Badagry Deep Seaport 2026: What APM Terminals’ MoU Means For Nigeria’s $2.5bn Port Project

APM Terminals has signed a Memorandum of Understanding (MoU) with Badagry Port Development Limited to enter exclusive negotiations for the proposed Badagry Deep Seaport in Lagos. Signed in Copenhagen on 7 September 2026, the MoU is the latest step in a project that received Federal Executive Council approval in 2022 under a 45-year Build-Own-Operate-Transfer (BOOT) public-private partnership framework. At the time, the Infrastructure Concession Regulatory Commission (ICRC) put the project cost at $2.5 billion and projected more than $53 billion in revenue over the concession period. But the legal question is not simply whether an MoU is “binding”. Under Nigerian contract law, that depends on the wording of the document and the parties’ intention. The more important question now is what contractual, land, regulatory and financing protections must be established before the proposed investment can move from exclusive negotiations to commercial and financial close. 

Badagry Deep Seaport: Project Cost, Concession Structure and Economic Potential 

The Badagry Deep-Seaport is a proposed fine on Nigeria’s Lagos coastline, strategically located near the border with Benin. The project is designed around a deep-draft marine approach, with project materials specifying an 18-metre design depth, an aspect that significantly reduces costs compared to other West African ports.

The Federal Executive Council approved this project in 2022 under a Public-Private Partnership (PPP) framework, following the issuance of a Full Business Case Compliance Certificate by the Infrastructure Concession Regulatory Commission (ICRC). Cost estimates have varied, ranging from $2.5 billion at the time of FEC approval to $2.5 billion in recent discussions, reflecting the developments in financing and design. Projected returns are equally impressive, with government forecasts suggesting lifetime revenues exceeding $50 billion within a 45-year Build-Own-Operate-Transfer (BOOT) concession, and Project promoters have projected the creation of about 250,000 jobs over the project’s development and operational lifecycle. 

Legal Protections for Major Infrastructure Investments in Nigeria 

So, what legal mechanisms exist to protect an investment of this scale? A project of this size relies on a comprehensive network of interlocking safeguards. Failing to protect even one layer can lead to significant vulnerabilities:

Nigeria’s PPP Framework: ICRC, FBC and Concession Agreements 

At the heart of the project is the PPP framework established by the Infrastructure Concession Regulatory Commission (Establishment, etc.) Act 2005 (ICRC Act of 2005). For federal PPP projects within the ICRC framework, the transaction typically progresses through business-case development, procurement, FBC review and approval before commercial close and execution of the relevant concession documentation. The PPP process matters because the business case, approvals and concession documentation form the basis on which the project is assessed by government, investors and lenders, even when faced with future administrative changes.

Project Company and SPV Structure for Infrastructure Financing

The project is structured around Badagry Port Development Limited as the project company. An SPV structure can ring-fence project-level liabilities and provide a dedicated vehicle for financing, security and contractual rights, although the extent of any sponsor exposure will depend on the final transaction documents. 

Port Regulation, Federal Powers and Land Rights in Nigeria

The project must also establish a clear and bankable landholding structure. Although maritime regulation and Federal ports fall within Federal competence, the project’s land interests must be traced separately through the applicable land and port framework. Where a statutory right of occupancy is being alienated, Section 22 of the Land Use Act may require the Governor’s consent. The exact requirement will depend on the nature and source of the project’s land interest 

How Nigerian Law Protects Foreign Investors: NIPC Guarantees and Remedies 

Investing in Nigeria can be a promising opportunity, but how does the legal framework protect your capital? Every serious investor should be aware of three crucial statutory guarantees that provide a solid foundation for investment security. 

1. Prohibition of Expropriation

Section 25 of the Nigerian Investment Promotion Commission Act 1995 permits acquisition where it is in the national interest or for a public purpose, under a law providing for fair and adequate compensation and access to the courts. This legislation ensures that your business remains secure from arbitrary government actions, essential for maintaining investor confidence.

2. Unconditional Capital Transferability

Section 24 guarantees specified foreign-investment funds, including dividends, profits, qualifying loan-service payments and proceeds from sale or liquidation, to be transferred through an authorised dealer in freely convertible currency, subject to the section’s terms. No investor wants to face roadblocks when trying to realise profits.

3. Recourse to International Arbitration

Where foreign participation is involved, NIPC registration is an important statutory requirement. Section 20 requires an eligible enterprise to apply for registration before commencing business, and the Act’s definition of an enterprise with foreign participation is tied to registration with the Commission. 

Political Risk Insurance for Infrastructure Projects in Nigeria 

In sophisticated financing arrangements, especially for large-scale projects, political risk insurance is often layered in. Institutions such as the Multilateral Investment Guarantee Agency (MIGA) or export credit agencies Political risk insurance from institutions such as MIGA and export credit agencies can supplement contractual and statutory protections by covering specified political risks, depending on the policy and transaction structure. Political risk insurance can supplement contractual and statutory protections by covering specified political risks.

