Finnish Technology group Wärtsilä has signed a deal to build and operate a 30 megawatts (MW) power plant in Victoria Island, Lagos by a Nigerian independent power producer (IPP) for five years.

Victoria Island Power Ltd. (VIPL), the special purpose company incorporated by Lagos-based Elektron Energy for this project has entrusted Wärtsilä with the engineering, procurement, and construction (EPC) responsibility, together with the operation and maintenance (O&M) agreement. The equipment supply contract was booked by Wärtsilä in Q4 2024.

The power plant which will run on natural gas will be embedded within the Eko Electricity Distribution Company (EKEDC) at their NEPA Close Site and has been developed through the collaborative efforts of Elektron Energy and their local partners.

The plant will enhance the availability and reliability of the power supply to the consumers served by EKEDC.

“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. 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”, Deen Solebo, Co-CEO & CFO at Elektron Energy said.

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“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),” Deen concluded.

Marc Thiriet, energy business director, Africa at Wärtsilä Energy said, “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 PPAs with medium to long-term tenures. The Wärtsilä solution is extensively adopted by industrial, utility & IPP customers worldwide, and the excellent credentials and track record have been recognised as a great value proposition by lenders, insurance companies, and multi-lateral funding institutions.”

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“Elektron is especially grateful to the invaluable contributions of its institutional investors and funding partners who have made this project possible, including ARM Harith Infrastructure Fund LP, Nigerian Sovereign Investment Authority, InfraCredit, Bank of Industry, FBN Quest, and Stanbic Infrastructure Partners,” Deen added.

The facility will comprise three Wärtsilä 34SG gas engine-generator sets with related auxiliaries and is configured to accommodate an extension with one additional engine-generator set at a later stage. The Wärtsilä modular power plant design concept cost-effectively enables this with minimal disruption to ongoing operations.

According to Elektron, the project’s dedicated feeder network spans 12.6km and comprises multiple 11kV and 33kV underground feeders, delivering steady, high-quality power. Approximately 13MW of capacity has already been subscribed to by key customers, resulting in over 40% energy cost savings.

It added that there are plans to expand services to nearby business districts like Ikoyi and Lekki, which will pave the way for a robust, self-reliant energy network.

Built under a “willing buyer, willing seller” model, the embedded generation plant is adaptable to future energy demands, ensuring scalable, long-term solutions for Lagos’ evolving needs. Beyond reliable power, the plant supports economic growth and community development by creating jobs during construction and operation phases, fostering sustainability, and reinforcing Lagos’ position as a regional hub for innovation and investment.”’