NIGERIA Trends and Developments Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
• a EUR20 million bilateral agreement between the federal government of Nigeria and the government of Germany to support renewable energy project development in the country; • USD500 million funding from AfDB for Nigeria’s Grid Battery Energy Storage System; and • a USD1.98 billion investment agreement between the Adamawa State Government and the REA to develop a 3,000 MW solar photovoltaic farm – one of the largest proposed solar developments in West Africa. Notable deals The M&A landscape has witnessed scale, strategy and significant market shifts. There is a market recali- bration for growth amid sweeping regulatory reforms, ambitious drive from local businesses fighting for mainstream market share, and deepening collabora- tion between the private sector and government for the development of key infrastructure assets that are immediately generating cash. Market-defining trans- actions recorded within 2025 include the following. Upstream oil and gas The USD510 million divestment by TotalEnergies EP Nigeria of its 12.5% non-operating interest in OML 118 (Bonga) to Shell (SNEPCo) and Nigeria Agip Explo- ration was the largest IOC divestment post-PIA and reinforces the shift of ownership in the core upstream assets to indigenous operators. Private infrastructure finance The USD700 million equity investment into Arise Inte- grated Industrial Platforms by a new shareholder, Vision Invest, represents Africa’s largest private infra- structure equity inflow and signals foreign investor confidence in private infrastructure assets. Renewable energy/power infrastructure A USD200 million partnership between WeLight Africa and Nigeria’s REA for mini-grid projectsdemonstrates growing investor appetite for distributed power and off-grid electrification. Private infrastructure finance (transport) A USD65 million investment by BUA Group, in part- nership with the Nigeria Ports Authority, to reconstruct Rivers Port Terminal B signals growing interest from
major local players in unlocking value from transport and other cash-generating infrastructure. Market risks and sectoral challenges Despite sustained investor interest, M&A activity in Nigeria’s energy and infrastructure sectors continues to be shaped by a number of structural and market risks. These sectors are characterised by high capi- tal intensity, long asset life cycles and significant regulatory oversight, making transaction execution and post-acquisition operations sensitive to policy inconsistency, tariff regimes and macroeconomic conditions. While recent reforms – notably the PIA and the Electricity Act, 2023 – have improved gov- ernance clarity and opened new entry pathways for private capital, legacy challenges such as regulatory co-ordination gaps, political intervention in tariff set- ting, foreign exchange constraints and infrastructure deficits continue to influence pricing, valuation and risk allocation in transactions. Against this backdrop, the key sectoral risks that typi- cally influence energy and infrastructure M&A in Nige- ria include the following. Insecurity and cost of deal execution Security remains one of the biggest challenges plagu- ing the energy and infrastructure sector in Nigeria. Reforms have improved regulatory clarity, but security concerns remain acute, as crude oil theft, pipeline van- dalism and sabotage continue to disrupt production costs and reliability, predominantly onshore. These security pressures directly influence the commercial viability of assets and the predictability of cash flow, which are key considerations in M&A valuation and due diligence. As a result, transaction structuring in the sector has increasingly factored in risk allocation mechanisms, including consortium-led bids, securi- ty-related cost buffers within financial models, strong warranties and indemnity negotiations, force majeure carve-outs and government or sponsor-backed guar- antees. Macroeconomic volatility (FX, inflation and interest rates) Nigeria continues to record notable macroeconomic volatility, with currency fluctuations persisting despite some moderation. The inflation rate remains high and
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