Nigeria's Geometric Power will build a 1,080 megawatt power plant jointly with General Electric , with the first phase of the project generating 500 MW expected to be completed in 2019 at a cost of $800 million.
Geometric Power CEO, Bart Nnaji said the firm had also appointed London-based Standard Chartered Bank as financial advisers for the first phase of the plant.
Africa's biggest economy broke up its monopoly on power generation and distribution by privatising the sector two years ago, hoping to attract foreign investors, but the amount of power produced has stagnated at around half total capacity.
"We have a 1,080 megawatt project ... (in partnership) with General Electric. The power goes to the national grid. What we are doing is to build up power projects in this way," Nnaji, a former Nigerian minister of power, told Reuters late on Tuesday on the sidelines of a power conference in Lagos.
Nnaji said the firm was in discussions with some Chinese, European and U.S. investors and expected financial close by year-end. Construction would start early next year.
Geometric Power, which has a 141 megawatt captive power for industrial use in Abia State, said the new plant would also be located in Abia State, southeast Nigeria.
Nigeria, with a population of around 170 million, has installed power capacity that fluctuates between around 6,000 to just over 7,000 MW, but experiences severe electricity shortages that are crippling its growth.
Some of the older plants, sold in October 2013, are in dire need of an upgrade while the fledgling generating firms lacking the cash as distributors struggle with non-paying consumers and inadequate gas supplies required to keep the plants running.
Nigeria is also in talks with Russia's state-owned Rosatom to build nuclear power plants.