Lagos State government reached a significant milestone in its electricity reform agenda on Sunday by signing Power Purchase Agreements (PPAs) and concession arrangements with key Independent Power Producers (IPPs). The ceremony, presided over by Governor Babajide Olusola Sanwo-Olu at Lagos House, Marina, formalized agreements with Mainland Power Limited, Fenchurch Power Limited (in partnership with Aggregate Utilities Limited), and Viathan Engineering Limited. These agreements cover three of the four IPPs deployed by the state to meet its growing electricity needs, bolstering Lagos' drive toward a reliable, sustainable, and efficient electricity market.
Governor's Remarks on Energy Security
Speaking at the event, Governor Sanwo-Olu described the agreements as a defining step in Lagos State's journey toward energy security and economic growth. He stated, "Today's signing marks another major milestone in our commitment to building a resilient and self-sustaining electricity market for Lagos. These partnerships go beyond contracts; they represent our determination to power homes, industries, and critical infrastructure with reliability and efficiency. We are laying a strong foundation for a future where Lagos has the capacity, stability, and independence required to drive sustainable development and prosperity."
New Contract Framework
Commissioner for Energy and Mineral Resources, Mr. Biodun Ogunleye, noted that the agreements have been strategically restructured to align with the evolving electricity market in Lagos. The assets are now positioned as foundational generation anchors within their respective networks, while regulatory processes with distribution companies are being finalized. Under the new contract regime, Lagos State has eliminated legacy commercial models such as "take-or-pay" and "deemed energy," which previously required payments for unutilized or undelivered power. The new framework ensures payments are strictly tied to metered energy delivered at designated supply points, enhancing cost efficiency, transparency, and accountability.
Dual Power Supply for Critical Infrastructure
The state has also introduced dual power supply arrangements for critical infrastructure, ensuring operational continuity and reducing vulnerability to disruptions from third-party constraints. Lagos is projecting a significant scale-up in generation capacity from less than 60MW currently to between 200MW and 400MW within the next two to three years, driven largely by private sector investment and market-based competition.
Details of the Agreements
Mainland Power Plant
With an installed capacity of 8.8MW and a contracted capacity of 5.8MW, the Mainland Power Plant remains a key component of the state's embedded generation network. Located in Ikeja GRA, it supplies electricity to Ikeja, Oshodi, Anthony, and surrounding areas, supporting critical public institutions including LASUTH and other strategic assets. The renewed agreement strengthens a decade-long partnership and secures stable power supply for another 10 years.
Akute IPP
With a base contracted capacity of 26MW and significant expansion potential, the Akute IPP is being repositioned as a major energy hub. Previously inactive for over five years, the plant is undergoing full rehabilitation and upgrade. It is expected to restore power to surrounding communities and support the expanded Adiyan Water Works, a flagship project of the Lagos State Water Corporation.
Viathan Engineering (Lekki & Marina Power Plants)
With a combined installed capacity of 21MW, the Island Power Limited/Peninsula Integrated Power Project serves as a critical backbone for electricity supply on Lagos Island. The plants utilize hybrid and dual-fuel systems to ensure reliability, powering key infrastructure including the Lagos State Government House, the Deputy Governor's Residence, major health institutions, and key commercial hubs.
CEO Commendations
Earlier, the Chief Executive Officers of the respective companies—Mr. Obiora Nwizu, Mr. Olufemi Bakare of Fenchurch Power Limited, and Mr. Oluwaseun Sowunmi—commended the Sanwo-Olu administration for its bold and forward-looking reforms in the power sector.
