NUPRC’s N373bn Host Community Fund and 536 Ongoing Projects

Nigeria’s oil and gas host communities are reaping tangible benefits from the Host Community Development Trust (HCDT) scheme, as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that over ₦373 billion has been set aside for community development projects, with 536 projects currently ongoing across oil-producing regions.The NUPRC disclosed this in its latest update on the implementation of the Petroleum Industry Act (PIA) 2021, emphasizing that the initiative has transformed the dynamics between oil companies and host communities by promoting inclusivity, accountability, and sustainable development.

According to the Commission’s Chief Executive, Gbenga Komolafe, the host community fund—representing 3% of oil companies’ actual operating expenditure (OPEX)—is part of the PIA’s framework designed to ensure that communities directly benefit from oil and gas production within their territories.

Komolafe explained that since the launch of the scheme, the Commission has made significant progress in registering host community development trusts and ensuring transparent management of funds. “We have so far approved over 178 host community development trusts covering upstream operators, and disbursements have commenced across several assets. The ₦373 billion now committed is being channeled into infrastructure, health, education, and empowerment projects,” he stated.

The NUPRC boss noted that the Commission continues to provide guidance to ensure that the funds are utilized in line with the objectives of the PIA, thereby fostering peace, stability, and shared prosperity in the Niger Delta and other oil-producing zones. He added that the HCDTs were designed to be community-led, allowing residents to participate actively in decision-making regarding project prioritization and execution.

“By empowering host communities to manage their own development through a structured trust mechanism, the PIA has shifted the relationship between oil companies and communities from dependency to partnership,” Komolafe said. “We are seeing improved cooperation and reduced disruptions in oil production as communities now have a stake in protecting the assets.”

According to NUPRC’s data, the 536 ongoing projects cover a wide range of sectors including the construction of rural roads, schools, healthcare facilities, skill acquisition centers, and water supply schemes. Some trusts have also embarked on renewable energy initiatives, youth training programs, and agricultural projects aimed at improving local livelihoods and economic sustainability.

Komolafe disclosed that the Commission is also conducting compliance audits to ensure transparency in fund management. “We are working closely with trustees, settlors, and community representatives to enforce accountability, ensuring that every naira spent delivers value to the people,” he added.

Industry stakeholders have commended the NUPRC’s oversight, describing the initiative as one of the most significant milestones of the PIA’s implementation. The Host Communities Development Trust Fund is seen as a practical mechanism for addressing long-standing grievances about environmental degradation and underdevelopment in oil-rich regions.

Dr. Brown Ogbeifun, an energy policy analyst, noted that the host community fund has already started yielding positive results. “For decades, host communities felt marginalized despite contributing immensely to national revenue. The PIA’s host community provision is now helping to restore trust and reduce the frequency of conflicts and pipeline vandalism,” he said.

Ogbeifun further explained that by legally mandating oil companies to invest directly in their host communities, the government has institutionalized corporate social responsibility. “It’s no longer an ad hoc intervention—it’s a statutory obligation with measurable impact,” he added.

However, challenges remain. Some community leaders have raised concerns about delays in fund disbursement and alleged political interference in project selection. In response, the NUPRC has reiterated its commitment to ensuring fairness, transparency, and strict adherence to governance principles.

“The Commission will not tolerate any form of mismanagement or diversion of host community funds. We have instituted monitoring frameworks to track progress, and sanctions will be applied where necessary,” Komolafe assured.

He also revealed that the NUPRC is developing a digital dashboard to monitor project implementation in real time, enabling stakeholders—including civil society and community members—to track fund utilization and progress reports.

The initiative has also been praised by operators in the upstream oil sector. A senior executive at one of the major International Oil Companies (IOCs), who spoke on condition of anonymity, said the scheme has improved security around oil installations. “Since communities now have a financial interest in sustaining production, there has been a noticeable reduction in sabotage and illegal bunkering incidents,” the executive noted.

In addition, several indigenous oil firms have highlighted how the trust mechanism has improved their relationship with local stakeholders. Projects such as road rehabilitation, scholarship schemes, and microcredit programs have reportedly boosted local economies and fostered goodwill.

Economic experts have also emphasized that the N₦373 billion fund has significant implications for regional development. According to them, effective utilization of these resources could stimulate job creation, enhance human capital, and reduce rural-urban migration, especially among youths.

Despite the progress, the NUPRC acknowledges that more needs to be done to achieve full compliance across all oil-producing assets. The Commission said it is working with the Ministry of Petroleum Resources and the Nigerian National Petroleum Company Limited (NNPC Ltd.) to streamline regulatory processes and ensure that all operators remit their statutory contributions on schedule.

“The long-term vision is to create self-sustaining host communities that can leverage oil revenue for diversified economic growth,” Komolafe concluded. “With accountability, transparency, and effective collaboration, the ₦373 billion fund will mark the beginning of a new era of prosperity for Nigeria’s host communities.”

The progress recorded under the host community fund underscores the PIA’s transformative potential to balance economic growth with social inclusion. As more projects near completion, it is expected that trust between oil firms and host communities will continue to strengthen, fostering an environment of stability and shared development.