Nigeria’s Richest State Signs Power Deals to Raise Supply to 400MW

Lagos State signed power purchase agreements with three independent electricity producers on Saturday, setting the stage for a dramatic expansion of its captive energy supply from roughly 60 megawatts today to as much as 400 megawatts within three years.

Babajide Sanwo-Olu, governor of Lagos state presided over the signing ceremony, which formalised deals with Mainland Power Limited, Fenchurch Power Limited, and Viathan Engineering Limited, a mix of long-standing partners and a new entrant taking on one of the state’s previously idle power assets.

The agreements signal Lagos’s most ambitious push yet to sidestep Nigeria’s chronically unreliable national grid, which has long constrained economic activity across Africa’s largest city by GDP.

Rather than waiting on federal power reforms that have stalled for decades, the state is doubling down on a decentralised energy model built around dedicated plants serving public infrastructure.

“This agreement is about the people and how easily we can solve problems,” Sanwo-Olu said after the signing. “This marks the beginning of the reforms we are seeing in the energy sector.”

At the center of the expansion is the Akute Independent Power Plant, dormant for five years and now handed to Fenchurch Power Limited under a concession agreement.

The facility carries a contracted capacity of 26 megawatts and will be rehabilitated to serve surrounding communities as well as the upgraded Adiyan Water Works operated by the Lagos State Water Corporation, a linkage that ties electricity access directly to the city’s water supply chain.

Mainland Power Limited, which operates the 8.8-megawatt Ikeja GRA plant under a renewed 10-year deal, currently delivers 5.8 megawatts to a corridor stretching from Ikeja to Oshodi. Key customers include Lagos State University Teaching Hospital and the Lagos State Urban Renewal Agency.

On Lagos Island, Viathan Engineering oversees a combined 21 megawatts across plants in Lekki and Marina, supplying electricity to the State Government House, the deputy governor’s residence, Lagos Island General Hospital, and Lagos Island Maternity Hospital.

Biodun Ogunleye, Lagos commissioner for energy and mineral resources said the deals were structured to revive stranded assets and scale generation without burdening state finances. He said total output is expected to reach between 200 and 400 megawatts over the next two to three years as rehabilitation and upgrades proceed.

Nigeria’s 36 states have increasingly sought independent power solutions as the national grid, with an installed capacity exceeding 13,000 megawatts, routinely delivers less than 4,000 megawatts to consumers nationwide.
Lagos, which accounts for roughly a quarter of the country’s GDP, has positioned energy security as a prerequisite for sustaining its economic primacy.

Representatives of the three firms said the Sanwo-Olu administration had created conditions attractive to private capital, describing the deals as a signal to investors that Lagos is serious about deepening its energy market.