The Lagos State Government has taken a major step toward improving electricity supply by signing power purchase agreements with three independent producers.
Newsonspot reports that the move is expected to increase captive power generation from about 60 megawatts to as much as 400 megawatts within three years.
The agreements were formalised on Saturday at a ceremony presided over by Governor Babajide Sanwo-Olu, involving Mainland Power Limited, Fenchurch Power Limited, and Viathan Engineering Limited. The partnership combines both existing operators and new entrants to strengthen the state’s energy capacity.
This initiative represents one of Lagos State’s most ambitious efforts to reduce dependence on Nigeria’s unreliable national grid, which has long limited economic growth in the country’s commercial hub. Instead of waiting for delayed federal reforms, the state is focusing on a decentralised power model designed to serve critical infrastructure directly.
Speaking after the signing, Sanwo-Olu described the agreements as a practical solution to long-standing challenges in the energy sector. He noted that the initiative marks the beginning of meaningful reforms aimed at improving electricity access for residents and businesses.
A key part of the plan is the revival of the Akute Independent Power Plant, which has been inactive for five years. The facility has now been concessioned to Fenchurch Power Limited and is expected to generate 26 megawatts upon rehabilitation. It will supply electricity to surrounding communities and support the Adiyan Water Works, strengthening the link between power and water supply.
Meanwhile, Mainland Power Limited will continue operations at the Ikeja GRA plant under a renewed 10-year agreement. The plant currently supplies electricity to key locations including the Lagos State University Teaching Hospital and the Lagos State Urban Renewal Agency.
On Lagos Island, Viathan Engineering Limited manages power plants in Lekki and Marina, delivering electricity to important government and healthcare facilities such as the State Government House, the deputy governor’s residence, the Lagos Island General Hospital, and the Lagos Island Maternity Hospital.
According to Biodun Ogunleye, the agreements are structured to revive idle assets and expand power generation without placing financial strain on the state. He added that total output is projected to reach between 200 and 400 megawatts within the next two to three years.
With Nigeria’s national grid often delivering less than 4,000 megawatts despite a much higher installed capacity, states are increasingly turning to independent solutions. Lagos, which contributes a significant share to the nation’s GDP, continues to prioritise energy security as a key driver of economic growth.
Industry stakeholders have also described the agreements as a strong signal to investors, noting that the Sanwo-Olu administration is creating a more attractive environment for private sector participation in the energy market.
