Companies in Nigeria and Germany have signed two agreements: a $500 million renewable energy memorandum of understanding (MoU) and a gas export accord.
According to Ajuri Ngelale, spokesperson for Nigerian President Bola Tinubu, the renewable energy MoU is seeking investments in projects all over the country, primarily in rural communities, reported Reuters.
Farouk Gumel, Chairman of Union Bank of Nigeria, confirmed a $500 million commitment for the green energy projects and pointed out the necessity of including rural communities and attracting more people to participate in the formal economy, Africa Business Insider reported.
The other party to the renewable energy MoU is Germany’s DWS Group. A liquefied natural gas (LNG) export accord was also struck between Johannes Schuetze Energy Import AG of Germany and Nigeria’s Riverside LNG.
The agreement to bring LNG from Nigeria to Germany would put a stop to 50 million cubic feet of natural gas flares in Nigeria each day, Africa Oil+Gas Report said.
“The project will supply energy from Nigeria to Germany at 850,000 tonnes per annum, expanding to 1.2Million tonnes per annum,” said CEO of GasInvest David Ige, as reported by Africa Oil+Gas Report. “The first gas will leave Nigeria for Germany in 2026, and there will be further expansion.”
Nigeria is home to the largest gas reserves in Africa at 200 trillion feet. However, the country burns off approximately 300 million cubic feet each day because of a lack of adequate processing facilities, Reuters reported.
Since President Tinubu was elected, a gas subsidy was stopped and restrictions were lifted on foreign exchange trading. Tinubu is looking to make Nigeria more appealing to investors in order to invigorate an economy that has enormous inflation, record debt, slow growth and the theft of its biggest export, crude oil.
President Tinubu was in Berlin for the G20 Compact with Africa summit.
“Since 1999, we have witnessed changes in democratic governance, with peaceful transfers of power within and between parties. Democracy in Nigeria has proven to be flexible and resilient,” Tinubu said, according to Africa Oil+Gas Report. “Shake off any remnants of the military era syndrome; we have moved beyond that. Despite challenges faced by other African nations, Nigeria stands firm, and we are your partners.”
Chancellor of Germany Olaf Scholz said the country will invest heavily in African green energy projects to the tune of four billion euros until 2030, reported Reuters. Scholz pointed out that the investments could help Germany in its transition to becoming carbon neutral.
“Africa is our partner of choice when it comes to intensifying our economic relations and moving toward a climate-neutral future together,” Scholz said, as The Associated Press reported.