Renewable Energy Disputes and Arbitration in West Africa: Nigeria, The Case Study

Traditional sources of energy have fallen short on meeting global demands on inclusiveness, sustainability, and reduction of carbon emissions footprint, particularly as regards areas with little penetration of technology and a high poverty index, and a world teetering on the edge of global warming. Against that backdrop, renewable energy has arguably emerged as the successor of traditional sources of energy, with its ability to meet most of these demands. Without any surprise, the recent deep activity in this sector has thickened the possibility of disputes arising from renewable energy projects. This chapter is mainly focused on the disagreements and conflicts related to the use of renewable energy in West Africa, rather than providing a comprehensive overview of the entire concept of renewable energy. The nucleus of this chapter therefore is to explore the growing importance of arbitration in resolving renewable energy disputes in West Africa, with a particular focus on Nigeria. This chapter, also in detail, examines the legal framework for renewable energy development in Nigeria and the challenges faced by stakeholders in the industry. The chapter analyses the role of arbitration as an effective alternative dispute resolution mechanism in resolving disputes related to renewable energy projects: Environmental, Social, and Governance (ESG) considerations in bilateral investment treaties (BITs); the Nigeria Energy Transition Plan (ETP); core challenges faced in the ETP; financing pathways; renewable energy treaties; investor-focused disputes and the International Centre for the Settlement of Investment Disputes (ICSID); and action points. The chapter concludes that while arbitration has the rare potential to promote investment and development in the renewable energy sector in Nigeria, there remain obstacles to its implementation, such as the moribund nature of its laws. This chapter recommends the adoption of a more efficacious legal framework for arbitration in the country, the standardization of contracts to reduce the likelihood of disputes, ETP-focused BITs, and the creation of specialized energy arbitration institutions.