The federal government of Nigeria, through the Nigeria Sovereign Investment Authority (NSIA) and Vitol, an energy and commodity trader entity, has signed a $50 million joint venture company known as Carbon Vista to invest in projects that will regulate greenhouse gas emissions in different sectors.
The joint venture agreement was designed to invest in a range of carbon avoidance and removal projects like climate-smart agriculture, green industrial technologies, and waste management and attract a final investment decision on the first projects.
The Carbon Vista company aims to support Nigeria in meeting her net zero targets through investment in carbon-avoidant and removal projects like water purification, reforestation, and clean cooking that generate carbon credit that can be validated, registered, and subsequently monetized.
In addition, the joint venture will commence with projects in the country, partnering with local firms with proven track records of successfully delivering high-quality projects, combining carbon offsetting with social outcomes that contribute to attaining United Nations Sustainable Development Goals.
Below are key factors why the joint venture will be of great benefit to the country:
- Carbon market prospects
This expansion will help deepen Nigeria’s carbon market. In the last two months, the federal government concluded plans to bring in a carbon tax policy and budgetary system for the country, in line with the recently approved Energy Transition Plan, as part of the Climate Change Act. Under the arrangements, the federal government is expected to set a price that emitters pay for each ton of greenhouse gas emissions.
With the sight of the carbon tax policy together with the benefits of Carbon Vista, Nigeria can be a major player in creating the domestic emissions trading scheme. This will also create more carbon credits, attract foreign investment, encourage carbon offsetting, support sustainable development, and show leadership on climate change.
- Investment Opportunities
The $50 million earliest investment will focus on reducing emissions in Nigeria’s infrastructure, agriculture, and energy sectors, combining carbon offsetting with social outcomes that contribute to attaining United Nations (UN) Sustainable Development Goals.
It will also attract new investors as the partners develop the project pipeline. The investment will be channeled to renewable energy projects, environmental, social, and governance (ESG) initiatives, and other low-carbon initiatives in Nigeria that will attract additional funding from other investors.
“CarbonVista entity represents yet another milestone in NSIA’s mission to build critical infrastructure and create investment opportunities that drive economic growth and development in Nigeria,” said Zainab Ahmed, minister of finance, budget, and national planning, during the signing of the joint venture deal in Abuja.
Carbon Vista will also offer investment opportunities in maintainable infrastructure, energy efficiency, carbon offsetting, and private equity funds focusing on sustainable development.
- Direct Benefits to Nigerians
Experts in economics and investment fields say the joint venture will promote job creation, increased energy access, economic development, productivity, and revenue generation. The joint venture is expected to create job opportunities in the renewable energy sector and support Nigeria’s broader economic development goals. This will help ease the country’s unemployment rate. Part of the projects the joint venture provides is climate-smart agriculture that will ease food prices.
Carbon Vista is an integrated approach to managing landscapes cropland, livestock, forests, and fisheries addressing the interlinked challenges of food security and climate change.
- Climate change mitigation
Carbon Vista symbolizes a significant investment in Nigeria’s renewable energy sector, which could help the nation reduce its mandatory reliance on fossil fuels and mitigate the effects of climate change. This is significant for Nigeria’s efforts towards sustainable development and achieving net-zero emissions by 2060.
This investment can help Nigeria mitigate climate change by supporting the development of sustainable infrastructure like building green buildings, implementing sustainable transport systems, and improving waste management which will reduce greenhouse gas emissions.
“This is the type of partnership required between the public and private sectors as well as the civil society in the fight against climate change,” The vice president assured.
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