NIGERIA Trends and Developments Contributed by: Tosin Ajose, Izuchukwu Ubadinma, Deborah Leshi and Precious Omope, DealHQ Partners
targets set by the regulator can claim a tax credit equal to 50% of the cost savings, capped at 20% of annual tax liability. Nigerian Upstream Petroleum (Commercial) Regulations 2025 These regulations introduce strict regulatory control on commercial activities in the upstream sector by imposing strict financial and project planning require- ments on operators for approval of oil field develop- ment. Under this regulation, companies are mandated to present detailed budgets and development plans, and to demonstrate that they have the financial dis- cipline and technical capacity necessary to execute their field development programmes. These requirements have implications for energy infra- structure and M&A activities. Investors and acquirers must undertake in-depth commercial and regulatory due diligence to confirm that targets have compliant development plans, credible budgets and financial capacity to execute projects. For energy infrastruc- ture projects like pipelines, plants and processing facilities, the regulation promotes disciplined capital deployment and transparency around project viabil- ity. Although this increases compliance obligations, it ultimately boosts investors’ confidence and sup- ports long-term infrastructure development across the upstream value chain. National Integrated Electricity Policy (NIEP) Approved in May 2025, the NIEP is a response to Nige- ria’s growing population and evolving energy needs. It provides a co-ordinated, well-structured policy frame- work designed to transform Nigeria’s electricity sector and the required interventions needed to implement the objectives of the Electricity Act 2023. The policy addresses key areas such as electricity supply, infra- structure development and improving energy access across the country. This creates a predictable and supportive environment for private sector involvement and the exploration of new investment opportunities. The Nigeria Tax Act 2025 Enacted on 26 June 2025 but set to take effect on 1 January 2026, this legislation introduces several fis- cal measures relevant to energy infrastructure sector
and M&A activity. These key provisions include the following. • Exports of oil and gas, as well as crude petro- leum oil and feed gas used in processed gas, are exempted from Value Added Tax. • VAT charges on petroleum products and renewable energy equipment, including solar panels, inverters, batteries, compressed natural gas, liquified petro- leum gas and other gaseous fuels, is suspended. • Economic Development Tax credit will be granted to companies investing in priority areas of the extractive industry, such as renewable energy, electricity and gas supply, refined petroleum prod- ucts and mining. • A 5% surcharge is introduced for chargeable fos- sil fuel products produced or supplied in Nige- ria, except clean or renewable energy products, household kerosene, cooking gas and compressed natural gas. The Exposure Draft of NERC Net Billing Regulations 2025 Exercising its powers under the Electricity Act 2023, the NERC has published the Exposure Draft of the Net Billing Regulations 2025 for stakeholder consulta- tion. The draft regulation establishes a standardised framework for integrating renewable energy installa- tions into the national electricity distribution network, enabling customers to export surplus power to the grid under a credit-based billing system. It is expect- ed to enhance the commercial viability of distributed renewable energy projects, including rooftop solar, mini-grids and hybrid energy systems. By providing predictable revenue streams through net-billing credits, the regulations create attractive investment opportunities and supports private sector participation in energy infrastructure. From an M&A perspective, the framework may stimulate transaction activity in the renewable and distributed energy sector through partnerships, acquisitions and joint ventures with solar developers, battery storage providers and smart-metering technology companies. Outlook Looking beyond 2025, it is expected that Nigeria’s energy and infrastructure M&A landscape will con-
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