Victoria Island Power: The 40 MW Plant Rewriting the Rules of Commercial Power in Lagos

Kayode Tokede

Elektron Energy’s 40mw Victoria Island Power project is advancing towards commercial operation in Q1 2027. Backed by institutional capital, international engineering expertise and growing commercial demand, the project demonstrates how strategic partnerships, disVictoria Island Power: The 40 MW Plant Rewriting the Rules of Commercial Power in Lagos

ciplined execution and purpose-built infrastructure can deliver more reliable electricity to one of Nigeria’s most important commercial centres.

At the aerial view of the Victoria Island Power Plant, where construction is progressing ahead of planned commercial operations at the Victoria Island Power Plant in Lagos, three Wärtsilä gas engines have been installed, marking a significant milestone in the development of a major new power generation facility.

Supporting infrastructure, from treatment facilities to electrical systems, continue to advance, while a dedicated 12.6-kilometre underground network has been developed to distribute electricity to businesses across one of Nigeria’s most important commercial centres. In September 2026, the project achieved another significant milestone when the Lagos State Electricity Regulatory Commission (LASERC) granted Elektron Energy a generation licence, strengthening the project’s regulatory foundation as construction and preparations for commercial operation advance.

The project’s significance lies in the problem it is built to solve. For decades, unreliable electricity has been one of the defining costs of doing business in Nigeria. The scale of the challenge was laid bare in mid-October 2026, when national grid generation fell from 3,840mw to 476.7mw within six hours – an 87.6% drop that triggered outages across the country. Such disruptions expose a deeper commercial problem: businesses must not only contend with interruptions to supply but also absorb the capital, fuel, maintenance and operating costs of maintaining alternative power systems.

For many businesses, the cost of an unstable grid is not only the risk of disruption but also the ongoing expense of securing their own backup supply. Even in Victoria Island, home to many of the country’s largest banks, multinationals, hotels and commercial towers, businesses have been left to generate their own electricity. Diesel generators, fuel storage and maintenance contracts are now a standard cost of doing business on the Island, consuming capital, management time and contingency planning that could be spent elsewhere.

Elektron Energy believes there is a better way: Its approach is to address the challenge at scale: develop dedicated, professionally managed power infrastructure around concentrated commercial demand, enabling businesses to access reliable electricity without each having to maintain extensive and expensive independent generation systems. With more than a decade of experience developing, financing, owning and operating energy infrastructure, Elektron has established capabilities spanning project development, engineering, commercial structuring and long-term operations.

Its portfolio includes infrastructure supplying critical government facilities in Alausa and dedicated power solutions supporting Rack Centre, one of Nigeria’s important data centre facilities. Victoria Island Power builds on this experience, extending Elektron’s established model of purpose-built generation and reliable power delivery to a wider commercial customer base, with an initial capacity of 40mw and the potential to expand to 70mw. Where the project stands, building a power plant involves far more than installing engines. Developers must prove demand, secure land and permits, raise finance, procure technology, arrange fuel, lay distribution lines, sign customers and satisfy regulators – and each piece has to fit the others.

Developed by Elektron in partnership with Eko Power, Victoria Island Power has translated years of planning, technical development and commercial structuring into substantial physical infrastructure. With its generation engines installed and key supporting systems progressing, the project is moving through the final stages of development towards inauguration and commercial operation. The project is currently 56.39% complete, with significant progress recorded across civil, mechanical and electrical works.

Civil construction has reached 67.31% completion, while mechanical and electrical installations stand at 46% and 26.26% respectively. Work is also progressing on the upgrade of the existing Eko Power substation, strengthening the infrastructure required to support electricity distribution to connected customers. With the three Wärtsilä gas engines installed, the next phase of work will focus on mechanical testing and completion activities, alongside substantial completion of outstanding infrastructure works.

These activities form part of the project’s preparations for provisional acceptance, bringing Victoria Island Power closer to commercial operation in Q1 2027. Three Wärtsilä gas engines are installed at Elektron Energy’s 40mw Victoria Island Power Plant. Wärtsilä, the Finnish energy technology group, is the project’s engineering, procurement and construction contractor and its long-term operations and maintenance partner, an arrangement that ties the company’s expertise to the plant’s performance over many years, not just to its delivery.

Victoria Island Power’s strength lies in its integrated infrastructure model, bringing together dedicated generation capacity, an underground distribution network and long-term commercial arrangements with customers. Rather than treating electricity generation and delivery as separate challenges, the project has been developed as a coordinated system in which infrastructure investment is aligned with clearly identified commercial demand.

The partnerships behind the project infrastructure of this scale is rarely delivered by one organisation. It takes a coalition of technical and financial partners, each bringing capabilities the others do not have. Elektron’s partnership with Eko Power, a key partner in the project, combines complementary expertise in power generation and distribution-sector capability.

Wärtsilä brings internationally proven technology and operating support. The project’s financing and investment structure brings together institutional participation and financial support from ARM-Harith Infrastructure Fund, InfraCredit, Africa Finance Corporation, Stanbic IBTC, the Nigeria Sovereign Investment Authority and the Bank of Industry (BoI), reflecting the institutional relationships required to develop commercially viable power infrastructure at scale.

