Power Africa Partners with Nigeria on its Clean Energy Transition
Nigeria’s Journey to End Gas Flaring
Nigeria, one of Africa’s leading oil-producing countries, faces a unique challenge, heavy crude oil — and the ‘associated gas’ that is produced as a byproduct of crude oil production — is a major driver of climate change.
Since it’s currently not economical to export associated gas, it’s often ‘flared’ (e.g. burned) on-site as a means of disposal. As one of the top seven gas-flaring countries globally, Nigeria’s flaring activities release significant carbon emissions, impacting the environment, economy, and the health of an estimated two million people living near flare sites.
Recognizing the urgency, the Nigerian government set an ambitious target to end gas flaring by 2030, aiming to meet the nation’s energy needs while mitigating climate change.
Central to this effort is the Nigeria Gas Flare Commercialization Programe (NGFCP), launched in 2016, which aims to capture flared gas and repurpose it for productive uses such as power generation.
By engaging private sector investors through a competitive bidding process, these projects were designed to reduce Nigeria’s carbon emissions and advance power generation initiatives, aligning with Nigeria’s commitments under the 2015 Paris Agreement and the country’s Nationally Determined Contributions (NDC).
Power Africa’s Role in Nigeria’s Clean Energy Push
Since 2018, Power Africa has partnered with the Government of Nigeria to provide strategic support to the NGFCP, playing a pivotal role in the program’s development.
From 2018 to 2019, Power Africa helped shape the program’s commercial framework, establish a robust bidding process, and develop evaluation criteria for prospective bidders. This led to the pre-qualification of 205 private sector bidders poised to utilize flare gas for power generation and other productive uses.
In 2022, Power Africa’s collaboration with the NGFCP identified 49 flare sites for auction, marking a significant step forward. The sites, comprising shallow offshore, land, and swamp locations, emit roughly six million metric tons of carbon dioxide annually.
In 2023, Power Africa supported the NGFCP to select 42 companies in the first round of the bidding process, paving the way for targeted flare gas reduction projects.
Additionally, Power Africa delivered a comprehensive technical workshop to the Nigerian Upstream Petroleum Regulatory Commission on gas contract management and commercial best practices, enhancing the Commission’s capacity to lead the program effectively.
Driving Impact through Strategic Partnerships
The partnership between Power Africa, the NGFCP, and key stakeholders like the World Bank is anticipated to deliver substantial benefits, including advancing Nigeria’s NDC goals by reducing greenhouse gas emissions and converting methane into a valuable resource.
The initiative also opens new export and contract opportunities for U.S. and international energy providers, fosters domestic employment, and supports Nigeria’s economic diversification efforts.
In April 2024, Power Africa and the Nigerian Upstream Petroleum Regulatory Commission co-hosted the Nigeria Gas Flare Commercialization Programme Investors Forum, drawing 154 participants, including developers, investors, technology providers, and industry leaders. The forum facilitated direct engagement between flare-gas buyers and financiers, addressing investment and technology solutions for gas flare elimination and commercialization. It also tackled critical concerns from the investment community, such as guaranteed flare volumes, fostering a more conducive environment for investment.
Kelechi Onyekachi, Executive Commissioner of Corporate Services and Administration at the Nigerian Upstream Petroleum Regulatory Commission, praised Power Africa’s role:
“The Commission highly values the knowledge, partnership, support, and expertise provided by the Power Africa team in the implementation of the Nigerian Gas Flare Commercialization Programe (NGFCP).
[Its] contributions have been instrumental in achieving key milestones, such as the award of gas flare sites to successful bidders and the ongoing dialogue among the Commission, developers, financiers, and technology partners.”
Recognition and Ongoing Support
Power Africa continues to support the Nigerian Upstream Petroleum Regulatory Commission by reviewing and finalizing key agreements, including the gas flare buyers permit, facilitating meetings between investors and developers, and providing one-on-one advisory sessions to help developers become investment-ready.
Looking Ahead: A Greener Future for Nigeria
As the NGFCP moves towards its next milestone — the issuance of permits in late 2024 — flare-gas buyers will be empowered to undertake the financial and technical activities needed to bring gas flare reduction projects to life.
Power Africa’s support remains crucial in driving Nigeria’s transition to a sustainable and environmentally responsible energy future, demonstrating the power of partnership in tackling one of the most critical challenges of our time.
Learn more about Power Africa’s work in Nigeria
