NIGERIA Law and Practice Contributed by: Ben Unaegbunam, Omolola Coker, Sanford Mba, Promise Osimhen, Chidera Chikere and Oluwaseun Denagan, Dentons ACAS-Law (Adepetun, Caxton-Martins, Agbor & Segun)
The loan tenors of local bank financing are gener- ally shorter due to local liquidity constraints, so international co-financing is crucial for long-term projects. • Export Credit Agencies (ECAs) and Multilateral Financing: ECAs play important roles in large-scale funding of projects by providing guarantees, buyer credits or insurance to reduce credit risks. Multilat- eral lenders such as the African Development Bank (AfDB), International Finance Corporation (IFC), and African Export–Import Bank (Afreximbank) are active in Nigerian project finance. Their involve- ment often improves bankability by providing longer tenors, concessional rates, or partial risk guarantees. • Project Bonds and Capital Markets: Project bonds are typically issued through infrastructure funds or listed on the FMDQ Securities Exchange or the Nigerian Exchange (NGX) and governed by the Investment and Securities Act 2025 (ISA) and the rules of the Securities and Exchange Commission (SEC), which regulate debt securities issuances. Bonds can be issued by corporates, state govern- ments, and infrastructure vehicles. The Nigerian government, through the Debt Management Office (DMO), raises funds for infrastructure via FGN bonds, which are earmarked for roads, power, and transport projects. • Alternative Sources of Financing: There are notable trends emerging in the Nigerian acquisition financ- ing landscape, particularly in response to recent macroeconomic shifts, regulatory changes, and recapitalisation pressures on banks. These include private equity funding, commodity trader financing, mezzanine debts, etc. 8.7 Natural Resources Natural resources projects in Nigeria are governed by a framework of constitutional provisions and sector- specific laws. Under the Nigerian Constitution, the Petroleum Industry Act 2021 (PIA), and the Nigerian Minerals and Mining Act 2007, all petroleum and solid minerals are vested in the federal government. Exploration, development, and production rights are granted through licences, leases, or permits to private investors. Foreign investors are required to comply with local content requirements which mandate par-
ticipation of Nigerian companies, labour, and services in upstream and midstream operations. In the oil and gas sector, while crude oil exports are generally unrestricted once royalties and taxes are set- tled, and crude is traded on a “willing-buyer, willing- seller” basis, such exports must align with approved production quotas and satisfy Domestic Crude Supply Obligations to secure feedstock for local refineries. While the framework supports local refining and sta- bilises pricing, it also creates potential tension with pre-existing offtake or financing agreements, making predictable rules and commercially viable terms criti- cal to maintaining investor confidence. For solid minerals, the Nigerian Minerals and Mining Act requires certain minerals to undergo value addi- tion or beneficiation such as crushing, grinding, smelt- ing, or refining prior to export. 8.8 Environmental, Health and Safety Laws • The Environmental Impact Assessment (EIA) Act mandates EIAs for projects likely to have significant environmental effects before commencement. It is overseen by the Federal Ministry of Environment and enforced through the National Environmental Standards and Regulations Enforcement Agency (NESREA). • The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act empowers NESREA to enforce environmental standards, regulations, guidelines, and compliance monitoring. It also covers pollution control, waste management, hazardous substances, and biodiver- sity protection. • The National Oil Spill Detection and Response Agency (NOSDRA) Act regulates oil spill prepared- ness, detection, and clean-up and is administered by the National Oil Spill Detection and Response Agency. • The Factories Act provides for worker safety, workplace health conditions, protective equipment, and reporting of accidents and is overseen by the Federal Ministry of Labour and Employment. • The Upstream Petroleum Safety Regulations 2022 enforce safety standards in operations in the upstream petroleum sector and are overseen by
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