- Lagos signs new PPAs with three IPPs to scale embedded generation, improve reliability, and shift to a market-driven electricity framework.
- The state adopts performance-based contracts and targets up to 400MW capacity, strengthening power supply to critical infrastructure.
The Lagos State Government has signed three Power Purchase Agreements (PPAs) with independent power producers. The plan is to expand embedded electricity generation and improve supply to critical infrastructure. Officials executed the agreements at Lagos House Marina, covering Fenchurch Power Limited, Mainland Power Limited, and Viathan Engineering Limited.
Biodun Ogunleye said the agreements mark a restructuring of the state’s embedded power system. He explained that Fenchurch Power will supply major water facilities in Adiyan and Iju, while Mainland Power will expand services across Ikeja, Ikeja GRA, Oshodi, and Anthony. In addition, Viathan Engineering will strengthen supply to key Island facilities while integrating further with the distribution network.
The state redesigned the agreements to align with current market conditions and support decentralised generation. As part of this shift, Lagos eliminated legacy payment structures such as “take-or-pay” and “deemed energy.” Instead, the government will now pay strictly for metered electricity delivered, reducing inefficiencies and lowering operational costs.
Ogunleye added that Lagos is building redundancy into critical infrastructure by ensuring dual power sources for essential facilities. This approach will reduce disruptions and improve service continuity across government operations.
Babajide Sanwo-Olu said the agreements address gaps in previous arrangements and strengthen accountability. He emphasised that the new contracts tie payments directly to actual electricity supply, ensuring better use of public funds and improved service delivery.
Under the framework, Mainland Power will continue supplying electricity to key areas and institutions, including LASUTH, under a renewed 10-year agreement. Fenchurch Power will rehabilitate the Akute Independent Power Plant to support water infrastructure, while Viathan Engineering will maintain supply to Lagos Island through hybrid and dual-fuel systems.
Lagos projects that generation capacity will scale from under 60MW to between 200MW and 400MW within two to three years. The state plans to achieve this growth through competitive market mechanisms without placing additional strain on public finances.
Through these reforms, Lagos is advancing a broader strategy to decentralise power generation, improve reliability, and build a more sustainable electricity system for critical public assets.