Udonsak: Bad Contracts Constraining Infrastructure Projects in Nigeria

Nigerian energy infrastructure projects are often stymied not by technical or financial challenges, but by inadequate contract preparation, according to Peter Uzoho, a partner at Dentons ACAS-Law. Uzoho warned oil and gas investors and operators about the risks in Nigeria's energy infrastructure market at a recent summit in Lagos, organized by The Energy Year.

She argued that many projects fail not due to viability, but because deals are built on unsound foundations. Uzoho emphasized that project preparation should precede deal-making, and suggested that sponsors should avoid the common practice of signing term sheets too hastily and bringing in advisors only when the structure is already compromised.

She stressed that proper preparation involves mapping the entire ecosystem from the outset, identifying the regulators, permits, consents, risk-bearers, and compliance requirements. Uzoho urged a shift from risk-shifting to risk-sharing, arguing that in a market where parties frequently attempt to transfer liability to the other party, a collaborative, mutually beneficial approach should be adopted.