Nigeria invests $2 billion to support energy transition

Nigeria's energy transition is being driven by green finance. The president announced plans on Tuesday for a $2 billion climate fund, saying that the oversubscribed green bond was proof of investor interest.

Bola Tinubu, speaking at the Abu Dhabi Sustainability Week Summit, said that Nigeria's Climate Investment Platform was aiming to mobilize $500 million to build climate-resilient structures, and the National Climate Change Fund aims to raise $2 billion to fund?projects to reduce emissions and increase resilience.

Tinubu announced that Nigeria and United Arab Emirates had signed a Comprehensive Economic Partnership Agreement. The CEPA aims to increase trade and investment in sectors such as renewable energy, aviation, logistics and agriculture.

Nigeria is facing major challenges in its environmental and climate policies, including the reduction of gas flaring, and?methane emission, as it strives to achieve its Energy Transition Plan which aims for net-zero emissions by 2060, while providing?universal access to energy.

Investors have shown a strong interest in Nigeria's green bonds programme. The president stated that a 50 billion naira ($38million) sovereign green bond dated 2025 received 91 billion in subscriptions while Lagos State's bond was oversubscribed nearly 98%.

Tinubu stated that his government also aims to unlock ambitious climate finance of $25-30 billion per year. The Climate and Green Industrialisation Investment Playbook is a new tool to help private investors and other stakeholders navigate the manufacturing policy and regulatory landscape.

This builds on previous initiatives, including the $500 million Distributed Renewable Energy Fund launched by the Nigeria Sovereign Investment Authority in March 2025. The fund was created to help local finance.

The president stated that "these reforms prove Nigeria is ready for businesses" and added that non-oil imports have grown by 21%, while investment commitments in key sectors now exceed $50 billion.

He said that Nigeria is prioritising technology partnership to modernise the grid, deploy artificial intelligence and improve efficiency. Pilot projects in electric mobility and green industrialisation are also being undertaken.

The president called on a shift to more blended financing -- which combines private and public capital and can absorb losses if a project does not perform well -- in place of sovereign guarantees. He said that these penalized emerging economies unfairly. (Reporting and editing by Aidan Lewis; Reporting by Isaac Anyaogu)

(source: Reuters)