Power transmission is the life blood of getting electricity to the consumers. This is one aspect that is still being controlled by the Federal Government of Nigeria. Industry analysts have said that massive investment would be required to achieve rapid expansion and modernisation of the transmission infrastructure, which is largely in a decrepit state and the public private partnership (PPP) model is necessary since failure to drive significant increase in transmission capacity, which is a very critical link along the electricity value chain, is capable of jeopardising the ongoing reforms in the sector.

1. PUBLIC PRIVATE PARTNERSHIPS: ELECTRICITY
TRANSMISSION INFRASTRUCTURE GAP IN NIGERIA
How Can PPPs Help Deliver Better Services?
Usman Olajide
Lagos-Nigeria
June 2015

2. INTRODUCTION
This presentation focuses on Nigeria Electricity Transmission infrastructure
challenges and how PPPs can help deliver better electricity services and values.
Key Focus context areas are:
• Infrastructure gap ( ie: poor quality - inadequate - inefficient - unreliable - aging
- badly managed infrastructure) is a major challenge to economic growth,
particularly in developing countries like Nigeria.
• Public procurement alone cannot meet the demand for infrastructure
development needs.
• Public Private Partnerships (PPP) offer a useful tool and mechanism to meet
infrastructure investment project challenges
• With good frameworks, institutional support and political champions PPPs can
help governments in the infrastructure development
Source: https://class.coursera.org/effectiveppp-001/lecture

3. Global Infrastructure Gap

4. INFRASTRUCTURE NEEDS IN NIGERIA
 The transmission system is potentially the weakest link in the entire chain of the
Nigeria electricity network. Inadequate transmission infrastructure has been
consistently highlighted as being responsible for stranded capacity that is
characteristic of the electricity grid. Consequently, significant investment is
required to improve the transmission system if it is to keep pace with the
expected growth in the generation capacity and consumers’ expectations of
improved power supply.
 There is also the need for considerable expansion of the distribution network to
accommodate the demand for power from consumers. issues such as supply of
prepaid meters to consumers to enable proper metering and billing system would
need to be addressed in order to prevent revenue leakages.
Source: Guide to the Nigerian Power Sector, 2013, KPMG Advisory Services

5. INFRASTRUCTURE NEEDS IN NIGERIA
 Though the power generation and distribution has been sold to the private but
the transmission is still controlled by the state owned Transmission Company of
Nigeria and even at that the consumers do not get value for their money
 Thus to solve these challenges, the government needs to build private sector
confidence to join in PPPs for Transmission infrastructure projects.
Source: Guide to the Nigerian Power Sector, 2013, KPMG Advisory Services

6. What does Public-Private -Partnerships do?
The ABC’s of Public-private partnership
Improve access to
basic services
A• Accelerated construction
• On-time and On-budget delivery
• Shifting risk to private sector
• Regular maintenance and
upgrade
Increase quality and
efficiency
B
• Higher quality service standard
• Better identification and
allocation of risks
• Sharing risks with private
partner
• Increased efficiency of facilities
and services
• Access to best practices and
private expertise
Mobilise capital
C• Access to new private financing
• Better budgetary efficiency
• Value for money
Source: http://www.ifc.org/wps/wcm/connect/AS_EXT_CONTENT/What+We+do/IFC+and+PPPs

7. Ingredients to a successful PPP

8. What can Nigeria do to benefit from PPP frameworks
• Government of Nigeria should use Public-Private Partnerships (PPPs) as a potential mechanism to
procure and implement power infrastructure and/ or services using the resources and expertise
of the private sector.
• The power sector is facing challenges due to lack of good infrastructure and need for more
efficient services, a partnership with the private sector can help foster new solutions and bring
finance.
• PPPs combine the skills and resources of both the public and private sectors through sharing of
risks and responsibilities. This will enable government to benefit from the expertise of the private
sector, that allows them to focus instead on policy, planning and regulation by delegating day-to-
day operations.
• In order to implement successful PPPs in Nigeria, a careful analysis of the long-term national
infrastructure development objectives and risk allocation is essential. The legal and institutional
framework in the country also needs to support this new model of service delivery and provide
effective governance and monitoring mechanisms for PPPs. A well-drafted PPP agreement for the
projects should clearly allocate risks and responsibilities.
• The federal government can get advice for its PPP programme from infrastructure resource
centres of World Bank, Asian Development Bank etc and for setting up a central PPP Unit to
spearhead its infrastructure development.
Source: Learning Resources of the World Bank Group Open Learning Course 2015: How can PPPs help deliver better services?

9. PPP Strategy for Electricity Transmission
 Build a long-term electricity transmission projects derived from a National
Integrated Power plan
 Establish a competent National PPP unit and build capacity in necessary
professional skills and talent to manage the PPP Unit and PPP processes
 Regionalised the power projects based on sound economic, business and cost-
benefit analysis and carry out a VFM analysis confirming the PPP is a better deal
for taxpayers than traditional government procurement
 Adapt methodical and staged approach to PPP programs with a degree of
standardization in the project preparation, evaluation and procurement process
 Ensure transparency around the PPP program and avoiding corrupt practices to
get broad buy-in from the private sector and the general public.
 Encourage private initiatives and establish necessary PPP & legal frameworks
 Implement one or two successful infrastructure PPP projects to convey the
message “How PPPs deliver better services”
Learning Resources : World Bank Group Open Learning Course 2015: How can PPPs help deliver better services?

10. PPPs in the Nigeria power sector will play
an important role as the private sector
will provide necessary technical expertise
at optimum cost provided the
Government formulates fair pricing policy
through frameworks that is transparent,
good contracting and carry out
preparatory work for the PPP.
Conclusion

11. Thank You