ONGOING INVESTMENTS BETWEEN THE EUROPEAN UNION AND NIGERIA

1. Integrated Investments in Energy and Gas, Value Chains ( Liquified Natural Gas [ LNG ], gas-to-power, renewables integration)

   New offshore gas projects and integrated LNG projects such as major oil companies + local partners imply offtake in Engineering, Procurement, and Construction [ EPC ] plus service opportunities in Nigeria with the partnership of the EU. In the meantime, the green agenda of the EU presents opportunities of solar and mini-grid work as well as work of green-hydrogen, which can be co-financed by EU stakeholders and diaspora capital.

   

   Implications

   ● The energy security and business relations are intertwined with EU-related investments (as well as European-based energy companies doing business in Nigeria) that increase bilateral trade relations and provide the EU with an interest in the process of oil flaring to gas monetisation.

   ● Green-transition diplomacy and conditionality - As the EU demands net-zero ambitions, energy contracts are a bargaining chip to help decarbonise, transfer technology and fund low-carbon projects and projects in climate-compliant cooperation.

   ● Potential political and reputational risks - These are the risks of getting politically scrutinized and a reputational risk. EU-based large fossil fuel investments will bring the EU and its citizens, as well as the local communities, to bear scrutiny (regarding emissions, human rights, and local effects), and it will have to be actively managed by the EU and Nigeria on the diplomatic front.

2. Large Infrastructure Partnership & Project Financing (roads, coastal highway, transport corridors)

   Nigeria has just acquired the biggest syndicated financing ( a $747m loan to finance the first phase of the coastal highway ) - this is an indication of continuous large-ticket construction, logistics, and materials opportunities to investors and contractors. Diaspora investors are able to invest through project-level debt and infrastructure funds, or equity.

Implications

● This implies greater financial interconnectedness with European banks and Developmental Financial Institutions [ DFIs ]. Large syndicated loans and involvement of international banks such as (Deutsche Bank et al.) boosts EU financial-sector involvement and provides future avenues of EU DFI/co-financing.

● Bilateral political capital on regional connectivity - Delivery of marquee infrastructure increases the political presence of the EU in Nigeria (and the region) which makes it possible to do more high-end cooperation on trade, transport and security.

● Friction points in regulatory and contract-management Big projects create issues (local content rule, land acquisition, environmental and social protection) which demand technical collaboration and may become areas of diplomatic negotiation or conflict.

3. Value Chains in Agriculture In Accordance with the EU Sustainability Regulations (cocoa, rubber, timber, palm).

   Aggregation of growers, traceability technologies, certifications and sustainable processing facilities are demanded as Nigeria adjusted to the EUDR. Nigerian companies assisting smallholders to comply with traceability/deforestation free conditions open export outlets to the EU.

   Implications

   ● Development and diplomatic cooperation- Health partnerships under Global Gateway (local pharma, reproductive and maternal health) add to high-value cooperation, partnership and public-health diplomacy between the EU and Nigeria.

   ● Entry, technology transfer platform on the EU side: EU health investment projects open access to the Nigerian market for the entry of European manufacturers, diagnostics companies and investors in collaboration with the local industry.

   ● Soft-power benefits and resiliency cooperation — Effective collaborative health initiatives enhance bilateral goodwill and provide avenues of successive cooperation in areas of pandemic preparedness, research and regulatory convergence.