Public Private Partnership in power sector

Recently, the Minister for Power, Works and Housing, Babatunde Raji Fashola called for Public Private Partnership (PPP) in financing projects and providing infrastructure in the power sector. Speaking at the opening of a two-day European Union (EU)-Nigeria business forum in Lagos, the minister listed areas of investment to include distribution companies needing capital for purchase of meters, gas supply, generation companies, Transmission Company of Nigeria (TCN), rural electrification and promotion of coal and solar power.
We cannot but agree with the minister on the need for such partnership if country is to solve the embarrassing epileptic power supply that been its lot over the years. Without doubt, PPP is as a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.
This arrangement is based on the recognition that both parties can benefit from pooling their financial resources and expertise to improve the delivery of basic services to all citizens. There is no doubt that governments alone cannot meet the constantly growing demand for electricity and therefore need to look for support from other sources.  As government revenues continue to dwindle, partnerships become imperative as means of providing a continued and improved level of service at reduced costs.
No doubt, advantages of PPP include removing the responsibility of funding the investment from the government’s balance sheet; introduce competition; adopt managerial practices and experience of the private sector; restructure public sector service by embracing private sector capital and practices and to achieve greater efficiency in providing public services. Definitely, the infrastructure stock, particularly in the power sector is far from being adequate, especially when compared to countries such as Brazil, Turkey, India, and South Africa.
This sad development is responsible for the declining manufacturing and industrial productivity in the county.  When the former Power Holding Company of Nigeria (PHCN) was unbundled more than five years ago, to make way for private sector initiatives, rather than improve, the situation has been getting worse by the day.
There is no denying that the dearth of qualitative manpower needed to run the present day power sector, is sorely lacking.  For a start, there are three key areas where Private Public Partnership can be effective within the Nigerian power reform. The first is in gas production and transport. Another area is in the main trunk pipeline for transportation of gas.
The government and private sector can undertake such projects to ensure that the gas pipelines for transportation of gas are constructed.  Clearly, there are three areas where PPP financing can help to achieve speed and efficiency in project development, construction and operation along the value chain of the power sector.
For example, there is a ready market for solar power developers to operate in, in view of the huge demand for power supply; high population density; and the fact that solar power projects take less time to reach commercial operations compared to the conventional gas-fired generation.
Therefore, solar is a major energy resource in Nigeria from a geographical perspective. Analysts have projected that Nigeria could generate600, 000MW by deploying Solar PV panels from just 1 percent of Nigeria’s land mass.