PIA: Development Trust Fund lifts host communities

The introduction of Host Communities Development Trust in the Petroleum Industry Acts (PIA) has given leeway to the oil and gas host communities, which prior to this time were crying for marginalization and abandonment.

Most host communities in the Niger Delta region are now celebrating projects, scholarships, training for indigenes and even declaring excess funds from the development trust.

Daily Trust reports that section 235 of the Petroleum Industry Act of 2021, mandates settlors (oil companies) to incorporate Host Community Development Trust for the benefit of host communities where they operate.

The HCDT requires oil companies to deposit 3% of their operating expenditures of the preceding financial year into a trust fund which will be housed in a bank with BBB rating.

The PIA further stipulates that the settlor shall for the purpose of setting up the trust, in consultation with the host communities, appoint a board of trustees which shall be registered by the Corporate Affairs Commission as a corporate body.

The oil company then undertakes a NEEDS assessment that will metamorphose into the community development plan for the purpose of determining the projects that will be executed.

The funding source for the host community trust comes from oil companies’ operating expenditures from the preceding year, specifically for upstream petroleum operations affecting the host communities.

These funds are dedicated to community development projects such as infrastructure, education, healthcare, environmental protection, and socio-economic development, and it is managed by a Board of Trustees appointed by the oil companies.

Also, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) monitors the implementation and compliance of this fund through a system called Host Comply.

Several projects including; water, scholarship, entrepreneurship training, business supports among others have been executed through this Development Trust Funds since 2021.

Bayelsa KEFFESO Devt Trust Reports N15.2bn Surplus

For instance, the KEFFESO Host Communities Development Trust (HCDT), in partnership with NNPC Limited/First Exploration and Petroleum Development Company (First E&P), during its inaugural Annual General Meeting (AGM), reported a surplus of N15.259 billion for the period from November 2023 to October 2024.

According to the Finance, Audit, Accounts, and Risk Committee, the trust recorded a total income of N15.635 billion while incurring expenses of N375.5 million.

At their annual general meeting held in Yenagoa under the theme “Advancing Accountability and Sustainable Growth,” featured remarks from NNPCL Group CEO, Engr. Bashir Ojulari, who described the HCDT as “the cornerstone of our common goal, a platform that ensures development is community-led, participatory, and sustainable.”

Represented by Chief Upstream Officer, Mina Loveday, Ojulari highlighted accountability, documentation, and sustainability as key principles driving the trust’s success.

Fund hits N373bn in October – NUPRC

Already, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently stated that the Host Community Development Trust (HCDT) has risen to N373bn as of October 13, 2025 with 536 community projects ongoing simultaneously.

A statement by NUPRC’s Head, Media and Strategic Communications Eniola Akinkuotu, said the fund comprises N125bn and $168.9m.

The fund is often dedicated to community development projects spanning infrastructure, education, healthcare, and environmental protection.

While the NUPRC does not have direct access to the funds, it monitors the fund through the HostComply dashboard. The Commission also monitors the implementation of the fund as mandated by the extant laws.

It said the milestone marks a defining moment in the implementation of the HCDT provisions under Section 235 of the Petroleum Industry Act (PIA) 2021 and stands as a testament to the NUPRC’s commitment to delivering on its mandate.

“The projects delivered include demolition and construction of two-storey building classroom blocks with 18 fully furnished standard classrooms size of 56 square metres UBEC standard at Ogbogu Community, Ogba Egbema Ndoni LGA; remodelled Ogbogu Cottage Hospital with 20 beds capacity and a new newly constructed diagnostic centre and revatalisation and infrastructure upgrade of 1200 capacity Ogbogu Ultra Modern Civic Centre in Ogbogu community, Ogba Egbema Ndoni LGA, among others.

It said these projects were developed based on the needs and priorities defined by the communities themselves, in line with the Host Communities provisions of the PIA, 2021.

Host communities speak

Some people from the host communities in Bayelsa and Rivers State who spoke with Daily Trust expressed happiness over the provision in the Petroleum Industry Acts, urging the government to endeavour to enforce the oil companies to comply in remitting the 3%.

Mr. Thankgod Andrew from Southern Ijaw local government area of Bayelsa State, told Daily Trust that since the enactment of the PIA, they have seen some laudable projects and infrastructural upgrade in their communities, calling for proper utilization of the fund.

Andrew, who stays in Yenagoa, stated that he has seen award of scholarships to the people of his community through the trust funds, upgrade in school facilities and business support to traders among others.

Also speaking on the impacts of the Host Community Trust Funds, National Chairman of Host Community Trust Fund, High Chief Benjamin Style, said the trust has helped the communities to initiate and execute their projects and to tackle most of the environmental challenges.

He stated that over 200 projects are ongoing simultaneously across the host communities unlike before.

He said: “Trust fund has really helped, within this administration so far, upon the passage of the PIA, host communities in Niger Delta are smiling to the bank, it’s unlike before over 60 years, communities were deprived, neglected, communities were not part of the system, with the PIA law enacted in 2021, the impact has been felt by almost all the communities that are producing oil and gas in the Niger Delta.

“The first impact is that communities are doing their projects by themselves, funds are directed to communities properly, communities decide which project is best for them, over 200 projects are ongoing across board simultaneously, some have been commissioned in September. In Rivers State alone, Ogba-Egbema-Ndoni

local government area, a lot of massive projects were commissioned, that is the impact that we had not seen before as oil producing communities.

“Niger Delta will be at this level, this is just at three percent, though we are arguing about 10 per cent, but this three percent is impacting. So we want the federal government to further increase the funds to five percent, that was all we agreed before, because we need more money to take care of our environmental issues, roads have been built by communities now, they are not waiting for government, they are not waiting for the oil companies to do, but it has been conceived by the communities.

“In the long run, the PIA has come to bless the Niger Delta, which is the oil producing community. On our part, we should do our own to safeguard the facilities, because if there is more production, more money will come to the community, for those three years over N300 billion has come to host Communities, with that fund in the next few years, the entire Niger Delta will be lit up.”

Similarly, the Chairman of the Board of Trustees of KEFFESO HCDT, King Moses Theophilus, said though about 70 percent of Host Community Development Trust have not been formed and funded, it helped in executing several projects for those who have formed their own.

He said: “Since the enactment of PIA, through the operations of the regulatory agency called the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), through which most of these trusts are formed in the companies, now, till today, a lot of communities or oil companies have not really formed their trust fund, not to talk about contributing the three percent, in some few cases, there are few companies that are able to form their trust.

“KEFFESO Trust has been inaugurated two years ago, and some have collected up to date, if you talk about the generality where about 70% of the trust have not been formed, the impact is not enough, because majority of the trust have not been formed, nomination of board of trustees, nomination of members and other requirements have not been done.

“In KEFFESO, we have done a lot of projects in the communities and other projects are ongoing, the money received so far is bigger than the money that it used to be, so it has been very impactful.

“Generally, if all the trusts are being formed, and all the trusts are being funded, I think the aims of this PIA would have been more impactful than what it is today.

“We are already getting the impacts of what the PIA is driving to achieve, but in the case of First E&P called the KEFESO Community Development Trust, it has been impactful.

“A lot of the companies are defaulting in funding the trust, the regulatory agencies should be very hard on them and punish those companies that are defaulting,” he said

Recently, the House of Representatives resolved to investigate some oil and gas producing companies operating in Nigeria over their alleged failure to release the 3% of their annual operating expenditures to host communities and refusal to establish the Host Communities Development Trust Fund (HCDTF) as mandated by the Petroleum Industry Act (PIA) 2021.

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