German and Nigerian companies have signed two agreements on natural gas exports and renewable energy investments, fostering the economic ties between the two countries, as reported by Reuters on November 22. Union Bank of Nigeria and Germany’s DWS Group [DWS:GR] have signed a memorandum of understanding (MoU) on renewable energy, under which Germany will invest USD500m in renewable energy and technology projects in Nigeria. Under another MoU, signed by Nigeria’s Riverside LNG project and Germany’s Johannes Schuetze Energy Import, Nigeria will export 850,000 tons of liquified natural gas (LNG) annually to Germany, with plans to increase to 1.2 million tons in the future. The first batch of LNG is set to be delivered in 2026, accounting for around 2% of Germany’s annual LNG imports.

Nigeria holds Africa’s largest gas reserves of more than 200 trillion cubic feet. However, about 300 million cubic feet were flared per day due to inadequate processing infrastructure. The recent agreement will address this issue by utilizing the gas for export instead of flaring, supporting Nigeria’s climate goals. Moreover, Germany’s significant renewable energy investment in Nigeria aligns with German Chancellor Olaf Scholz’s commitment to investing EUR4bn in green energy projects in Africa by 2030. Scholz stressed that these projects could in turn contribute to Germany’s transition towards carbon neutrality. As part of the commitment, Germany also announced a EUR500m(USD544m) climate financing program for South Africa on November 17, aiming to facilitate the country’s transition from coal.

Sources:

https://www.reuters.com/sustainability/climate-energy/nigeria-germany-sign-500-mln-renewable-energy-gas-deal-2023-11-21/

https://www.dw.com/en/nigeria-and-germany-agree-deal-on-gas-and-renewables/a-67513753

https://www.bloomberg.com/news/articles/2023-11-17/germany-will-lend-south-africa-500-million-for-energy-switch#xj4y7vzkg