Nigeria Plans US$289 Million Cassava Ethanol Plant to Cut Fuel Imports
Nigeria · ENERGY
Key Facts
- —The country Nigeria is Africa’s most populous nation, with about 238 million people. Its economy, about US$291 billion in 2025 by World Bank data, is a little smaller than Finland’s.
- —Why it matters Nigeria is the world’s largest cassava grower, yet it has long imported petrol. Turning the starchy root into fuel ethanol could save scarce dollars and lift farm incomes.
- —Why now On Tuesday 29 September 2026 a federal land agency signed a private deal under a government cassava fuel programme dating from 2023.
- —What happened A federal land agency and 3D NNPC Biofuels Limited agreed on a €256 million (about US$289 million) cassava ethanol plant at Itokin, Lagos State.
- —The numbers The agency offers 200 hectares for the plant and 15,000 hectares of farmland in four south-western states, its chief executive said.
- —What it means for you For investors, this is an early-stage opportunity in farming, logistics and fuel blending. Nothing is built yet, and the agreement is not a binding contract.
- —Still open Who finances the plant, its output capacity and a construction timetable have not been disclosed. Nigeria has no enforced ethanol blending mandate yet.
Nigeria, Africa’s most populous country, has lined up a private partner to turn cassava into fuel. A federal land agency agreed this week to host a planned €256 million (about US$289 million) cassava ethanol plant near Lagos.
A Nigerian government agency has signed an agreement for a cassava ethanol plant at Itokin in Lagos State, the country’s commercial hub. The plan would turn the starchy root crop into fuel for blending with petrol, to cut import bills.
Cassava is a tropical root that feeds hundreds of millions of Africans. Nigeria grows more of it than any other country, yet much of the harvest spoils before it reaches a processor.
What was signed on Tuesday
The Ogun-Osun River Basin Development Authority manages water and land in Nigeria’s south-west. It signed a memorandum of understanding with 3D NNPC Biofuels Limited on Tuesday 29 September in Abeokuta, Ogun State.
The Nation newspaper listed the state oil company, NNPC Limited, as a third signatory. The biofuels firm’s ownership and the link implied by its name were not explained.
The agency will provide 200 hectares at its Itokin site for the plant, its chief executive Adedeji Ashiru said. It will also release 15,000 hectares from its land bank to grow cassava in Lagos, Ogun, Osun and Oyo states.
Under the deal, the agency brings land, water and community support. The company is to supply technical expertise, funding, technology and a guarantee to buy the output, Ashiru said.
The promises and the caveats
Ashiru said the project would create more than 100,000 direct and indirect jobs, from planting and transport to processing. That figure is his projection and has not been independently assessed.
He described the signing as “planting the seed for Nigeria’s energy future, food security and industrial revolution.” The ethanol would be blended into petrol, which Nigerians call Premium Motor Spirit.
A memorandum of understanding is a statement of intent, not a financed project. No plant capacity, investor list or construction timetable was published with the announcement.
The government programme behind it
The deal sits under the Cassava Bioethanol Value Chain Development Project. Nigeria’s Federal Executive Council, the cabinet, approved it as a concession in April 2023, under former president Muhammadu Buhari.
Financing was put at ₦11.9 billion (about US$9 million at today’s rate) from a federal grant and the concessionaire. At the 2023 exchange rate that sum was worth about US$25.8 million, according to ESI Africa.
The pilot phase planned biotechnology parks on 20-hectare plots at 20 universities, to supply better cassava stems. The Ministry of Budget and Economic Planning now runs the programme under President Bola Tinubu.
The ministry says the project aims to bring about 14 million smallholder farmers into the cassava industry. It held training workshops in Enugu in January and in Nasarawa State on 11 and 12 March 2026.
Why Nigeria wants cassava ethanol
Planning Minister Abubakar Bagudu said in January that ethanol blending could save over ₦3 trillion (about US$2.3 billion) a year. That is a government foreign-exchange estimate, not an audited result.
Officials also say post-harvest losses waste about 40 percent of the cassava value chain. Fast processing near farms is meant to cut that, because the root rots within days of harvest.
The ministry also wants value from starch, carbon dioxide captured during fermentation and animal feed made from leftover distillery grain. The 2007 national biofuels policy set a long-term goal of 10 percent ethanol in petrol.
A long record of stalled plans
Nigeria has tried this before: in 2017 the state oil company announced a biofuel plant in Ondo State. Its wider biofuels push later fell well short of its targets.
Petrol supply has also changed since 2023. The giant Dangote refinery near Lagos supplied more of Nigeria’s petrol than importers did in August, regulator data show. That weakens the import-saving case for ethanol somewhat.
What it means for foreign readers
For investors and agribusiness firms, the Itokin plan points to openings in seed supply, farm machinery, transport and distillery equipment. Any commitment should wait for a financed, contracted project.
For anyone doing business in Nigeria, the deal signals the government’s wish to put idle public land to commercial use. It fits a wider African push to process crops at home, covered in Africa: The New Scramble.
What to watch next
The key test is whether the €256 million (about US$289 million) plan moves from a signed memorandum to financed construction. A published investor, plant capacity and start date would be the first signs.
Another signal would be an enforced ethanol blending rule for petrol, which would guarantee demand. Until then, Nigeria’s cassava fuel plans remain an ambition with early private interest.
Conversions in this article use open.er-api.com rates for 2 October 2026: ₦1,328 and €0.887 per US dollar.
Frequently Asked Questions
What did Nigeria sign on 29 September 2026?
The Ogun-Osun River Basin Development Authority and 3D NNPC Biofuels Limited signed a memorandum of understanding in Abeokuta. It covers a planned €256 million (about US$289 million) cassava ethanol plant at Itokin, Lagos State.
How much land is involved?
The agency says it will provide 200 hectares for the plant and 15,000 hectares to grow cassava. The farmland is spread across Lagos, Ogun, Osun and Oyo states.
How much could Nigeria save?
Minister Abubakar Bagudu said in January 2026 that blending could save over ₦3 trillion (about US$2.3 billion) a year in foreign exchange. This is a government projection, not an independent estimate.
When will the plant produce fuel?
No date has been given. The agreement is a memorandum of understanding, and financing, capacity and a construction timetable have not been disclosed.
Connected Coverage
Sources
- punchng.com
- thenationonlineng.net
- nationalplanning.gov.ng
- nationalplanning.gov.ng
- esi-africa.com
- data.worldbank.org
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