The decommissioning of all three disposal sites nearest to the Ibeju-Lekki Corridor — Epe closed, Olusosun and Solous III entering formal 18-month closure — defines Q3 2026 as the last authorization window before the corridor has no contracted disposal alternative and no path to net-positive fiscal position before 2030.
The Situation
The Ibeju-Lekki Corridor currently generates an estimated 1,330 TPD of addressable manufacturing feedstock. The three disposal sites that served this corridor have been closed or are formally entering closure: Epe landfill is already shut and being converted to a waste-to-energy facility by Harvest Waste Consortium; Lagos State Waste Management Authority announced the 18-month decommissioning of Olusosun and Solous III in December 2024. As of March 2026, PSP operators serving the Lekki and Ibeju-Lekki axis are being diverted to Ojota — a 40–60 km one-way haul that materially increases the cost of every tonne collected. The Ikorodu MRF and Badagry replacement nodes planned by LAWMA are not yet under construction. The corridor has no contracted local disposal alternative past mid-2026.
The Decision
The corridor currently pays an estimated $14/ton blended disposal cost — the Full Waste Disposal Cost (FWDC) — under the existing PSP operator framework. This figure is on a documented upward trajectory: PSP rates increased 200% in the 2022–2023 period, driven by diesel cost, NGN depreciation, and vehicle capital costs. As Olusosun closes and haul distances extend, the effective FWDC will escalate toward $20–25/ton within the study horizon with no structural remedy in sight under the current system.
Carbotura proposes a 30-year Commercial Offtake Agreement (COA) with Lagos State's designated waste authority. Under the COA: Carbotura's Special Purpose Vehicle (SPV) builds, owns, and operates an Advanced Circular Manufacturing (ACM) facility within the Lekki Free Trade Zone — at zero capital cost to Lagos State. Lagos State pays a TMC Fee of $22/ton on actual feedstock delivered. Beginning 13 months after the first TMC Fee payment, the SPV pays a Circular Royalty back to Lagos State equal to 120% of the corresponding TMC Fee, escalating by one percentage point per year. The facility simultaneously produces ultrapure water (addressing Lagos's 300M+ gallon/day water deficit), exports net solar power (~15 MW Phase Initial), and generates hydrogen — creating durable products from what is currently flowing into the lagoon.
Phase Initial (400 TPD) reaches Commercial Operations Date at T0 + 24 months. T0 is the completion of the Community Feasibility Study. To achieve Phase Initial COD before the disposal crisis deepens past the point of structural emergency, the Community Feasibility Study must be authorized no later than Q3 2026. The NEPZA Free Trade Zone Enterprise License application — which fixes the P1 site within the LFTZ South/West Quadrant — must follow within four months of T0.
Fiscal Position
Circular Royalty payments begin 13 months after the corresponding TMC Fee payment, on a rolling monthly basis. This is not an annual switch-on event — each TMC Fee payment generates a corresponding Circular Royalty payment 13 months later. At steady state, the Circular Royalty is designed to exceed the TMC Fee on a per-ton basis. Gross cost displacement is quantified separately from Circular Royalty cash flow; full net fiscal position reflects both.
Key Facts
| Parameter | Value | Classification |
|---|---|---|
| Corridor addressable feedstock | 1,330 TPD · 485,450 tpy | ESTIMATED |
| Current disposal cost (FWDC planning basis) | $14/ton blended | ESTIMATED |
| TMC Fee (Year 1) | $22.00/ton · escalates 2.5%/year | MODELLED |
| Gross cost displacement (Year 1) | −$8/ton vs. FWDC (TMC exceeds current rate) | MODELLED |
| Circular Royalty — Year 1 | $0 · pre-royalty period (13-month rolling lag) | LOCKED |
| Royalty payment structure | 13 months after each corresponding TMC Fee payment · rolling monthly · not annual | LOCKED |
| Net fiscal position — Year 2 (Phase Initial) | +$562,100/year (+$4.46/ton net) | MODELLED |
| Net fiscal position — Year 30 (Phase Initial) | +$3,217,150/year (+$22.07/ton net) | MODELLED |
| 30-year cumulative net (Phase Initial) | ~+$60M | MODELLED |
| Lagos State capital obligation | $0 · Build-Own-Operate structure · all capex Carbotura SPV | LOCKED |
| Hard disposal deadline | Olusosun/Solous III: 18-month decommissioning commenced Dec 2024 · target mid-2026 | VERIFIED |
| Epe landfill status | CLOSED · WTE conversion underway (Harvest Waste Consortium) | VERIFIED |
| Procurement decision deadline | Q3 2026 · Community Feasibility Study authorization | VERIFIED |
| First Circular Royalty payment | T0 + 37 months (13 months after Phase Initial COD at T0 + 24) | LOCKED |
| Phase Initial direct employment | 285 FTE direct · 570 indirect | BASELINE |
| Site | LFTZ South/West Quadrant, Ibeju-Lekki LGA · NEPZA Free Trade Zone · zero tax, zero import duty | VERIFIED |
What Delay Costs
The LFZDC letter of intent for the LFTZ South/West Quadrant site is the irreversible instrument — once a competing enterprise is allocated the Priority 1 footprint, the Phase Initial site configuration requires renegotiation with materially different logistics and NEPZA status characteristics. If the Community Feasibility Study is not authorized by Q3 2026, Phase Initial COD slips from 2028 to 2029 at the earliest — extending the pre-royalty period by a full year and deferring approximately $3.85M in Year 2 royalty. Every quarter of delay costs approximately $960,000 in deferred royalty cash flow. Additionally, each quarter without a signed COA is a quarter in which corridor PSP operators have no contracted local destination for feedstock past the Olusosun closure — driving illegal dumping, lagoon contamination, and escalating FWDC costs that compound the State A burden.