The World Bank has forged an agreement with the government to cease sole sourcing for all new contracts in the energy domain. This initiative is part of a broader set of reforms supported by the World Bank to usher in critical changes within the sector.
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The decision to pivot away from sole sourcing comes in response to pressing concerns regarding key issues within Ghana's energy landscape. Of particular concern are challenges pertaining to revenue mobilization, the reduction of waste and losses in power distribution, and the mitigation of transmission losses. Additionally, the nature of contracts signed with Independent Power Producers in the country has drawn scrutiny, further underscoring the imperative for reform within the sector.
Following the agreement, the World Bank has stipulated that all contracts signed from 2024 onwards must be executed through competitive bidding, marking a pivotal shift in procurement processes. Mr. Pierre Laporte, the Country Director of the World Bank, expressed confidence in the potential of this transformation, highlighting its capacity to address issues of value for money and enhance project execution within the energy sector. Emphasizing the potential benefits of this arrangement, Mr. Laporte remarked, "We believe that this arrangement may help in ensuring that Ghana gets the best deal and value for money.
Amidst concerns about the government's decision to enter into new contracts, particularly following prior criticisms directed at the former administration regarding an "Over Supply of Power," Mr. Laporte clarified that power contracts could be exempted if they pertain to sectors necessitating fresh investments. Furthermore, he advised the government to place a greater focus on green energy initiatives, noting the declining costs associated with undertaking such projects.
In addition to reforms within the energy sector, Mr. Laporte stressed the need to ensure that Ghana optimally benefits from mining and oil contracts within the extractive sector, underscoring the pivotal role of sound management in ensuring the nation's advantageous position in these domains.
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