Wedoany.com Report-Sept. 17, Nigeria’s Midstream and Downstream Gas Infrastructure Fund (MDGIF) and the African Export-Import Bank (Afreximbank) have signed a memorandum of understanding (MoU) for a four-year plan worth up to $500 million. The initiative aims to expand and modernize Nigeria’s natural gas infrastructure through a mix of debt and equity financing.

Nigeria's MDGIF and Afreximbank signed an MoU for a four-year debt and equity plan of up to $500 million to expand and modernize the West African country's natural gas infrastructure.

According to a joint statement, Afreximbank will consider providing direct financing and credit risk guarantees to support project finance transactions in cooperation with local financial institutions. MDGIF will look into equity contributions to complement Afreximbank’s senior debt, enabling full capital structuring for qualified projects. Both parties will also pursue a structured program to enhance MDGIF’s institutional capacity in project structuring, risk management, and innovative financing.

MDGIF, created under Nigeria’s Petroleum Industry Act, focuses on making equity investments in midstream and downstream gas infrastructure. Its primary goal is to increase domestic natural gas consumption through projects that also attract private investment.

Nigeria’s Petroleum Resources (Gas) Minister Ekperikpe Ekpo said: "Through this partnership, we are unlocking the potential to mobilize up to $500 million over the next four years for Nigeria’s gas infrastructure. More importantly, we are creating a pipeline of bankable projects, supported by feasibility studies, project preparation and risk-sharing mechanisms, that will accelerate the pace of investment in pipelines, processing."

Kanayo Awani, executive vice president for intra-African trade and export development at Afreximbank, stated: "By combining Afreximbank's deep expertise in trade and project finance with MDGIF’s national investment reach, we are poised to unlock new opportunities for inclusive growth and sustainable development across Nigeria and, potentially, across the West Africa sub-region."

MDGIF executive director Oluwole Adama added: "[T]his partnership with Afreximbank enables MDGIF to mobilize capital, expand critical midstream and downstream infrastructure, reduce flaring and deliver sustainable energy solutions that power industries, create jobs and improve livelihoods across Nigeria."

The agreement was concluded at the Intra-African Trade Fair, organized by Afreximbank, the African Union Commission, and the African Continental Free Trade Area. The event generated more than $48 billion in trade deals, according to the statement.

Meanwhile, Nigeria’s natural gas production has shown steady growth. The Nigerian Upstream Petroleum Regulatory Commission reported that production rose to 7.59 billion standard cubic feet per day (Bscfd) in July, marking an 8.58 percent increase from the daily average of the previous year and a 9.84 percent rise compared to 2023.

Gas supply to power plants reached a three-month high at 862.86 million scfd, up 3.48 percent from June. The commission also noted that Domestic Gas Delivery Obligation (DGDO) performance stood at 72.5 percent in July, slightly higher than 71.8 percent in June.

From January to July, DGDO performance fluctuated between 70.8 percent and 73.7 percent. During the same period, 35.88 percent of Nigeria’s gas output was exported, 27.82 percent supplied to the domestic market, and 29.13 percent consumed by producers for field and plant operations.

This coordinated effort between MDGIF, Afreximbank, and regulators highlights Nigeria’s strategy to enhance gas infrastructure, strengthen domestic supply, and ensure balanced development of exports and consumption.