Attorney General reacts to $235m Teshie desalination plant saga

The Office of the Attorney-General and Minister of Justice in Ghana has announced that the country will not be required to pay the full US$402 million claim brought by Befesa Desalination Developments Ghana Limited in the Teshie Desalination Plant dispute. The US$235 million figure awarded represents 58.4% of the benchmark monetary claim.

The dispute stems from the termination of a Water Purchase Agreement between Befesa and the Ghana Water Company Limited. The International Chamber of Commerce arbitration tribunal rejected Befesa's claim for approximately US$402 million in unpaid water charges but granted US$235 million in termination payments. The tribunal also ordered Ghana to reimburse 58.4% of the claimants' reasonable legal and representation costs.

The project's termination occurred following Befesa's claim in October 2024. The tribunal found that Befesa had lawfully ended the agreement, thus entitling it to contractual termination payments. However, the US$402 million claimed for unpaid charges could not be recovered concurrently with the termination payments. The awarded US$235 million includes interest up to March 31, 2026, with additional interest accruing from April 1, 2026.

Befesa had also initiated a separate arbitration claim against the Republic of Ghana under the state guarantee, which largely mirrored the earlier ruling against Ghana Water and held the state accountable for the utility's obligations. Before the award, Ghana was engaged in negotiations with Befesa regarding the potential acquisition of the Teshie Desalination Plant.

If agreed upon, this would allow the state to own and operate the plant, thereby avoiding further costs and ensuring water supply to the intended beneficiaries. The Attorney-General stated that efforts are ongoing to finalize these negotiations, with the aim of Ghana not having to pay the entire US$235 million award.