Nigeria’s Energy Transition at Risk: Can It Survive Shrinking Climate Aid?

At COP28, Nigeria reaffirmed its commitment to achieving net-zero emissions by 2060. Like many developing nations, it entered the talks with bold ambitions: expand renewables, cut emissions, and secure the financing to make it all possible. But as COP29 approaches, those ambitions are colliding with a more sobering reality that international aid is drying up. Across Europe, donor countries are quietly pulling back. The UK, France, and the Netherlands have slashed their aid budgets, citing domestic pressures and shifting priorities. The era of open-ended climate support is giving way to tighter budgets and more cautious donors. This shift raises urgent questions for Nigeria, which relies on external funding for over 90% of its climate financing. What happens when the money slows down, but the goals remain the same? Can Nigeria still deliver on its energy transition targets? Or will it remain caught in a cycle of pledges without follow-through? The country’s Energy Transition Plan needs over $10 billion in upfront investment, yet domestic contributions remain minimal. The challenge isn’t just securing new pledges, it’s about proving the country can deliver, even with less.

The Global Funding Shift – What Shrinking Foreign Aid Means for Africa

For years, many African countries structured their climate ambitions around the promise of international support. That promise is now being quietly scaled back. Several European nations once leading contributors to global climate finance are significantly reducing their aid budgets. The UK plans to lower its aid spending from 0.5% of national income to 0.3% by 2027, while simultaneously increasing defense spending. Despite growing domestic political pressure, France has slashed its aid budget by 37%. The Netherlands has cut its contribution by 30%, redirecting funds to projects aligned with its economic interests. The message is clear: global priorities are shifting, and climate aid is no longer guaranteed. This retrenchment is happening just as developed countries set even more ambitious climate finance goals of $300 billion annually by 2035, and a broader long-term target of $1.3 trillion. Yet for many developing nations, these figures feel increasingly symbolic. On the ground, access to funding remains uncertain, and the gap between commitments and delivery is widening. The impact is already visible. Countries like Zambia and Bangladesh are struggling to manage climate risks floods, droughts, and rising heat with fewer resources. Without adequate support, progress on green energy and resilience-building is stalling. Many simply cannot fund these transitions from domestic budgets alone. Heading into COP29, the tone is more restrained. Donors ask tougher questions, scrutinize outcomes, and pull back from large-scale pledges without clear returns. For countries like Nigeria, this isn’t just a diplomatic shift, it’s a financial reckoning. With most of its energy transition plans still heavily dependent on external funding, the stakes are higher than ever.

Nigeria’s Energy Transition: Can It Withstand This Shift?

Nigeria’s climate ambitions of achieving net zero by 2060 and 30% renewable energy by 2030 face a major obstacle: funding. Just 4.7% of its climate financing is domestic. The rest, largely concessional loans from international partners, is now at risk as donor countries scale back aid. Yet, the country needs $177 billion annually, far more than the $704 million it currently receives each year. The strain is already visible in Nigeria’s policy landscape. The Renewable Energy Master Plan (REMP), launched to scale renewable access, has made some progress programs like Solar Power Naija have connected over 500,000 households. But that’s still a fraction of what’s needed, with 43% of Nigerians lacking electricity access. And with these programs depending on global partnerships, any disruption in aid puts their future in jeopardy. The Energy Transition Plan (ETP) outlines clear goals for clean energy growth, but implementation has been slow. Delays in solar rollouts and an overreliance on loans make it vulnerable to funding shifts. Similarly, the Petroleum Industry Act (PIA), while meant to modernize the oil sector, does little to advance renewable energy. Its focus remains on fossil fuels, creating a policy mismatch with Nigeria’s climate commitments. Even institutions meant to coordinate climate action, like the National Council on Climate Change, are underfunded. Without strong local financing and clearer implementation pathways, Nigeria’s transition could stall. In short, as climate aid contracts, Nigeria’s dependency on external funding exposes the fragility of its energy transition. The existing policy frameworks show promise but lack the backing to deliver results. Without urgent reforms and domestic strategy alignment, these goals risk becoming another set of unmet targets.

