Lagos calls for investors inaAmbitious 4,000 MW gas power project to bridge Nigeria’s electricity gap

Lagos, Nigeria's bustling commercial hub, has launched a call for private investors to develop gas-fired power plants that would add a combined 4,000 megawatts (MW) of electricity to the state’s supply. This project seeks to address the persistent energy deficit that has hindered the country's economic growth and strained households for years. The investment drive marks a critical step toward reducing Nigeria’s reliance on an overstretched national grid, which has frequently fallen short of meeting the population's energy needs.

Electricity access remains a significant challenge in Nigeria, where the World Bank estimates that approximately 40% of the population—Africa's largest by number—still lacks access to reliable power. This energy gap is one of the primary barriers that investors cite when considering business ventures in the country. Lagos, home to over 20 million people and one of Africa’s most rapidly expanding cities, has particularly struggled with electricity shortages. Although it requires an estimated 6,000 MW to power its economy and households, the city currently receives just around 2,000 MW from the national grid at best.

To tackle this shortfall, the Lagos State Government has allocated four strategic locations as sites for new power stations under its "Clean Lagos Electricity Market" initiative. These power hubs are intended to support both the state's growing energy needs and its goals for cleaner energy production.

“The minimum expected generating capacity for each of the four hubs will be 500 MW,” the Lagos State Ministry of Energy and Mineral Resources announced. This capacity could be generated by a single power firm or multiple firms working together, with companies expected to secure their own financing through power purchase agreements with the state.

This ambitious plan builds on a pivotal policy change made last year by Nigerian President Bola Tinubu, which granted state governments the authority to independently generate and distribute electricity. Previously, only the federal government held these rights, restricting state-level initiatives in power generation. The reform aims to foster competition and improve efficiency in power distribution across Nigeria.

Historically, investment in Nigeria’s power sector has been hindered by government-subsidized electricity tariffs, which have kept prices low but unattractive to independent power producers. In response, the government has begun phasing out these subsidies, hoping to create a more viable environment for private investment.

Nigeria’s energy infrastructure reflects the sector's limitations. The country has enough installed infrastructure to generate roughly 13,000 MW, yet its aging and inadequate grid can only deliver about a third of this capacity to end-users. As a result, businesses and households rely heavily on diesel and petrol generators, which are both costly and environmentally damaging. This dependency was exacerbated when the country suffered its ninth national grid collapse of the year just this past Monday.

By inviting investors to contribute to a more resilient, locally controlled energy grid, Lagos aims to lead the charge toward a brighter, more sustainable future for Nigeria’s energy sector.