Federal Government Approves N13 Billion for Compensation in Lagos Power Project

The Federal Executive Council (FEC) has approved a major financial commitment aimed at strengthening Nigeria’s power infrastructure and driving the country’s industrial growth. This includes the approval of N13 billion for compensation payments tied to the Lagos Transmission Industrial Project, as well as new investments to upgrade the country’s national electricity grid.

Speaking to the press in Abuja after the FEC meeting chaired by President Bola Tinubu, Minister of Power Adebayo Adelabu explained that the decisions represent a significant step forward in Nigeria’s power sector reform efforts. According to him, four major proposals received the Council’s nod, each one critical to stabilizing and modernizing electricity supply across key regions of the country.

The headline decision is the approval of N13 billion for compensation payments related to the Lagos Transmission Industrial Project. This project is designed to enhance power supply along the busy industrial corridor of Lagos and neighboring Ogun State. It is being backed by a $230 million loan from the Japan International Cooperation Agency, known as JICA.

Adelabu emphasized that the funding would be used to compensate property owners and communities impacted by the transmission lines and other infrastructure being constructed under the project. He explained that the objective is not only to make room for the power infrastructure but to do so responsibly by ensuring those affected are fairly compensated.

According to the minister, the project is a critical piece in the larger plan to ensure that Nigeria’s manufacturing hubs, especially those in Lagos and Ogun States, receive the stable and reliable power supply they desperately need.

He said, “This project, when completed, will not only improve capacity and credibility of power supply along the industrial axis of Lagos and Ogun, but it will also be good news for industrial development. It ensures that industries around that axis enjoy improved electricity supply.”

The transmission project is also expected to feed into the government’s broader economic goals. Adelabu explained that consistent electricity supply would allow local industries to become more productive, reduce their dependence on expensive generators, and even begin to compete better on a global scale.

“This is aligned with the government’s industrialization agenda, to use what we produce and produce what we use,” the minister said. “Stable power is the backbone of any meaningful development. It supports job creation, improves manufacturing output, and ultimately strengthens the economy.”

But the announcements did not end there.

In addition to the Lagos project, the FEC also approved three other key proposals aimed at addressing long-standing issues within Nigeria’s national electricity grid. These proposals involve the procurement of new transformers to replace aging and often failing infrastructure.

Adelabu pointed out that many parts of Nigeria’s national grid have been in operation for over 50 years, and much of the equipment is outdated and overstretched. This has led to frequent breakdowns, voltage drops, and an inability to carry increased electricity loads, even when supply from generation companies improves.

To tackle this, the government has now approved the purchase of 14 new high-capacity power transformers. These include two 150MVA 330/132/33kV units, five 100MVA 132/33kV units, five 60MVA 132/33kV units, and two 30MVA 132/33kV units. The total cost of the procurement stands at $34 million, with an additional N5.2 billion approved in local currency.

These transformers will be deployed across the national grid to replace worn-out equipment and to relieve pressure on transformers that are currently overloaded. This is expected to significantly improve the flow of electricity through the grid and reduce the frequency of system collapses and blackouts.

“If this is done, it will not only enhance power supply but also relieve overloaded power transformers that are operating across the national grid,” Adelabu said. “It will also enable us to cope with the increased wheeling capacity that we are seeing due to recent improvements in power generation.”

For Nigerians, the minister assured that these investments would translate into real, noticeable improvements in daily life. Whether in homes, small businesses, factories, or offices, better electricity access means lower operating costs, increased productivity, and more comfort.

He added, “These approvals represent good news for Nigerians. Reliable electricity is not just a convenience—it’s a necessity for national growth and global competitiveness. We are working tirelessly to ensure that the power sector reforms lead to visible and sustainable changes in the lives of our people.”

Adelabu reiterated the Tinubu administration’s commitment to transforming the power sector into a driver of economic development. From attracting private sector investment to implementing sound policies, the government, he said, is focused on building a power infrastructure that supports Nigeria’s vision for industrial expansion and inclusive growth.

As these projects kick off, the ministry has pledged transparency in implementation and collaboration with local communities to ensure smooth execution. The government is also calling on state governments, investors, and the private sector to align with the vision of a power-secure Nigeria that can meet the demands of a fast-growing population and economy.

In the weeks ahead, project execution timelines and contractor details are expected to be released, and Nigerians will be watching closely. With increased pressure on the government to deliver results in key sectors, the power sector remains one of the most critical, and its success or failure will directly impact millions of lives across the country.