Lagos State is intensifying efforts to tackle Nigeria’s persistent electricity shortages by expanding its independent power generation and distribution system outside the national grid.
The state government disclosed that it has secured 400 megawatts of new electricity supply as part of a broader strategy to reduce dependence on the country’s unstable national power infrastructure.
According to the Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, the initiative is aimed at reducing reliance on a “single point of failure” and improving energy reliability for Africa’s largest city.
Nigeria’s national grid currently generates about 3,000 megawatts on its best days, far below the estimated national demand of over 30,000 megawatts. This shortfall has forced many households and businesses to depend heavily on diesel and petrol generators.
Under recent electricity sector reforms, Nigerian states now have the authority to establish and regulate their own electricity markets. Reports indicate that at least 22 states are already developing frameworks to reduce reliance on the centralised grid managed from Abuja.
Lagos officially launched its state electricity regulatory framework in June 2025, transferring intrastate power oversight from the Nigerian Electricity Regulatory Commission to the Lagos State Electricity Regulatory Commission. By the end of that year, it became the first state in the country to fully assume control of its electricity market.
The state has also entered into power purchase agreements with several private energy companies, including Fenchurch Power, Mainland Power, and Viathan Engineering Limited, to supply up to 400 megawatts of electricity to public facilities over a three-year period.
Officials explained that the new agreements mark a shift in how electricity is procured and paid for in the state, with Lagos moving away from traditional contract models that required payment even when power was not delivered. Under the new arrangement, the state will only pay for electricity actually supplied and measured.
Energy analysts say state-managed electricity markets could improve power reliability across Nigeria, but warn that challenges such as gas supply constraints, foreign exchange pressures, infrastructure limitations, and technical capacity gaps could still hinder progress.
