FG Mobilises $1.02bn for CNG Conversion, Expands Ajaokuta Industrial Park

Peter Uzoho 

The federal government has mobilised over $1.02 billion worth of investment to push  Nigeria’s Compressed Natural Gas (CNG) vehicle conversion programme, with operations now running in 24 states and more than 1,000 vehicles converted to run on gas.

The update was given by Strategic Project Advisor for the Presidential Initiative on Compressed Natural Gas (Pi-CNG), Mr. Olayinka Rufai, during an industry  discussion on opportunities in the CNG and electric vehicle conversion space.

The Pi-CNG programme is a key part of the government’s energy transition strategy to reduce petrol dependence, lower transport costs, and leverage Nigeria’s abundant natural gas reserves.

Rufai said the scale of last-mile deployment made local participation unavoidable.  

“It is almost impossible to achieve last-mile deployment without local companies,” he stated, adding that all Original Equipment Manufacturers (ORMs) under the initiative were mandated to transfer technology to Nigerian technicians.

While conversion kits are still imported, Rufai said about 65 components can be manufactured locally, including mirrors, seat fabrics, and cylinder assemblies. To drive this, the government has established a CNG Industrial Park in Ajaokuta as a manufacturing and assembly hub for natural gas vehicle components, with plans to localise cylinder production. We are essentially importing a lot of air in those cylinders,” Rufai said, arguing that local production would cut costs and boost industrial growth. 

According to him, the park, originally planned on 10 hectares, has now expanded to more than four times its initial size.

He said the government is also building standards and certification systems to ensure safety and quality in the growing CNG ecosystem. 

He said the National Automotive Design and Development Council (NADDC) has developed National Occupational Standards and certification frameworks for conversion technicians, with the Standards Organisation of Nigeria (SON) responsible for certifying imported equipment.

Rufai said Pi-CNG has partnered with the military, National Youth Service Corps (NYSC), and regional development agencies to train thousands of Nigerians in conversion technologies, and that discussions were also underway with the Nigerian Railway Corporation to transition rail systems from diesel to natural gas.

To attract investors, he said the initiative was offering incentives including guaranteed offtake arrangements for manufacturers in the industrial park and import duty waivers on CNG-related equipment.

Rufai said the goal was to build a sustainable value chain that reduces reliance on imported components and creates jobs.