PwC: Why Nigeria should consider a future energy fund

PwC Nigeria has highlighted the need for Nigeria to provide the necessary infrastructure, regulatory framework, and investments for its energy transition. The country must shift focus from traditional oil exploration to a future energy fund to stay competitive in the evolving global energy landscape. Taiwo Oyedele, Partner and Africa Tax Leader at PwC Nigeria, emphasized the importance of aligning Nigeria's energy strategy with the global shift towards cleaner energy sources. While commending the government's efforts in passing the Petroleum Industry Act, Oyedele stressed the importance of further action to attract capital and drive sustainable energy development. The key theme of the discussion centered on the urgent need for Nigeria to adapt to the changing energy sector and embrace cleaner sources of energy to secure its future prosperity. Three key points emerged from the interview with Oyedele: 1. Focus on Future Energy Fund: Oyedele advocated for the establishment of a future energy fund to drive investments in clean energy technologies such as wind, hydro, bioenergy, and hydrogen. By shifting focus from frontier oil exploration to clean energy research and development, Nigeria can position itself as a leader in sustainable energy in Africa. 2. Harnessing Gas Reserves: With vast gas reserves that could potentially add $18 billion to the economy, Nigeria must prioritize the development of its gas resources. Oyedele highlighted the importance of creating a conducive regulatory framework to attract investments in the gas sector and move towards market-driven pricing. 3. Energy Transition Readiness: Nigeria's low score of 35% in energy transition readiness indicates that more needs to be done to prepare for the shift towards cleaner energy sources. Oyedele warned that investors are increasingly avoiding high-cost, emission-intensive assets, putting Nigeria at risk of missing out on vital investments. The country must address infrastructure challenges, regulatory uncertainty, and political instability to attract capital and drive sustainable development. Oyedele's insights underscored the urgency for Nigeria to accelerate its energy transition efforts and embrace clean energy technologies to secure its position as a leading energy player in the region. In conclusion, Oyedele emphasized the importance of ongoing engagement between the government and the investment community to address the challenges hindering investment in Nigeria's energy sector. By taking proactive steps to create a conducive environment for investment, Nigeria can unlock its potential for sustainable energy development and economic growth.