Ghana Water ordered to pay $235m over Teshie desalination plant dispute

Ghana Water Limited faces a substantial $235 million judgment from a Spanish-owned company over the termination of a water purchase agreement concerning the Teshie desalination plant. The Spanish infrastructure group, Cox, owns 95% of Befesa Desalination Developments Ghana Limited and recently announced the final arbitration tribunal decision on September 17.

The award, net of taxes, pertains to payments stemming from the agreement's termination for purchasing treated seawater from the Teshie plant. Interest on the amount will accrue starting April 1, 2026, until full payment. The tribunal also mostly dismissed Ghana Water's counterclaims, including a $144.5 million claim. Additionally, Ghana is held liable for the awarded sums under a state guarantee attached to the project.

The dispute arose following the Teshie desalination plant's shutdown in October 2025 due to unresolved contractual matters and maintenance concerns, affecting water supply to communities like Teshie, Nungua, and La. In response, President John Dramani Mahama directed relevant officials to engage the plant's shareholders to resolve the dispute and resume operations.

At the core of the issue is the cost of desalinated water, where Ghana Water purchased water at GH¢6.75 per unit while the tariff allowed them to sell it at GH¢1.47, creating a substantial difference between production costs and revenue. The $126 million Teshie desalination plant was commissioned in 2015 under a 25-year build-own-operate-transfer arrangement.