NIGERIA Law and Practice Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
While ongoing geopolitical tension in Ukraine and Gaza, compounded by ongoing global trade wars, may have heightened global uncertainty, disrupted supply chains and shifted energy supply strategies, fostering cautious investor sentiment globally, Nige- ria’s pivotal role as Africa’s leading energy producer has further insulated its M&A environment from exter- nal shocks. Domestic regulatory reforms and strategic local acquisitions have also helped to counterbalance inflationary and geopolitical pressures, positioning Nigeria as West Africa’s leader in deal volume and second on the continent, and reinforcing its leader- ship role in Africa’s energy transition and infrastructure expansion. 1.2 Energy and Infrastructure Trends Nigeria’s upstream oil and gas sector continues to experience significant divestments of high-risk onshore and shallow water assets by the IOCs for deeper water and gas developments. Investor confidence is on the rise, reflected in a surge in rig activity from eight in 2021 to 69 in 2025, and in the approval of 28 new Field Development Plans backed by USD18.2 billion capital flow, expected to add 600,000 barrels of oil and 2 billion cubic feet of gas per day to national production. Midstream gas infrastructure investment is also peaking, supported by the Midstream & Downstream Gas Infrastructure Fund, which is supporting projects like the ANOH Gas Processing Company’s development and construc- tion of a 300 MMSCFD gas plant. Renewable and alternative energy infrastructure is expanding through solar PV, mini-grids, mesh grids and CNG initiatives. Programmes like the World Bank’s USD200 million DARES project are support- ing rural electrification, while private investor and green bond proceeds are driving urban mini-grids and smart-grid solutions. The Presidential CNG Initiative is also promoting cleaner public transport, while EV adoption is growing with an influx of funding support for charging infrastructure from private and climate- focused investors. Nigeria’s infrastructure sector is also attracting domestic and international capital into core transport, housing, power and digital connectivity infrastructure
development. Projects such as the Lagos–Calabar Coastal Highway (USD2.5 billion), the Lekki Deep Sea Port expansion, and strategic partnerships with EU, G7/US, Gulf and Asian investors are reshaping deal structures, favouring equity and joint ventures over conventional debt, with billions of US dollars being committed to energy and infrastructure pipeline deals. The mining sector – particularly lithium process- ing – is growing under local value-add policies, with over USD800 million invested in processing projects and licensing now tied to in-country beneficiation. Policy reforms, including the Nigeria Tax Act and Nigerian Upstream Petroleum Regulatory Commis- sion (NUPRC) regulations, have standardised fiscal frameworks, reporting and cost structures in upstream petroleum operations. ESG and sustainability considerations are increas- ingly influencing investment decisions. IFRS S1 and S2 disclosure standards, ESG audits, climate scenario modelling and carbon market initiatives are integrating climate risk into project planning models, whilst regu- lators such as the Nigerian Content Development and Monitoring Board are enforcing compliance, reflect- ing a strategic shift toward low-carbon, sustainable infrastructure and energy investments, while balanc- ing Nigeria’s immediate development needs with long- term sustainability goals. 1.3 Access to the Energy and Infrastructure M&A Market Investors seeking to access Nigeria’s energy and infrastructure M&A market are employing diverse and strategic approaches shaped by regulatory reforms, local content policies and the ongoing energy transi- tion strategy. The favoured approach to entry given the heavy cost of borrowing is equity investment, where investors acquire either minority or controlling stakes in existing energy and infrastructure companies in order to gain operational influence and long-term exposure to profitable ventures. Another pathway is via asset acquisitions and divestments, particularly the purchase of onshore and offshore assets divested by international oil companies. Investors are also forming consortiums, allowing local and foreign partners to pool resources, share risks and
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