The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, has invested $200m in Seven Energy International, an independent Nigerian integrated oil and gas development, production and gas distribution company.

The investment is a $200m guarantee against the risk of expropriation to Seven Energy’s wholly-owned subsidiary, Accugas, a gas marketing, processing and distribution business in Nigeria, focused on supplying gas to the domestic market through the creation of gas gathering networks and the development of a gas distribution infrastructure.

Accugas owns midstream and distribution infrastructure assets in the Niger Delta and supports upstream activities by enabling oil and gas companies to monetize production from their gas assets.

Phillip Ihenacho, CEO of Seven Energy, said: “MIGA’s involvement is an important part of the financial security package that enables us to invest for the long term in Nigeria’s gas sector—a decision that we expect will be good not only for our business, but also for Nigerian citizens, companies, and the economy as a whole.”

Seven Energy’s processing facility and pipelines have commenced delivering gas to three power stations and two manufacturing plants—and are expected to have a significant development impact in a country suffering from a severe energy shortage due to the lack of infrastructure to bring gas to the domestic market.

Most international oil and gas companies in Nigeria are focused on offshore oil, while gas is often considered a byproduct and re-injected, liquefied for export, or flared.

Yet, despite the country’s enormous natural gas reserves, only one third of power is supplied from the national grid.

Those connected to the grid face multiple daily power cuts and 55% of the population has no energy access.

In response, the Nigerian government created the Gas Master Plan in 2009 to increase the gas supply and jumpstart investments in gas infrastructure through market-based pricing, strengthened regulation, increased contract enforceability, and better-aligned incentives.

MIGA’s backing of Seven Energy forms part of new generation of jointly developed World Bank Group solutions.

In addition to MIGA’s insurance, the World Bank supports the country’s sector reforms while the IFC itself and an IFC-managed fund have jointly invested in Seven Energy in Nigeria.

MIGA’s investment has a strong environmental profile, as Seven Energy’s operations will reduce gas flaring and displace more-polluting fuels such as diesel and biomass.

“On energy, Nigeria is at a crossroads,” said the agency’s Executive Vice President and CEO, Keiko Honda.

“MIGA is very pleased to be part of the country’s efforts to reduce its negative impact on climate change by moving toward cleaner energy and reducing gas flaring,” she said.