Can IEA’s goal of doubling Nigeria’s energy investment unlock capital?
Nigeria’s energy sector could attract at least twice the level of investment it receives today within the next five years, the International Energy Agency (IEA) has said, raising fresh questions about what the country must do to convert its vast oil, gas and renewable resources into bankable projects.
IEA Executive Director, Fatih Birol, gave the projection during his visit to Abuja as Nigeria began a new phase of cooperation with the Paris-based agency.
Birol said Nigeria’s energy resources, combined with reforms and its growing importance to global energy security, could make the country a more attractive destination for capital.
“My goal is, in a very short period of time, in five years, at least doubling the energy investments Nigeria is receiving today,” Birol said.
The projection comes as Nigeria seeks to increase crude oil production towards three million barrels per day by 2030 while also expanding gas production, electricity supply and renewable energy deployment.
However, doubling investment will require more than Nigeria’s resource base.
The investment gap
The wider African energy market illustrates the challenge.
The IEA’s World Energy Investment 2025 report said energy investment in Africa was expected to be about one-third lower in 2025 than in 2015, with falling oil and gas spending only partly offset by higher investment in other areas.
At the same time, clean-energy investment in Africa has been growing. Private-sector clean-energy investment rose from about 17 billion in 2019 to almost 40 billion in 2024, according to the IEA.
For Nigeria, this means the opportunity is not limited to attracting another wave of oil investment. Capital will be required across the energy value chain from upstream oil and gas projects and gas processing to electricity generation, transmission, distribution, solar power, energy efficiency and clean cooking.
The new Nigeria-IEA Joint Work Programme reflects that wider agenda. It covers areas including energy data, gas development, electrification and energy efficiency.
Better data, better investment?
One of the less prominent elements of the new partnership could prove particularly important: energy data.
Nigeria and the IEA have agreed to strengthen cooperation on energy data development and evidence-based policymaking, with the aim of supporting investment across the sector.
For investors, reliable information matters because energy projects require large amounts of capital and often take years before they generate returns.
Uncertainty over production levels, demand, tariffs, pricing, infrastructure and market conditions can increase the risk attached to a project and ultimately raise its financing cost.
Better data alone will not bring billions of dollars into Nigeria, but it can make it easier for investors to assess opportunities and risks.
Oil and gas still matter
Nigeria’s immediate investment opportunity remains heavily tied to oil and gas.
The Federal Government has been trying to reverse years of underinvestment in upstream production, while a new deep-water investment framework approved in August is designed to unlock as much as $50 billion in offshore oil and gas investment.
The government is also targeting higher crude production, with the country seeking to approach three million barrels per day by 2030.
However, attracting capital into upstream projects depends on more than production targets. Investors will be watching project economics, fiscal terms, security, crude supply, infrastructure and the speed with which regulatory approvals are obtained.
Gas and electricity could be the bigger test
Gas offers another major opportunity. Nigeria has some of the world’s largest natural gas reserves, but turning those reserves into economic value requires investment in processing plants, pipelines, power projects and other infrastructure.
The electricity sector presents an even larger financing challenge.
Nigeria needs capital not only for new generation but also for transmission networks, distribution infrastructure, metering, mini-grids and off-grid systems.
The IEA has previously highlighted the scale of Africa’s electricity investment needs, noting that around half of the continent’s energy investment required to 2030 is expected to be in electricity under its Sustainable Africa Scenario.
For Nigeria, this creates an opportunity to attract private capital into areas where public funding alone is unlikely to be sufficient.
The real question
Birol’s projection therefore raises a bigger question than whether Nigeria can double energy investment.
It is whether Nigeria can create enough investable projects to absorb that capital.
The country already has resources. What investors need is confidence that projects can be developed, financed and operated profitably over the long term.
That puts the spotlight on policy consistency, regulation, infrastructure, energy pricing, access to foreign exchange, security and the quality of market data.
Nigeria’s new relationship with the IEA could help by providing technical expertise, international benchmarks and stronger energy-sector data. The partnership cannot substitute for domestic reforms. If Nigeria succeeds in reducing investment risks while developing projects across oil, gas, power and renewables, the IEA’s five-year projection could become more than an optimistic forecast.
If those constraints persist, the country could remain rich in energy resources without attracting enough of the capital required to fully develop them.