Nigeria, Germany sign $500m renewable energy, gas deals

German Chancellor Olaf Scholz with President Bola Tinubu

In a significant move to strengthen economic ties, Nigerian and German companies sealed two pivotal agreements in Berlin on Tuesday.

The accords valued at $500m, encompass a renewable energy pact and a gas export deal, marking a milestone in bilateral cooperation, the Presidential spokesperson, Ajuri Ngelale said in a statement.

Union Bank of Nigeria and Germany’s DWS Group formalised a Memorandum of Understanding on renewable energy.

This strategic partnership aims to attract $500m in investments dedicated to renewable energy projects, with a primary focus on rural communities across Nigeria.

According to the statement, the second MoU solidified a gas export partnership between Riverside LNG of Nigeria and Germany’s Johannes Schuetze Energy Import AG.

Nigeria commits to supplying 850,000 tons of natural gas annually to Germany, with projections indicating an increase to 1.2 million tons. The initial shipments are scheduled for 2026, the statement confirmed.

An integral aspect of this deal is its contribution to processing approximately 50 million cubic feet per day of natural gas that would otherwise be flared.

This aligns with both nations’ commitment to environmentally conscious practices and sustainable energy solutions.

Nigeria, home to Africa’s largest gas reserves exceeding 200 trillion cubic feet, has grappled with environmental concerns linked to gas flaring.

This deal signifies a crucial step toward addressing this issue and harnessing Nigeria’s abundant gas resources for sustainable energy projects.

President Bola Tinubu, attending the G20 Compact with Africa conference in Berlin, expressed his approval of the agreements.

This positive sentiment aligns with Germany’s commitment, as Chancellor Olaf Scholz announced a 4 billion euro investment in green energy projects in Africa by 2030. The collaborative effort aims to support Germany’s transition to carbon neutrality and meet its goal of net-zero emissions by 2045.

Acknowledging the need for green hydrogen imports, particularly from Africa, Scholz highlighted the pivotal role these investments play in achieving environmental objectives.

The remarks were made during a German-African business forum preceding the G20 Compact with Africa summit, focusing on coordinating development agendas and identifying business opportunities in Africa.

Under President Tinubu’s leadership, Nigeria has undertaken significant reforms, including the removal of a popular petrol subsidy and the relaxation of foreign exchange trading restrictions.

These bold initiatives aim to make Nigeria more appealing to investors and revitalize its economy, addressing challenges such as sluggish growth, record debt, double-digit inflation, and crude oil theft.

The Federal Government two weeks ago revealed that more than N4.3tn worth of crude oil was stolen in 7,143 pipeline vandalism cases within five years.

The Telegraph reports that oil theft is an emergency that poses a serious threat to oil exploration and exploitation with huge negative consequences on economic growth, business prospects, and profit earnings by oil companies.