Lagos State has rolled out a "no power, no pay" framework as part of sweeping reforms to electricity delivery across public infrastructure. Governor Babajide Sanwo-Olu signed three fresh power purchase agreements on Sunday to anchor the new policy.
The governor inked the deals at Lagos House in Marina. He said the contracts were designed to plug gaps in the state's power supply chain.
"Today I witnessed the signing of three power purchase agreements to build on existing capacity and address what has not been working," Sanwo-Olu told reporters. The arrangement carves out specific responsibilities among three power companies operating in different zones.
Fenchurch Power will now handle electricity supply to major water infrastructure at Adiyan and Iju. Mainland Power keeps its existing mandate for Ikeja, Oshodi, and Anthony while preparing to expand into new territories.
Viathan continues supplying power to Island facilities. The company will also strengthen how its electricity integrates with the broader distribution network.
According to the governor, all three agreements have been rewritten to match today's realities in Nigeria's power sector. A performance-based payment model now replaces the old system.
"We will no longer pay for power that is not delivered," Sanwo-Olu stated bluntly. "Payments are now tied to actual, metered supply, helping us reduce waste and manage costs more effectively."
This shift means Lagos only settles bills for electricity that actually reaches public facilities. Officials believe it will force suppliers to maintain strict accountability for every unit supplied.
The governor noted that the reforms should boost reliability for state institutions across all zones. Better resource management will follow once the state stops bankrolling undelivered power.
"This means more reliable power for public infrastructure, better use of state resources, and a clear path to scale capacity over the next few years," Sanwo-Olu added. Experts say the model could eventually serve as a template for other states wrestling with similar supply challenges.
