The Lagos State Electricity Regulatory Commission has revealed that 38 companies, including MTN Nigeria and Flour Mills of Nigeria, are collectively generating approximately 600 megawatts of electricity across Lagos without the state operating licences now required under the Lagos State Electricity Law 2024.
The disclosure, published today in Punch Newspapers, marks a significant enforcement escalation by LASERC as it moves to assert full regulatory control over Lagos’s electricity market following the formal transfer of oversight from the national regulator.
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Why this matters
The companies in question have been generating captive and embedded power for their own facilities and, in some cases, for surrounding communities and industrial clusters — activities that now require a licence from LASERC under the new regulatory framework. The commission has made clear that licences issued by the Nigerian Electricity Regulatory Commission no longer carry validity within Lagos State and that continued unlicensed operations will attract penalties starting at N20 million, with an additional N20,000 imposed for every day of non-compliance beyond the notice period.
The 600 megawatts of unlicensed generation exposed by LASERC is substantial. For context, Lagos’s total grid-supplied electricity regularly falls well below what the state’s commercial and industrial base requires, meaning a significant portion of what keeps factories, telecoms infrastructure, and large businesses running in Lagos has been operating outside the regulatory framework that is now being enforced.
For large corporations, the licensing requirement is an administrative transition. For the SMEs that sit in their supply chains or operate in the same industrial clusters, what happens to that power supply during the compliance process has direct operational consequences.
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The broader enforcement picture
LASERC’s action is part of a comprehensive regulatory tightening that has been building since the commission was formally constituted in 2024 and inaugurated under Governor Sanwo-Olu’s administration in March 2026. The commission has already approved 14 licences for embedded generation, off-grid, metering, and mini-grid operators as part of building a structured private electricity market in Lagos.
Planned reforms include 24-hour electricity franchise pilot zones by October 2026, a 100 per cent metering initiative beginning July 2026, and the Electric Eye of Lagos AI-enabled monitoring system, which will be deployed in October 2026. By 2030, LASERC has set a target of 97.5 per cent electricity availability across Lagos — a figure that would represent a transformation in the operating conditions facing every business in the state.
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What it means for businesses
For Nigerian SMEs operating in Lagos, the electricity regulatory transition carries both risk and opportunity. The short-term risk is disruption if large captive generators are forced offline during a compliance gap. The longer-term opportunity is a more structured, competitive, and reliable power market where multiple private operators compete for customers, a model that, if executed well, could meaningfully reduce the energy costs that have been one of the most persistent drags on small business profitability.
A power market that works in Lagos changes the cost structure for every business operating in Africa’s largest city economy. LASERC’s enforcement actions, disruptive as they may be in the short term, are a necessary step toward building that market.
