Josephne Udonsak Warns on Contract Risks in Nigeria's Energy Sector

Josephne Udonsak, a partner at Dentons ACAS-Law, addressed oil and gas investors at a summit in Lagos organized by The Energy Year. She highlighted that the primary risk in Nigeria's energy infrastructure market is not related to materials or financing but stems from poorly prepared contracts.

Udonsak pointed out that many energy, transport, and power projects fail not due to unviability but because they are built on inadequate contractual foundations. She stressed the necessity of project preparation before deal-making, urging sponsors to avoid rushing into signing term sheets without proper advisory input.

Key questions regarding regulators, permits, risk allocation, and compliance must be addressed early to prevent financing failures. Udonsak advocated for a shift from risk-shifting to risk-sharing, promoting a collaborative approach in a market where parties often attempt to transfer all liability to others.