Analysis of Gas Sector Investment Climate and Financing Challenges in Northern Nigeria

Attracting private investment in gas infrastructure development in northern Nigeria requires overcoming a distinctive set of commercial, security, and market development challenges that differ substantially from the investment environment in the gas-producing Niger Delta region. This study analyses the gas sector investment climate and financing challenges in northern Nigeria, focusing on the North West and North Central geopolitical zones where planned gas pipeline extensions and industrial gas supply projects face persistent financing gaps. The research employs a mixed-method professional analysis, combining structured interviews with investment officers at development finance institutions, commercial banks, and gas infrastructure developers, alongside review of project feasibility studies and financing term sheets for three stalled gas infrastructure projects in Kaduna, Kano, and Abuja. Investment climate parameters assessed include market size and demand certainty, regulatory risk perception, security risk premium, currency and inflation risk, feedstock supply security, and the availability of government risk mitigation instruments. Findings indicate that demand uncertainty, linked to the nascent state of industrial gas markets in the north, and security risk perceptions are the primary investment deterrents cited by financiers, followed by the absence of pipeline feedstock supply security. Recommendations include development of government-backed gas demand aggregation programmes for northern industrial zones, enhanced security investment in pipeline corridor protection, and creation of a dedicated gas infrastructure development guarantee fund under the Nigerian Sovereign Investment Authority (NSIA). Keywords: gas investment, financing, northern Nigeria, infrastructure, investment climate.