In a groundbreaking move that signals a shift in Nigeria’s energy and insurance landscape, AIICO Insurance and NSIA Insurance have joined forces to pilot gas-to-power projects aimed at delivering electricity to underserved communities across the country.
The initiative, already being rolled out in parts of Ogun and Gombe States, underscores a growing trend in Nigeria’s insurance industry: a sector once viewed as passive is now positioning itself as an active driver of national development—especially in the country’s ongoing transition to cleaner, more sustainable energy sources.
From Underwriter to Enabler
Through this strategic collaboration, AIICO and NSIA are not merely providing insurance cover, they are designing bespoke insurance products that address the specific, layered risks associated with gas infrastructure development.
These products include:
- Exploration and Production Risk Insurance to safeguard investments in gas sourcing and prevent business disruptions;
- Pipeline Sabotage and Terrorism Cover to mitigate political and security-related threats in volatile regions;
- Environmental Liability and Cleanup Insurance to address potential ecological damage and ensure compliance with regulatory standards;
- Construction All Risk (CAR) Insurance to protect against delays or disruptions during project implementation;
- Parametric Insurance linked to global gas price benchmarks to stabilize revenue for investors facing market volatility.
Industry experts say these insurance instruments are critical in making gas-to-power projects viable, especially in rural or conflict-prone areas. Without them, financiers are unlikely to back energy projects with high upfront risks.
“These aren’t abstract tools. They determine whether a project gets off the ground or dies on the drawing board,” said a senior executive at AIICO familiar with the pilot.
Real Impact, Real People
For communities like Koton-Karfe in Kogi State, the stakes are high. In 2022, local fish farmer Mohammed Ibrahim lost his business when a small gas-powered mini-grid failed after the pipeline feeding it was vandalized. The infrastructure was uninsured, and no compensation followed.
“I had over 3,000 fingerlings. When the pumps stopped working, they all died. That was my only income,” Mohammed told Seeking the Truth in Facts.
His story illustrates the high human cost of failed infrastructure, and the critical role of insurance in ensuring resilience. With proper coverage, developers and communities can avoid devastating losses and quickly recover from unforeseen setbacks.
Sector Evolution
The pilot project also signals a wider industry shift, as insurers begin taking more active roles in shaping Nigeria’s energy future.
According to the report, Mr. Olusegun Ayo Omosehin, Commissioner for Insurance, emphasized that this synergy aligns perfectly with the vision for a modern insurance sector. He stated that “Insurance must evolve beyond just processing claims, it must become an architect of economic transformation. Our partnership within the energy value chain marks a significant stride in that direction.”
The Commissioner added that such interventions are aligned with the federal government’s energy access goals and the broader push towards achieving net-zero emissions by 2060.
Looking Ahead
If successful, the AIICO-NSIA pilot could serve as a model for scaling gas-powered energy systems to more than 50 underserved locations, particularly in riverine and off-grid areas where other solutions, like diesel and solar, have either proven unsustainable or too costly.
Negotiations are already ongoing with energy developers and local cooperative groups to expand coverage. The long-term vision is to mainstream insurance as a strategic enabler of Nigeria’s energy transition, both in policy and in practice.
As the lights begin to flicker on in remote corners of the country, one thing is clear: Nigeria’s insurance industry is no longer content to follow from behind.
It’s stepping up to lead.
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