The Lagos State government has invited bids for the construction of a 4,000 megawatt (mw) gas-fired power plant to cover a national grid shortfall, in a bid to end years of blackouts that have hit businesses and households.
The World Bank says that four in 10 people in Nigeria – Africa’s most populous nation – do not have access to electricity, a major reason investors shy away from citing their businesses in the country.
Lagos, a fast expanding metropolis of more than 20 million residents, said it requires 6,000 mw of electricity but is receiving only 2,000 mw at most, from the national grid.
The government has now allocated four hubs for the construction of power stations under its Clean Lagos Electricity Market plan.
“The minimum expected generating capacity for each of the four hubs will be 500mw, which one or more power firms shall generate,” the Ministry of Energy and Mineral Resources disclosed through a public notice.
Selected companies would be expected to arrange their own financing based on a power purchase agreement with the government.
The plans follow the approval last year by the Federal Executive Council to allow states generate and distribute their own power, replacing a previous law that gave only the Federal government exclusive rights.
Sub-economic electricity tariffs have discouraged investment by independent power producers in the past, but the government has started to remove electricity subsidies.
Nigeria has the infrastructure to generate 13,000 mw of power, but its creaking grid can distribute only a third of it, forcing businesses and households to run costly fuel generators.
Nigeria, on Monday, suffered its 9th grid collapse this year.