A new 30 MW gas-fired power plant is set to be constructed on Victoria Island, Lagos, as part of a partnership between Nigerian independent power producer Victoria Island Power Ltd. (VIPL) and global energy technology firm, Wärtsilä.

According to a statement by Katri Pehkonen, Wärtsilä Energy’s Communications Manager, the firm will supply the power generation equipment and assume responsibility for operating and maintaining the plant for five years. The engineering, procurement, and construction (EPC) contract, along with the operations and maintenance (O&M) agreement, were awarded to Wärtsilä by VIPL—a special purpose vehicle established by Lagos-based Elektron Energy for the project. The equipment contract was booked by Wärtsilä in Q4 2024.

The power plant, to be embedded within the Eko Electricity Distribution Company (EKEDC) network at its NEPA Close Site, will run on natural gas and is intended to enhance electricity supply reliability for EKEDC consumers. VIPL has also secured power purchase agreements (PPAs) with individual customers using a service-based tariff model.

“Elektron has conceptualised, developed, and funded the IPP and has secured the implementation by engaging Wärtsilä to assume single-point responsibility for the major construction and operational aspects related to the eventual power generation facility,” said Deen Solebo, Co-CEO and CFO of Elektron Energy.

“This pioneering project relies on reciprocating internal combustion engine (RICE) technology that has the efficiency and flexibility to deliver clean and reliable electricity to our customers.”

Solebo added that progress at the construction site was on track.

“I was very impressed by Wärtsilä’s state-of-the-art manufacturing facilities during my visit to the Sustainable Technology Hub in Vaasa, Finland in late Q3 2024 and am happy with the readiness of the engine-generator sets. In parallel, clearing and preparation activities at the NEPA Close Site are progressing well and are due for completion within Q2 2025, after which construction can start. Commissioning is expected 15 months thereafter and the Operations & Maintenance agreement is timed to commence prior to the new build project reaching commercial operations date (COD).”

Wärtsilä says the project reflects a broader interest from developers and financiers in modular, locally supported power solutions.

“Wärtsilä’s core competence in the engine power plant and services aspects represents a unique combination of a global company with a local presence that provides developers and financiers the comfort to invest and gives end-customers the confidence to sign up for PPA’s with medium to long-term tenures,” said Marc Thiriet, Energy Business Director, Africa at Wärtsilä Energy.

The new facility will comprise three Wärtsilä 34SG gas engine-generator sets and associated auxiliaries. The modular plant design includes provision for a fourth unit to be added later with minimal disruption.

Elektron Energy acknowledged its funding and institutional partners, including ARM Harith Infrastructure Fund LP, Nigerian Sovereign Investment Authority, InfraCredit, Bank of Industry, FBN Quest, and Stanbic Infrastructure Partners, for supporting the project.

The plant is the first of its kind in Nigeria in terms of scale, structure, and local financing approach, and is expected to provide a model for future embedded power initiatives in urban centres.