Lagos State calls for bids to develop 4 GW gas-fired power plants

The Lagos State Government in Nigeria has invited bids from investors, independent power producers, and energy solution providers to develop up to 4 GW of gas-fired power plants. 

This initiative, part of the Clean Lagos Electricity Market plan, aims to alleviate the city’s chronic power outages, which have impacted both households and businesses. While Lagos requires over 6 GW of electricity, it currently receives only up to 2 GW from the national grid.

The state government has designated four hubs for the construction of these power plants, with each hub expected to have a minimum generating capacity of 500 MW, contributed by one or more power generation companies. Selected bidders will need to secure their own funding, underpinned by a power purchase agreement with the Lagos State Government.

This development follows last year’s decision by President Bola to permit state governments to generate and distribute their power, ending federal exclusivity in the sector. With approximately 40% of Nigerians lacking access to electricity, this initiative represents a significant opportunity to attract investment. Historically, low electricity tariffs and subsidies have dissuaded independent power producers, but recent subsidy reductions signal a shift towards incentivizing private investment.

Alongside the gas-fired projects, the Lagos government plans to establish five additional power hubs and develop 1 GW of grid-scale solar energy across more than ten potential sites, including Egbin, Ikorodu, and Badagry. These measures align with Lagos’s broader strategy to provide cleaner and more reliable energy sources.