The Institutional Reality Check

Nigeria has made bold climate commitments but achieving those targets requires more than plans on paper. The real test lies in execution, and here, the country faces an entrenched problem: institutional gridlock that makes climate action harder, slower, and often less effective than it should be. At the heart of this issue is the fragmentation of responsibilities among key agencies. The Petroleum Industry Act (PIA), passed in 2021 to reform the oil and gas sector, created two regulatory bodies: the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Both claim jurisdiction over methane mitigation and gas flaring, often issuing overlapping guidelines without clear coordination. This has left operators confused, delayed investments in cleaner technologies, and weakened enforcement. Meanwhile, the Rural Electrification Agency (REA) is pushing forward with off-grid solar solutions to increase energy access and reduce emissions. But while REA builds solar mini-grids and distributes solar home systems, federal policies continue to support gas expansion as a “transition fuel.” That contradiction of promoting renewables while doubling down on fossil fuels sends mixed signals to investors and slows the momentum of clean energy. The National Council on Climate Change (NCCC) was introduced to coordinate all these moving parts. However, it lacks the resources and authority to enforce alignment across ministries and agencies. Over 20 climate-related policies exist today, many operating in silos with little synergy or follow-through. As a result, Nigeria’s climate governance feels less like a unified strategy and more like a patchwork of disconnected efforts. This lack of cohesion is more than a bureaucratic flaw, it’s a risk. With international donors now prioritizing “value for money” and demanding clearer results, Nigeria’s ability to attract funding hinges on credible, streamlined governance. Without urgent reforms to harmonize mandates and resolve policy contradictions, the country risks falling short on both its climate targets and its place at the global table.

What Nigeria Can Do Differently

Nigeria must move beyond reactive participation in global climate talks to meet its climate and energy goals and focus on domestic alignment, stronger negotiation strategies, and sustainable financing mechanisms. Central to this shift are the National Council on Climate Change (NCCC) and the Rural Electrification Agency (REA), both of which have the mandate but not yet the structural backing to lead Nigeria’s climate response. First, Nigeria should prioritize grant-based financing over debt-driven mechanisms. While COP29 promises $300 billion annually in climate finance by 2035, existing mechanisms like the Loss and Damage Fund remain severely underfunded. Nigeria should push for targeted allocations to vulnerable nations like itself, especially for responding to climate-induced disasters. Debt-for-climate swaps, which have been proposed globally, are largely unsuitable given Nigeria’s $108 billion debt burden. Instead, the NCCC should advocate for debt relief tied to climate investments, ensuring the country retains fiscal space for local adaptation and renewable energy projects. Second, Nigeria must confront its fragmented climate governance. Agencies like NUPRC and NMDPRA operate under overlapping mandates, especially concerning gas regulation and methane mitigation.

These overlaps create operational delays, regulatory uncertainty, and stalled investment. The NCCC must assert a stronger coordinating role aligning programs like the Gas Flaring Commercialization Programme with REA’s solar mini-grid rollouts to present a unified energy transition strategy. Synchronizing existing policies like the Petroleum Industry Act, the Renewable Energy Master Plan, and the Energy Transition Plan will be key. Third, Nigeria must strengthen domestic funding capacity. REA’s success in deploying over 1.6 million solar home systems highlights the potential of local implementation. Scaling this effort will require green bonds and public-private partnerships, modeled after initiatives like Solar Power Naija. Countries like Ghana and Senegal have demonstrated how sovereign green bonds and local capital mobilization can significantly boost energy access. Nigeria must follow suit, reducing its reliance on volatile external loans. Finally, at COP29, Nigeria should advocate for transparent financing frameworks, gender-responsive funding, and compensation for fossil phaseouts that could leave national assets stranded. With strategic negotiation, policy coherence, and domestic reform, Nigeria can turn international pledges into actionable outcomes and reduce its vulnerability to climate shocks and financial instability.

Conclusion

Nigeria must reduce its reliance on external aid and strengthen its domestic climate strategy. This means empowering the NCCC to coordinate policy, streamlining overlapping agency roles, and creating a national climate fund backed by green bonds and carbon levies. At COP29, Nigeria should advocate for grant-based finance and debt relief tied to climate action. Without these reforms, implementation gaps will widen and global pledges will remain out of reach. The time to restructure is now, before donor fatigue deepens.