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🇳🇬 Nigeria /Energy & Infrastructure

FG Mobilises $1.02bn for CNG Conversion, Expands Ajaokuta Industrial Park

From ThisDay · () English

Summarized and contextualized by DistantNews.

At a glance

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  • Nigeria has secured over $1.02 billion in investments for its Compressed Natural Gas (CNG) vehicle conversion program, with operations in 24 states.
  • The initiative aims to reduce petrol dependence, lower transport costs, and utilize Nigeria's gas reserves as part of the energy transition strategy.
  • The government is establishing a CNG Industrial Park in Ajaokuta to localize manufacturing and assembly of vehicle components, expanding its initial size significantly.

Nigeria's federal government has mobilized over $1.02 billion in investments to advance its Compressed Natural Gas (CNG) vehicle conversion program. Operations are now active across 24 states, with more than 1,000 vehicles already converted to run on gas. This initiative is a cornerstone of the government's energy transition strategy, designed to lessen reliance on petrol, reduce transportation expenses, and capitalize on the nation's extensive natural gas reserves.

Mr. Olayinka Rufai, Strategic Project Advisor for the Presidential Initiative on Compressed Natural Gas (Pi-CNG), emphasized that local participation is crucial for the program's success, particularly for last-mile deployment. He stated that Original Equipment Manufacturers (ORMs) involved in the initiative are required to transfer technology to Nigerian technicians. While conversion kits are still imported, the government aims to localize the manufacturing of approximately 65 components, including mirrors, seat fabrics, and cylinder assemblies.

It is almost impossible to achieve last-mile deployment without local companies.

— Olayinka RufaiMr. Olayinka Rufai, Strategic Project Advisor for the Presidential Initiative on Compressed Natural Gas (Pi-CNG), highlighted the necessity of local involvement in the program.

To support this localization effort, a CNG Industrial Park has been established in Ajaokuta. This park is intended to serve as a manufacturing and assembly hub for natural gas vehicle components, with a specific focus on localizing cylinder production. Rufai noted that the park's footprint has expanded significantly, now covering more than four times its original 10-hectare plan. The government is also developing robust standards and certification systems to ensure safety and quality within the burgeoning CNG ecosystem.

Furthermore, the Pi-CNG program is collaborating with various entities, including the military, the National Youth Service Corps (NYSC), and regional development agencies, to train thousands of Nigerians in conversion technologies. Discussions are also underway with the Nigerian Railway Corporation to explore transitioning rail systems from diesel to natural gas. To attract investors, the initiative offers incentives such as guaranteed offtake agreements for manufacturers and import duty waivers on CNG-related equipment, aiming to build a sustainable value chain, reduce import dependency, and generate employment.

We are essentially importing a lot of air in those cylinders.

— Olayinka RufaiRufai explained the rationale behind localizing cylinder production to reduce costs and boost industrial growth.
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Originally published by ThisDay. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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