Nigeria’s Lagos seeks investors for 4,000 MW gas-fired power plants

Reuters | Lagos, Nigeria’s commercial hub, has announced a bid solicitation for constructing gas-fired power plants with a combined capacity of up to 4,000 megawatts (MW) to address the shortfall in the national power grid. This initiative is aimed at ending chronic blackouts that disrupt both businesses and households.

According to the World Bank, 40 percent of Nigeria’s population – the largest in Africa – lacks electricity access, a key obstacle that deters potential investors.

The Lagos state government, which manages a rapidly expanding city of over 20 million people, requires 6,000 MW of electricity but currently receives a maximum of just 2,000 MW from the national grid.

To support this effort, the government has allocated four sites for power station construction as part of its Clean Lagos Electricity Market initiative.

Per a notice from the state’s Ministry of Energy and Mineral Resources, each of the four hubs will have a minimum generation capacity of 500 MW, powered by one or more independent generation companies.

The chosen companies must secure their own financing through power purchase agreements with the state.

This initiative follows President Bola Tinubu’s move last year to grant state governments the authority to generate and distribute electricity, overturning a previous federal monopoly.

Historically, low electricity tariffs have discouraged independent power producers from investing, but the government has initiated the gradual removal of electricity subsidies.

Although Nigeria has a capacity to generate 13,000 MW, its outdated grid can only distribute roughly one-third of that amount, forcing businesses and households to depend on costly fuel-powered generators.

Earlier this week, Nigeria faced its ninth grid failure of the year.