With its electricity law, Lagos bids darkness goodbye

By Adekunle Akinmosa

The signing was a simple affair. No fanfare or razzmatazz. Nothing like the mood that accompanies most government announcements. Many got to know of Lagos’ newly signed electricity law via a tweet from Gboyega Akosile, Special Adviser, Media and Publicity to the Lagos State Governor, on Tuesday.

“Lagos State Governor @jidesanwoolu today signed the Lagos Electricity Bill 2024,” Akosile wrote on his X account with an accompanying video.

“The bill is a major step by the State Government, to ensure 24 hours electricity supply to every nook and cranny of the State, following the FG’s nod for States to generate and distribute energy in 2023.”

In the video, Lagos State Governor Babajide Sanwo-Olu, is flanked by his Deputy, Dr. Obafemi Hamzat, and a few cabinet members, as he signs the bill into law. For Sanwo-Olu and the Lagos State government officials, it was just another day at the office.

Since the idea of states producing and distributing electricity got its life from the federal government last year, it has been a race among states to venture into the electricity market. Already, 12 states including Ekiti, Edo, Kaduna, Enugu, and Oyo have enacted their own electricity laws. For Lagos, however, this race has been on even before now.

During the administration of former Governor Bola Tinubu, Lagos installed Independent Power Plants (IPP) which took care of some of its offices and public institutions. But the previous law forbade incursion into the electricity market and limited the state government’s ability to sell electricity. But with the signing of the electricity bill into law by Sanwo-Olu, Lagos is set to begin its foray in the electricity market and reaffirm why it is the ‘Centre of Excellence’.

“We all have a common objective, an objective where we want to improve and develop the energy infrastructure of our state,” Sanwo-Olu said, after signing the law.

“Once we do that, we know that it will transform into an economic benefit for the citizens, ensuring that people can have a better security network in terms of making Lagos a true 21st-century economy, not being scared or worried about lights or illumination in some parts of the city.“But more importantly, small businesses do not need to have three different energy sources, where they need to have a backup or a backup to a backup. So for me, it’s a happy day. It’s a day that we can celebrate ourselves. But I want to say that, indeed, the job has just started, the journey, you know, has been laid for us.”

The objective of the government with the law is to ensure that Lagos becomes a 24/7 economy which can benefit businesses and households. Some key features of the Act include the establishment of the Lagos State Electricity Regulatory Commission to oversee the electricity market, regulate power generation, and set tariffs. The Act also creates the Lagos State Electrification Agency which is aimed at financing the state’s grid expansion and off-grid projects and promoting off-grid solutions and enhancing electricity access in under-served areas.

Other parts of the Act encourage collaboration with the private sector with focus on renewable energy, energy efficiency, and decarbonization. It outlines a roadmap for a sustainable power supply, with private-sector involvement encouraged.

As one of the fastest growing economies in Africa, Lagos is sure to attract investors in the electricity sector. Boasting of about 20 million residents, everything in Lagos can be turned to gold. Now, imagine a vital need such as electricity. Companies, both local and foreign, would be falling over themselves for a go at the Lagos market.

In July, the Speaker of the Lagos State House of Assembly, described the bill as a game changer in electricity supply in the state.

“This bill is most timely because electrification is one of the most important aspects of a viable economy and improvement of the wellbeing of the people,” Obasa said.

“Being a responsible Government, the Lagos State government has decided to create an agency, market and fund with the responsibility of ensuring adequate access to electricity with professional standards and modern technology. The bill is pursuant to our resolve to improve the electricity situation in the State. Lagos is proactive by taking advantage of the movement of electricity to the concurrent list.”

By being law, that movement has become a turning point.

About a month ago, the General Manager of the Lagos State Electricity Board, Mr Kamaldeen Balogun, said the government projects an investment of between $14 billion to $33 billion to address its energy generation needs by 2030. He disclosed this at the 15th Ralph Alabi Memorial Lecture and the induction of new corporate members of the Nigerian Society of Engineers (NSE) Ikeja Chapter. At the event which was themed ‘Opportunities in Emerging Power Sector: A Panacea for Economic Stability and Industrialisation’, Balogun reiterated Lagos’ commitment to providing electricity to residents and the investment opportunities in Independent Power Plants (IPPs), renewable energy (particularly solar), off-grid and mini-grid solutions for underserved areas, and energy storage systems to improve reliability.

“Lagos State is poised to ensure adequate and reliable power supply to its citizens through the Lagos Electricity Market,” he said.

“Emerging sectors like electric vehicle infrastructure and waste-to-energy projects offer long-term potential. The Lagos Electricity Market Implementation Plan is a key initiative to enhance power generation and distribution, with a target to generate 3,000 megawatts of electricity within the next 30 months. It includes a strong focus on capacity building, ensuring workforce training for engineers, technicians, and craftsmen in the power sector.”

Figures from the Lagos Bureau of statistics reveal that Lagos receives on average 1,000 megawatts of power daily, available for an average of 12 hours, against the state’s requirement of 9,000 megawatts. Filling this shortfall in the power sector in the country’s biggest economy would be so attractive to investors.

Manufacturing will take a turn for the better. The operations of manufacturers would become more profitable. And with time, news of companies folding or exiting would reduce. There would be maximum efficiency, reduced cost of production and more profits.

Also, new areas would be developed at a faster pace. For instance, the Lekki corridor, home to the Dangote Refinery and the proposed Lekki International Airport would get a rapid transformation. All over the state, commerce would get a fillip with the small and medium enterprises reaping the benefits of steady electricity. 

Aside from manufacturing and commerce, even industries such as healthcare and hospitality would boom, generally increasing the quality of life. Overall, the residents would benefit. For instance, it would be more cost effective for government to power street lights formerly powered diesel generators. Night is about to be as good as day.

The absence of steady electricity supply has been the albatross of development in the country. However, with this new electricity law in Lagos, the field is open for competition which would attract more investments and people. I trust the state government has anticipated this influx and ready to tackle it. More work is the reward of success. Kudos to Lagos under Sanwo-Olu.