NIGERIA Law and Practice Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
cessing agreement. This case highlighted the critical importance of robust contract governance and due diligence in state-backed energy projects, signalling to investors and regulators that courts will no longer uphold transactions compromised by misconduct. • In Tempo Energy Resources Ltd v Aiteo Eastern E&P Company Ltd & Ors (FCT High Court, 2025), the court nullified London arbitration proceedings related to Aiteo’s acquisition of OML 29 and the Nembe Creek Trunk Line, reaffirming that Nigerian courts can oversee disputes involving domestic assets, even with foreign arbitration clauses. The ruling underscores the need for careful drafting of arbitration and governing law clauses in M&A agreements to avoid conflicts with Nigerian law, and signals that local courts will likely retain juris- diction over domestic energy assets • Finally, In Alame v Shell Plc (UK High Court, 2025), the court extended potential liability for environ- mental damage in the Niger Delta to the parent company, emphasising that legacy environmental obligations can materially affect asset valuation and post-acquisition responsibilities. As a result, investors now place greater scrutiny on environ- mental liabilities during due diligence. 6.2 Key Developments in Renewable Energy and Cutting Emissions The Electricity Act 2023 is the most significant legal development in Nigeria’s renewable energy space. It repealed the existing legislation and decentralised the electricity market, empowering state governments to establish and regulate their own independent power systems, thereby creating opportunities for solar, mini- grid and embedded power projects, while promoting competition in off-grid electricity provision. From a regulatory and political viewpoint, Nigeria’s priorities are centred on expanding energy access, advancing its energy transition and reducing carbon emissions. The country’s Energy Transition Plan 2022 targets net-zero by 2060, and Nigeria iscommitted to cutting emissions by 32.2% by 2035 under its updat- ed Nationally Determined Contribution 3.0 (submitted September 2025). The Nigeria government has dem- onstrated considerable support through regulatory reforms, formal commitments and active promotion of
private sector participation, signalling a positive and enabling environment for investors. Several incentive schemes underpin this support, including feed-in tariffs guaranteeing fixed payments for renewable electricity, pioneer status tax holidays for three to five years, and customs and import duty exemptions for critical renewable energy equipment. Concessional financing and grants from development partners complement domestic incentives, particular- ly for off-grid and distributed energy solutions. In conventional energy, political and regulatory focus has been on domestic refining, gas development and regulatory clarity. New reforms following the enact- ment of the Petroleum Industry Act 2021 established clear frameworks for upstream and midstream opera- tions, enforcing environmental and social obligations, including decommissioning and remediation funds for host communities, and strengthening gas-to-power initiatives. Milestones like the Dangote Refinery exem- plify efforts to reduce reliance on imports, expand local production and attract private investment, reflecting a co-ordinated strategy to balance energy security, environmental accountability and industrial growth. 7. Due Diligence/Data Privacy 7.1 Energy and Infrastructure Company Due Diligence Public companies are allowed to provide bidders with comprehensive due diligence information necessary for the bidders to accurately assess the value, risk and prospects of the target company. Non-public data may be disclosed as long as it upholds fair dealing and market transparency standards under the SEC’s Code of Corporate Governance and NGX Listing Rules. While a company is under no legal obligation to pro- vide identical information to all bidders, its board of directors must ensure that disclosures are made in a manner consistent with their fiduciary duties, balanc- ing bidder access with confidentiality and the protec- tion of shareholder interests. The board also retains discretion over the scope and depth of due diligence permitted, depending on the stage of the transaction and bidder status.
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