Onome Amuge
Nigeria is making a fresh bid to transform its vast natural gas reserves into economic opportunity, after the African Export-Import Bank (Afreximbank) and the Midstream and Downstream Gas Infrastructure Fund (MDGIF) signed a memorandum of understanding to mobilise up to $500 million for gas infrastructure projects.
The agreement, sealed on the sidelines of the Intra-African Trade Fair in Cairo and facilitated by Cedrus Group Africa, sets out a plan to raise funds over four years for pipelines, processing facilities, and liquefied natural gas projects. Afreximbank will also provide credit risk guarantees to attract private sector participation and establish a project preparation facility to ensure that ventures reach financial close.
The partnership is considered more than a financing tool, as it is a test of whether Nigeria can finally turn gas wealth into competitive advantage. Africa’s largest holder of proven natural gas reserves has for decades struggled with underinvestment, leaving the sector defined by gas flaring, stranded resources, and missed export opportunities.
Despite proven reserves of more than 200 trillion cubic feet, Nigeria has failed to build the infrastructure needed to move gas from fields to markets. Ageing pipelines, bottlenecks in processing, and frequent regulatory uncertainty have deterred investment. The result is an economy still heavily reliant on crude oil exports, even as global markets shift toward cleaner fuels.
“Through this partnership, we are unlocking the potential to mobilise up to $500m over the next four years for Nigeria’s gas infrastructure. More importantly, we are creating a pipeline of bankable projects supported by feasibility studies, project preparation, and risk-sharing mechanisms that will accelerate the pace of investment,” said Ekperikpe Ekpo, minister of state for petroleum resources (Gas). “
Industry experts argue that Nigeria’s gas paradox lies not in geology but in governance. Repeated promises to end gas flaring (A practice where associated gas is burned off rather than captured) have slipped, even as investors grow impatient. Routine flaring costs Nigeria billions in lost revenue annually and has made it one of Africa’s largest emitters of methane, a potent greenhouse gas.
The Afreximbank-MDGIF deal seeks to address these gaps by blending financial depth with national policy alignment. Afreximbank’s track record in trade and project finance gives the initiative credibility, while MDGIF, created under the Petroleum Industry Act (PIA), ensures the projects are tied to Nigeria’s statutory energy objectives.
“We are poised to unlock new opportunities for inclusive growth and sustainable development across Nigeria and, potentially, across the West Africa sub-region,” said Kanayo Awani, Afreximbank’s executive vice-president for Intra-African Trade and Export Development.
The involvement of Cedrus Group Africa as adviser adds another layer of structure. The group’s CEO, Olubusayo Adeniyi, said its mandate would be to ensure that projects move beyond announcements into bankable, deliverable assets. “Mobilising private capital, structuring bankable projects, and creating the right frameworks for long-term sustainability in Nigeria’s gas sector is at the core of our role,” he said.
Gas has long been touted as the bridge fuel for Nigeria,capable of powering electricity plants, feeding petrochemical industries, and providing cleaner cooking fuels for households. Yet the infrastructure gap has left industries reliant on costly diesel generators and households dependent on firewood or imported liquefied petroleum gas.
“Anchored on our statutory mandate under the Petroleum Industry Act and aligned with President Bola Tinubu’s agenda, this partnership enables MDGIF to mobilise capital, expand critical midstream and downstream infrastructure, reduce flaring, and deliver sustainable energy solutions that power industries, create jobs, and improve livelihoods across Nigeria,” said Oluwole Adama, MDGIF executive director.
Analysts say the focus on midstream and downstream is particularly critical. While upstream exploration has historically attracted investor attention, bottlenecks in processing, transport, and distribution have left much of Nigeria’s gas underutilised. By channelling funds into processing plants, pipelines, and liquefaction facilities, the initiative is set to unlock wider value chains in manufacturing and energy-intensive sectors.
