vista adopts a pragmatic approach to these challenges. We are pleased to be leading this novel path for delivering Nigeria’s net-zero targets,” he added.
“This joint venture should be a catalyst in the creation of 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,” NSIA noted.
Modupe Gbadeyanka