Lagos seeks $10bn private funds for electricity supply

Lagos State, one of the top 10 world’s fastest-growing cities and urban areas, has planned to raise as much as $10 billion in private investment to boost electricity supply to nearly five million households by 2032.

Governor Babajide Sanwo-Olu made this known in an interview with Bloomberg.

“We’ve done an extensive power roadmap in energy for Lagos and we have an idea of what our requirements will be for the next 10 years.

“We’re trying to grow our power requirement and based on the energy needs, it will be about 10,000 to 12,000 megawatts of power. So it could be an investment opportunity of up to like $10 billion. So, we’re going to put that in front of investors,” Sanwo-Olu said.

According to the state’s ministry of energy and mineral resources, Lagos receives about 25 percent of the 5,000 megawatts of national grid-connected electricity, forcing the city to rely on fragmented off-grid power sources.

Sanwo-Olu also stated that his government is collaborating with the World Bank and USAID to create off-grid options to encourage the usage of renewable energy in Lagos, Africa’s most populated city.

The state intends to create more than 1GW of solar photovoltaic energy in seven years, which will enable it to electrify 1.6 million homes by 2030.

In line with this, the state government had earlier signed a $6 million solar deployment deal with the Norway government at the opening of the Lagos-Norway Energy Exchange in Lagos.

The former Commissioner for Energy and Mineral Resources, Olalere Odusote, said at the signing of the deal that renewable energy investment is welcome in the state to bridge the gap in energy poverty faced in the state and Nigeria at large.

He said the agreement signed further reiterates the State’s commitment to generate over 1 gigawatts of power by 2030.

The governor also expects the Lagos mass transit rail line, which was designed to alleviate the city’s notorious traffic snarl, to begin operations by the end of August, following an eight-month delay.

The railway, built by China Civil Engineering Construction Corp., is scheduled to run on electric rails, but the governor said the construction of an independent power plant has been delayed by several months due to a “global disruption” in the delivery of crucial components.

“They’re almost in the country now. We even need it now more than ever before because of subsidy issues and so we’re working round the clock,” he said.

According to the Lagos Metropolitan Area Transport Authority, the first phase of the proposed 27-kilometre (16.8 mile) network will initially handle 250,000 passengers each day. The railway will run from Apapa near the Tin Can Island seaport to Marina on Lagos Island.

President Bola Tinubu, in June, signed the Electricity Act, marking a significant update to the 2005 Electricity and Power Sector Reform Act in Nigeria.

Originally enacted in July 2022 during former President Muhammadu Buhari’s administration, the new legislation aims to stimulate private sector investments in the country’s power sector and break the monopoly in electricity generation, transmission, and distribution on a national level.

Nigeria, according to the World Bank, has the largest energy access deficit, with available data as of 2021 showing that 85 million Nigerians of the country’s estimated 206 million population are without access to grid-connected electricity.

As of 31 December 2022, the generating segment of the country’s electricity market comprised 29 operational generating plants with a combined installed capacity of 13,014MW and an average operational capacity of 4,523MW – down 29 percent from 6,371.9MW in 2019.