Sanwo-Olu’s energy giant steps: Powering a megacity for the future
For decades, Nigeria’s power sector has remained one of the most stubborn impediments to economic growth and social development. From erratic supply to aging infrastructure, the challenges have been both
- By Emmanuel Olaosebikan
For decades, Nigeria’s power sector has remained one of the most stubborn impediments to economic growth and social development. From erratic supply to aging infrastructure, the challenges have been both systemic and deeply entrenched. Nowhere are the consequences more evident than in Lagos, Africa’s largest city economy and one of the fastest-growing megacities in the world. With its teeming population estimated to be over 25million people, expanding industrial base, and rising urban demands, Lagos has long required a bold, pragmatic, and forward-looking energy strategy.
Under the leadership of Babajide Sanwo-Olu, that strategy is increasingly taking shape, as a series of deliberate, practical steps aimed at achieving energy sufficiency. The recent signing of a 60-megawatt Power Purchase Agreement (PPA) with three private firms marks yet another milestone in what can be described as a quiet but transformative energy revolution in the state.
Nigeria’s electricity sector has historically been plagued by underinvestment, regulatory bottlenecks, and inefficiencies in generation, transmission, and distribution. Despite multiple reforms at the federal level, power supply has remained inconsistent, forcing businesses and households to rely heavily on alternative energy sources, particularly diesel and petrol generators.
Lagos, as the commercial nerve centre of the country, bears a disproportionate burden of this inadequacy. The cost of unreliable power is measured not just in naira but in lost productivity, reduced competitiveness, and diminished quality of life. Recognising this, the Sanwo-Olu administration has adopted a subnational approach, leveraging new legal frameworks and private sector partnerships to take greater control of the state’s energy future.
The signing of Power Purchase Agreements with Fenchurch Power, Mainland Power, and Viathan Engineering represents a significant step in addressing immediate power needs while laying the foundation for long-term expansion.
Under the arrangement, Lagos will secure approximately 60MW of electricity generation capacity, with clear plans to scale up to between 200MW and 400MW within the next two to three years. This is not merely an incremental increase; it is a strategic intervention designed to stabilise power supply to critical infrastructure and public institutions.
Each of the partner firms plays a distinct role in this emerging energy ecosystem. Fenchurch Power is positioned to support major water facilities such as Adiyan and Iju, ensuring that essential services dependent on electricity operate efficiently. Mainland Power, already serving key areas like Ikeja, Oshodi, and Anthony, will expand its footprint, while Viathan Engineering will maintain and enhance supply to the Island and Lekki corridors.
These targeted interventions reflect a nuanced understanding of Lagos’s energy geography, prioritising areas with high economic and social impact.
One of the most innovative aspects of the new agreements is the shift to a performance-based payment system. The state government has made it clear that it will no longer pay for power that is not delivered. Payments are now tied strictly to actual, metered supply.
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This marks a departure from past arrangements that often led to inefficiencies and financial leakages. By aligning payment with performance, Lagos is introducing a level of accountability that has long been absent in Nigeria’s power sector. It also sends a strong signal to investors: the state is committed to transparency, efficiency, and value for money.
In practical terms, this model reduces waste, improves cost management, and ensures that public funds are deployed more effectively. It is a reform that could serve as a template for other states seeking to optimise their energy investments.
Beyond new investments, the Sanwo-Olu administration is also focused on revitalising existing infrastructure. A case in point is the Akute Independent Power Plant, now operated by Fenchurch Power.
Once dormant for nearly five years, the plant is undergoing rehabilitation and upgrades under a long-term operational agreement. When fully restored, it is expected to become a major energy hub, supplying electricity not only to waterworks but also to surrounding communities.
This approach, combining new capacity with the rehabilitation of idle assets, demonstrates a pragmatic use of resources. It avoids the high costs and long timelines associated with building entirely new infrastructure while delivering quicker results.
A defining feature of Lagos’s energy strategy is its focus on critical public infrastructure. Hospitals, government facilities, and waterworks are among the primary beneficiaries of the new power arrangements.
For instance, Mainland Power currently supplies electricity to strategic institutions such as the Lagos State University Teaching Hospital. Similarly, Viathan Engineering’s operations will ensure stable power for key facilities on the Island, including Government House and major healthcare centres.
The implications are profound. Reliable electricity in hospitals can mean the difference between life and death. In water facilities, it ensures consistent supply to millions of residents. By prioritising these sectors, the government is directly improving the quality of life for its citizens.
These developments are underpinned by the Lagos State Electricity Law 2024, a forward-thinking piece of legislation that aligns with the broader Nigerian Electricity Act. The law provides the legal framework for subnational participation in electricity generation, distribution, and regulation.
This is a critical enabler. For years, the centralised nature of Nigeria’s power sector limited the ability of states to take independent action. With the new legal framework, Lagos can now design and implement policies tailored to its unique needs.
The result is a more flexible, responsive, and market-driven energy ecosystem that encourages private sector participation while maintaining public oversight.
The benefits of improved power supply extend far beyond infrastructure. For businesses, reliable electricity reduces operating costs, enhances productivity, and boosts competitiveness. For households, it means less reliance on generators, lower energy expenses, and improved living conditions.
Moreover, the planned scale-up to 200–400MW has the potential to significantly alter the economic landscape of Lagos. It could attract new investments, support industrial growth, and create jobs across various sectors.
In a city where time lost in traffic and power outages translates directly into economic losses, the impact of these reforms cannot be overstated.
While the progress is commendable, challenges remain. Scaling up capacity will require sustained investment, robust regulatory oversight, and effective coordination among stakeholders. There is also the broader issue of integrating state-level initiatives with the national grid, ensuring stability and efficiency across the system.
However, the direction is clear. Lagos is moving away from dependence on a centralised, often unreliable system towards a more decentralised and resilient energy model.
Perhaps the most significant aspect of Lagos’s energy journey is its potential as a model for other states. By combining legal reform, private sector partnerships, and innovative financing mechanisms, the Sanwo-Olu administration is demonstrating what is possible at the subnational level.
In a country where power remains a perennial challenge, such initiatives offer a glimpse of a different future, where states take ownership of their energy needs and drive solutions tailored to their realities.
The signing of the 60MW Power Purchase Agreement is more than just a policy milestone; it is a statement of intent. It reflects a deliberate effort by the Lagos State Government to confront one of its most pressing challenges with clarity, innovation, and resolve.
Through strategic investments, regulatory reforms, and a focus on accountability, Babajide Sanwo-Olu is laying the groundwork for a more reliable and sustainable energy future.
In the grand scheme of Lagos’s development, these may well be remembered as the giant steps that powered a megacity into a new era of growth and prosperity.
•Olaosebikan, writes from Lagos State