For such institutions, technical feasibility is only the starting point. Long-term capital depends on more than sound engineering. It requires predictable revenue, appropriately managed risk and a commercial structure that aligns financing, construction, fuel supply, customer commitments and operational performance over the life of the asset. As Nigeria seeks more private investment in electricity, projects that can demonstrate both sound engineering and bankability will do much to sustain investor confidence. For Elektron, the ability to originate projects and assemble this kind of coalition is the core of its business.

**Commercial Demand: The Customers Behind the Investment. **

The commercial strength of a power project is measured not only by how much electricity it can generate but by the demand it has secured. Victoria Island Power has attracted approximately 25 customer commitments across banking, hospitality, telecommunications, commercial property and professional services within its portfolio. Each with needs that differ. A hotel must keep guest services running around the clock; a bank must protect sensitive systems and business continuity; a landlord needs dependable services to attract and keep tenants; telecoms and digital businesses depend on constant power for critical systems.

What they share is a need for supply they can plan around, and a desire to spend less of their capital and attention generating their own. Securing long-term customer commitments is central to the project’s investment proposition. Contracted electricity demand provides greater visibility over future revenues, supporting the financial structures required to develop and operate capital-intensive power infrastructure.The project’s potential benefits extend beyond its immediate customer base.

By enabling connected businesses to reduce their reliance on diesel generation, it offers the prospect of lower local emissions and noise, while more dependable electricity can support productivity, operational resilience and the attractiveness of commercial properties.

According to Victoria Island Power’s projections, customers connected to the network could achieve savings of up to 40% compared with diesel-generated power, while the plant’s gas-fired embedded generation technology is expected to produce up to 50% less carbon dioxide than diesel alternatives. Beyond these financial and environmental benefits, reliable electricity supply also reduces the operational burden of managing generators, fuel procurement and maintenance, allowing customers to direct more resources towards their core operations.

By developing shared power infrastructure around concentrated commercial demand, Victoria Island Power introduces a more coordinated and scalable alternative to the conventional model of individual businesses investing heavily in their own generation capacity. Its significance lies not only in the customers it will serve, but in the wider possibilities it creates for commercial power delivery in Lagos. Advancing Lagos’s New Electricity Market Lagos State Electricity Regulatory Commission (LASERC) during an official visit to Victoria Island Power Victoria Island Power is arriving at an important moment for Nigeria’s electricity sector.

The Electricity Act 2023 and subsequent state legislation have opened the door to new market structures and greater state-level participation in generation and distribution, and Lagos has moved to establish its own framework under LASERC. Following the September award of an electricity generation licence to Elektron Energy, authorising the company to generate electricity within Lagos State, the commission’s leadership visited the plant to review construction progress, technical requirements and operational readiness with Elektron’s engineers and project partners.

For Lagos, the challenge is not only to create a framework that attracts investment but to ensure that framework produces projects that actually deliver power to customers. Victoria Island Power demonstrates how regulatory reform can support tangible infrastructure development, connecting an enabling policy environment with private investment, technical expertise and commercial demand. As the project moves into operation, it is positioned to contribute to the growing body of experience supporting embedded generation and dedicated power infrastructure within Lagos’s electricity market.

Beyond Victoria Island Victoria Island Power forms part of Elektron Energy’s broader strategy to develop, finance and operate critical energy infrastructure across Nigeria and other African markets. The company’s approach combines deep knowledge of local energy demand with sophisticated commercial structuring, international technical partnerships and the capacity to execute projects through their full development and operating lifecycle. This ambition is evident in the company’s portfolio, spanning very different needs: gas-fired generation for Lagos State’s offices at Alausa, dedicated supply for the Rack Centre data centre, and to West Africa’s largest rooftop solar installation at Jabi Lake Mall in Abuja.

These projects demonstrate Elektron’s ability to deliver tailored energy solutions across different sectors and scales. Building on this experience, Elektron continues to expand its footprint in embedded generation, distributed power and renewable energy. This integrated capability is central to Elektron’s long-term growth strategy. Rather than approaching power projects as isolated developments, the company is building a scalable infrastructure platform capable of delivering solutions across commercial centres, industrial clusters and other high-demand markets. Victoria Island Power provides a tangible example of that approach, demonstrating how proven capabilities and established partnerships can be deployed to address increasingly complex energy needs.

“Victoria Island Power reflects how we approach infrastructure development at Elektron. We start with a clear understanding of demand, bring together the right technical and financial partners, and build solutions designed to perform over the long term, proving power can work in Nigeria” says Tola Talabi, Chief Executive Officer of Elektron Energy. “This is the capability we have spent years developing, and it is the foundation on which we are building our wider portfolio.”

**The Next Phase: Towards Commercial Operations **

With its engines in place, supporting works progressing and customers signed, Victoria Island Power is entering its final stretch. The remaining steps centre on completing, testing and integrating the systems needed to deliver electricity safely and reliably. Nigeria’s electricity conversation has long been dominated by the scale of unmet demand, the cost of unreliable supply and the investment needed to close the gap. Victoria Island Power offers a different perspective: what can be achieved when commercial demand, institutional capital, engineering expertise and disciplined execution are brought together around a clearly defined need.

For Elektron Energy, the project represents more than another addition to its portfolio. It demonstrates the value of an infrastructure development model built on experience, strong partnerships and long-term commercial thinking. As Victoria Island Power advances towards operation, it offers a compelling indication of how purpose-built energy infrastructure can support Nigeria’s most productive commercial centres, and how that model can be extended to other markets.