Peter Uzoho and Oluchi Chibuzor
Lagos State Governor, Babajide Sanwo-Olu has commended Eko Electricity Distribution Company (EKEDC) and its partner, Elektron Energy for embarking on a 30-megawatts (MW) embedded natural gas-fired power plant in the state worth $50 million.
The Independent Power Plant (IPP), which is planned to supply uninterruptible electricity through dedicated 33kV and 11kV distribution networks exclusively to identified customers, is expected to serve businesses and residents in Victoria Island with improved electricity when completed.
The governor also appreciated the collaborative possibility exhibited by local financiers in supporting the project with necessary liquidity, seen by stakeholders as a model template in bridging the power generation gap in the country.
Sanwo-Olu, spoke yesterday in Lagos, at the ground-breaking ceremony of the project christened the Victoria Island Power Limited 30MW Embedded Independent Power Plant, which is a collaborative effort of Elektron and Eko Disco.
The governor, who was represented by the Permanent Secretary, Lagos State Ministry of Energy and Mineral Resources, Shola Shasore, called for more private sector-led initiatives to embrace the model deployed by VI Power.
He acknowledged that while the government could only create policies and provide an enabling environment, the private sector remains the only solution to solving the country’s power challenges through collaborative efforts as the power plant.
“We understand that reliable, steady power builds commerce, commerce builds capital and capital brings industrialisation and industrialisation brings employment to our youths, which is our area of interest.
“We are available to whoever is interested in bringing power to the state because we have to do everything we really need to do for Lagos to have power as the economic hub of the country.
“We are in very interesting times with the New Electricity Act and it can be very good times for us if we are very collaborative. We believe that it is the private sector that would drive this achievement for us,” the governor said.
In his remarks, the Chairman of EKEDC, Oritsedere Otubu, said the need to deliver optimal power supply to Lagosians sparked the conversations on the project as far back as 2015, when Eko Disco pioneered the discussions on embedded generation.
He explained that inextricably linked with the project was the gap in generation which had been a lingering issue impacting service delivery in the power value chain, particularly, the ability of Discos to meet with its service-level commitment to customers.
Otubu, stressed that currently, the industry still records about 4,000MW as its peak generation, which had been shown by studies that the same was not enough to service Lagos State estimated as having a population of over 27 million people.
“And with an increased capacity, there is the incentive to surpass the demand soon. Beyond any doubt, the gains which this project presents are humongous.
“Not only for the communities and stakeholders, but also the gains this project presents equally extends to the partners”, he said.
The chairman added that with a Multi-Year Tariff Order (MYTO) load allocation of 513MW, an addition of 30MW, edges Eko Disco towards meeting its demand requirement to its customers.
He maintained that the power plant would employ cutting-edge technologies, ensuring efficiency, reliability, and reduced environmental impact, adding that the power generated at the facility would not only meet the Disco’s current energy demands but also anticipate and accommodate the future needs of Lagosians.
“As the construction progresses, we will create employment for local workers, stimulate local businesses, and foster a spirit of empowerment and inclusivity,” he noted.
Principal and Chief Financial Officer of Elektron Energy, Deen Solebo, who disclosed that the project would cost about $50 million, said the project has construction timeline of 18 months with potential to eradicate up to 1000 diesel generators within its coverage area.
The CFO added that the plant was expected to commence operation by the fourth quarter (Q4) 2024 and would have an expected lifespan of 20 years.
The Managing Director, Elektron, Tola Talabi, said the project had shown clearly that when regulatory roadblocks were removed, bankable projects could attract the needed funding.
“We hope to replicate this kind of project across the landscape of Nigeria as this is the first time an embedded power plant has been built in partnership with a distribution company.
“This project is the first of its kind, where a natural gas IPP will be directly embedded into a Disco’s distribution network for supply to Identified end-user customers”, Talabi said.
