Lagos State Signs Landmark Power Purchase Agreement to Strengthen Electricity Supply
On Sunday, Governor Babajide Sanwo‑Olu witnessed the signing of a Power Purchase Agreement (PPA) between the Lagos State government and three independent power producers at Lagos House, Marina. The ceremony, attended by Commissioner for Energy and Mineral Resources Abiodun Ogunleye, marks a strategic move to expand the state’s generation capacity and improve reliability for residents and essential institutions.
Parties to the Agreement
- Mainland Power Limited – operator of the Ikeja GRA Power Plant.
- Akute Independent Power Plant – now managed by Fenchurch Power Limited.
- Fenchurch Power Limited – a new entrant in Lagos’ power‑generation landscape.
The agreement was signed on behalf of the state by Commissioner Ogunleye, while the governor emphasized its people‑centric nature:
“This agreement is about the people and how easily we can solve problems. Let’s keep our promises on both sides. When people benefit, life becomes easier. This marks the beginning of the reforms we are seeing in the energy sector.” – Governor Babajide Sanwo‑Olu, The Sun Nigeria
Projected Impact on Generation Capacity
According to Commissioner Ogunleye, the three participating facilities currently contribute a combined ≈60 MW to the grid. The PPA outlines a phased expansion that could raise total output to between 200 MW and 400 MW within the next two to three years, contingent on successful rehabilitation and upgrade works.
Facility‑Specific Details
- Mainland Power Limited – installed capacity of 8.8 MW, contracted capacity of 5.8 MW, supplying electricity from Ikeja through Oshodi to key users such as Lagos State University Teaching Hospital and the Lagos State Urban Renewal Agency.
- Akute Independent Power Plant (now Fenchurch Power Limited) – contracted capacity of 26 MW. After lying idle for roughly five years, the plant is undergoing renovation and upgrade to serve surrounding communities, including the Adiyan Water Works.
- Island Power Limited/Peninsula Integrated Power Project (operated by Viathan Engineering) – total installed capacity of 21 MW (6 MW in Lekki, 15 MW in Marina). The project is slated to power critical public infrastructure, including Lagos House, the deputy governor’s residence, and Lagos Island General Hospital.
Stakeholder Reactions and Market Signals
Representatives of the participating companies praised the Sanwo‑Olu administration for creating an enabling environment for infrastructure development. They noted that the PPA sends a clear signal to domestic and international investors about Lagos’ readiness to deepen its electricity market and attract sustainable, long‑term investments.
Industry analysts view the agreement as a pragmatic step toward addressing Nigeria’s chronic power deficit, particularly in Lagos — a megacity where demand consistently outstrips supply. By leveraging existing assets and encouraging private sector participation, the state aims to reduce reliance on the national grid while fostering a more resilient power ecosystem for hospitals, schools, and businesses.
Looking Ahead
The success of this PPA will depend on timely execution of renovation works, adherence to contractual obligations, and continued collaboration between the state government and private operators. Monitoring mechanisms and performance benchmarks, as outlined in the agreement, are expected to ensure transparency and accountability, reinforcing trust among consumers and investors alike.
