Manny Ita –
The Lagos State Government has formalised new Power Purchase Agreements (PPAs) and concession arrangements with three independent power producers as part of a broader push to significantly expand electricity generation capacity across the state.
The agreements, signed at Lagos House in Marina under the supervision of Governor Babajide Sanwo-Olu, involve Mainland Power Limited, Fenchurch Power Limited in partnership with Aggregate Utilities Limited, and Viathan Engineering Limited. These transactions cover three of the four independent power plants (IPPs) under the state’s embedded generation programme.
According to the government, the initiative is designed to scale Lagos’ current generation capacity—estimated at less than 60MW—to between 200MW and 400MW within the next two to three years, largely driven by private sector investment.
Governor Sanwo-Olu described the agreements as a major milestone in the state’s long-term energy reform strategy, emphasizing their role in improving power reliability for households, businesses, and critical infrastructure.
“These partnerships represent our determination to power homes, industries and critical infrastructure with reliability and efficiency,” he said. “We are laying a strong foundation for a future where Lagos has the capacity and independence required for sustainable development.”
Also speaking, the Commissioner for Energy and Mineral Resources, Biodun Ogunleye, noted that the agreements have been restructured to align with the state’s evolving electricity market framework.
“From a current capacity of less than 60MW, we see these plants scale up to over 200-400MW in 2-3 years without draining the treasury but competing in the marketplace to provide sustainable energy to our citizens,” he said.
Ogunleye further explained that the new framework eliminates legacy contractual models such as “take-or-pay” and “deemed energy,” which previously required payments for unused electricity. Under the revised structure, payments will now be strictly tied to metered energy delivered at designated supply points, improving transparency and cost efficiency.
The state is also introducing dual power supply systems for critical infrastructure to enhance reliability and reduce outages.
As part of the broader plan, Mainland Power will continue supplying electricity to parts of Ikeja, Oshodi, and Anthony, including key public institutions like LASUTH, while the Akute IPP is undergoing rehabilitation to support water infrastructure and surrounding communities. Meanwhile, Viathan-linked plants on Lagos Island will maintain hybrid power supply to key government and commercial assets.
The reforms reflect Lagos’ ongoing efforts to reduce dependence on the national grid and build a more self-sustaining electricity market, following regulatory changes that now allow states greater control over their power sectors.
