"Gov\u2019t Tables Legislative Instrument to Enforce Competitive Bidding for Power Procurement Contracts"

Gov’t Tables Legislative Instrument to Enforce Competitive Bidding for Power Procurement Contracts

In a decisive move to curb inefficiencies in Ghana’s energy sector, government has laid before Parliament a Legislative Instrument (LI) that mandates competitive bidding for all future power generation contracts.

Announcing the policy shift on Tuesday, April 23, 2025, during a session on the Ghana Energy Compact under the World Bank’s Mission 300 initiative, Finance Minister, Dr Cassiel Ato Forson, said the LI seeks to inject greater transparency and discipline into power procurement.

“We have submitted the LI to Parliament to make competitive procurement of power plants the standard approach,” Dr Forson disclosed. “If we are serious about fixing the deep-rooted problems in the energy sector, this is a necessary step.”

Dr Forson lamented that inefficiencies across the energy value chain—particularly within the Electricity Company of Ghana (ECG)—have created a financial shortfall of approximately US$2 billion.

“ECG alone could reduce the shortfall by half if it addressed its internal challenges,” he stressed. “We cannot continue to pass these losses on to consumers.”

The Finance Minister further explained that the LI forms part of a broader strategy to eliminate procurement-related mismanagement and ensure that the financial burden of sector inefficiencies no longer falls on the Ghanaian public through higher tariffs and levies.

He called on lawmakers to expedite the passage of the LI, underscoring its significance to the success of the Ghana Energy Compact.

“Time is of the essence,” Dr Forson asserted. “The reforms we are proposing must be backed by swift and deliberate legislative action.”

The proposed regulation comes against the backdrop of ongoing structural issues in Ghana’s power sector, including ballooning legacy debts, excess capacity charges, and persistent operational inefficiencies. The move is expected to strengthen fiscal prudence and restore investor confidence in the sector.