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Victoria Island Power Ltd. (VIPL), the special purpose company incorporated by Lagos-based Elektron Energy, has chosen the technology group Wärtsilä to supply power generation equipment for a new 30 MW power plant being set up in Victoria Island, Lagos.

Wärtsilä will also operate and maintain the independent power plant for a period of five years on behalf of VIPL. The engineering, procurement, and construction (EPC) responsibility, together with the operation and maintenance (O&M) agreement, has been entrusted to Wärtsilä, with the equipment supply contract booked 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, Wärtsilä said in a statement sent to Financial Nigeria on Thursday. The plant will enhance the availability and reliability of power supply to the consumers served by EKEDC.

VIPL has also secured power purchase agreements (PPAs) with individual customers on a service-based tariff philosophy, according to the statement.

“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 & CFO at 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.”

“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)”, Solebo summarised.

According to Marc Thiriet, Energy Business Director, Africa at Wärtsilä Energy, the company’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. He said 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.

“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,” Solebo 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.  Wärtsilä said its modular power plant design concept enables this in a cost-effective manner with minimal disruption to ongoing operations.

This project, Wärtsilä says, is a first-of-its-kind for Nigeria and is expected to serve as a model to enable similar, optimally sized, and locally financed power projects in the country.