Lagos State says it is on course to achieve a major breakthrough in Nigeria’s electricity sector, with its first state-licensed independent power projects expected to begin commercial operations between 2026 and early 2027.
The development marks a significant shift from policy design to actual implementation under Nigeria’s decentralised electricity framework introduced by the Electricity Act 2023.
The Governor of Lagos State made this known at the BusinessDay Energy Conference 2026 themed “Beyond the Grid: How States Can Rewrite Nigeria’s Power Story.” He was represented by the Commissioner for Energy and Mineral Resources, Biodun Ogunleye.
According to him, the upcoming projects will operate under Lagos’ newly established electricity market, following the state’s Electricity Law 2024, which formally positioned Lagos as the first state to fully regulate its own power sector.
“We expect the first state-licensed independent power producer to begin commercial operations between 2026 and early 2027,” he said.
He added that the projects are being designed to serve high-demand areas, including industrial zones and critical public infrastructure.
This development comes after Lagos completed its transition from federal oversight to full state-level electricity regulation in 2025, making it the first subnational government in Nigeria to fully take control of its electricity market.
As part of ongoing reforms, the state recently signed Power Purchase Agreements and concession deals with three independent power producers aimed at boosting generation capacity by an estimated 200MW to 400MW in the coming years. The agreements involve Mainland Power Limited, Fenchurch Power Limited in partnership with Aggregate Utilities Limited, and Viathan Engineering Limited.
Speaking at the signing ceremony, Governor Babajide Sanwo-Olu said the reforms are focused on practical solutions that directly impact residents and businesses.
“This agreement is about the people and how quickly we can solve problems. We must keep our promises on both sides. When people benefit, life becomes easier,” he said.
He described the initiative as the beginning of a broader transformation in the state’s energy sector.
Energy remains central to Lagos’ economic strategy, with officials describing electricity as a critical driver of industrial growth, healthcare delivery, and urban development. The state reportedly spends about $2.7 billion annually on self-generated power, a burden the reforms aim to reduce significantly.
If successfully implemented, the new electricity framework is expected to ease pressure on businesses and households while boosting productivity across key sectors of the economy.
The governor noted that while challenges around financing, regulation, and coordination remain, the focus has now shifted from policy formulation to execution.
“The question is no longer whether states have the authority. It is whether they have the will to act,” he said.
With the first independent power projects now in sight, Lagos is positioning itself as a test case for state-driven electricity reform in Nigeria, a move that could reshape the country’s broader power landscape.