Key commercial and regulatory risks 

While many celebrate the recent deals, there are potential risks that deserve attention. The issue of concentration poses a significant concern. APM Terminals, currently managing Nigeria’s concessions at Apapa and Onne, is negotiating to also operate the newly proposed Badagry Port. The proposed combination of interests in Apapa, WACT and Badagry also raises a competition-law question. Depending on the final transaction structure, the FCCPC may need to consider whether applicable merger or business-combination rules are triggered and whether the arrangement could substantially lessen competition in a relevant market. If project revenues, tariffs, debt service and major operating costs are denominated in different currencies, the concession and financing documents should clearly address currency, indexation, conversion and adjustment mechanisms. The mismatch in currencies can lead to significant pricing dilemmas, as we’ve seen with the Dangote Refinery’s recent challenges. Addressing these currency questions in the contract is essential to prevent crises that could undermine investor confidence. 

What Investors and Financiers Should Verify Before Financial Close 

For organisations like Badagry Port Development Ltd and government negotiators, the immediate goal should be to transform exclusivity into a solid concession agreement. This agreement must include robust clauses on force majeure, change-in-law, and step-in rights, key elements that lenders will scrutinise before greenlighting the investment.

For APM Terminals and co-investors, clarifying land title and securing state-level consent before making capital commitments is crucial. Additionally, proactively addressing competition concerns can help prevent unexpected regulatory complications later on.

Financiers, insurers, and EPC contractors must prioritize NIPC registration, ensure clarity on currency-of-payment, and structure a comprehensive security package for a Special Purpose Vehicle (SPV) that adheres to Nigerian land law. Standard project finance templates may not suffice, specialist structuring is required.

What the Badagry Deep Seaport Could Mean for Nigeria’s Maritime Sector 

The opportunity represented by Badagry is substantial. Successfully developing this port can significantly decongest Apapa and position Lagos as West Africa’s premier transshipment hub. However, realizing this potential hinges not just on the size of the deal but on the quality of contractual protections in place.

Frequently Asked Questions

1. Is the APM Terminals–Badagry Port MoU legally binding?

The public materials do not provide enough information to determine the enforceability of every provision of the MoU. Under Nigerian case law, an MoU can be binding where its terms demonstrate an intention to create enforceable obligations; its label is not decisive. Conversely, an MoU expressly made subject to a future formal agreement may not amount to a concluded contract. The September 2026 public announcement establishes exclusive negotiations, but the full operative terms have not been publicly disclosed.

2. Does NIPC registration protect foreign investors in Nigeria?

NIPC registration is required for qualifying enterprises with foreign participation before commencing business under Section 20 of the NIPC Act. The Act also contains statutory provisions concerning transfer of investment returns, expropriation and dispute resolution.

3. Does the Governor’s consent apply to Badagry port land?

It may, depending on the legal nature of the land interest involved. Section 22 of the Land Use Act concerns the alienation of statutory rights of occupancy and the requirement for the Governor’s consent. The precise requirements for the project should therefore be determined from the project’s actual landholding and transaction structure rather than assumed from its location alone.

4. Could the APM Terminals arrangement raise competition issues?

Potentially. APM Terminals operates Apapa and WACT in Onne and is also negotiating around the proposed Badagry development. Depending on the final transaction structure and applicable thresholds, the arrangement may require competition-law analysis under the Federal Competition and Consumer Protection Act and the FCCPC’s merger framework.

5. Are foreign investors protected against expropriation in Nigeria? 

Yes. Section 25 of the Nigerian Investment Promotion Commission Act 1995 prohibits nationalisation or expropriation of an enterprise except for a public purpose with fair compensation, and Section 24 guarantees the unconditional transfer of capital, profits and dividends.

6. Who owns the land under a Nigerian port project, the federal or state government? 

Both, in different senses. Ports and harbours are federally regulated under Item 36 of the Exclusive Legislative List, but the land itself is governed by the Land Use Act 1978, held by the relevant State Governor, whose consent is required for any interest in it.

7. Can a foreign investor take Nigeria to international arbitration in a dispute? 

Yes. Section 26 of the NIPC Act grants foreign investors recourse to international arbitration, including under the International Centre for Settlement of Investment Disputes framework, where a dispute cannot be resolved through domestic mechanisms.

8. Why does market concentration matter in Nigeria’s port sector? 

Because a single operator running the dominant share of container gateway capacity, as could result if one company holds Apapa, Onne and Badagry — raises competition concerns the Federal Competition and Consumer Protection Commission is empowered to examine before, rather than after, a deal reaches financial close.