Lagos Signs Power Deals to Boost Electricity Supply, Targets Up to 400MW Capacity

The Lagos State Government has taken a significant step toward improving electricity supply by signing new Power Purchase Agreements (PPAs) with three energy firms—Fenchurch Power, Mainland Power, and Viathan Engineering—to generate about 60 megawatts of power in the first phase of a broader energy expansion plan.

Governor Babajide Sanwo-Olu announced that the agreements mark a strategic shift toward a more reliable and efficient electricity system, with plans to scale generation capacity to between 200MW and 400MW over the next two to three years. The initiative is being driven under the Lagos State Electricity Law 2024, in alignment with the Nigerian Electricity Act, and is designed to attract market-driven investments rather than rely solely on public funding.

The agreements were executed at Lagos House, Marina, by the Commissioner for Energy and Mineral Resources, Abiodun Ogunleye, alongside representatives of the partner companies. According to the governor, the goal is to build on existing infrastructure while addressing long-standing inefficiencies in power delivery across the state.

Each company will play a targeted role in strengthening the grid. Fenchurch Power will support critical water facilities, including Adiyan and Iju, ensuring more stable operations in key public utilities. Mainland Power will continue supplying electricity to areas such as Ikeja, Oshodi, and Anthony, with plans to expand coverage. Meanwhile, Viathan Engineering will focus on maintaining and improving power supply across the Island and Lekki corridor, integrating its operations more effectively into the broader distribution network.

A key feature of the new agreements is a shift toward performance-based payments. The state government has made it clear that it will only pay for electricity that is actually delivered and properly metered. This move is expected to reduce waste, improve accountability, and ensure better value for public funds.

Commissioner Ogunleye explained that the current combined generation capacity of the three firms stands at about 60MW, but there are clear plans to scale up significantly through private sector investment. He highlighted that Mainland Power currently operates with an installed capacity of 8.8MW, supplying key facilities such as the Lagos State University Teaching Hospital.

He also noted that the Akute Independent Power Plant, now managed by Fenchurch Power, is undergoing rehabilitation after being dormant for several years. With a contracted capacity of 26MW, the plant is being repositioned as a major energy hub that will serve surrounding communities and critical infrastructure like the Adiyan Water Works.

Viathan Engineering, on its part, will oversee the Peninsula Integrated Power Project, which has a combined installed capacity of 21MW across Lekki and Marina. This project is expected to provide stable electricity to essential government and healthcare facilities, including Lagos Government House and major hospitals on the Island.

With these agreements in place, Lagos is positioning itself for a more resilient and efficient power sector. By combining targeted investments, regulatory reforms, and private sector participation, the state aims to deliver more reliable electricity, support economic growth, and improve the quality of life for millions of residents.