Gov't negotiates purchase of Teshie Desalination Plant at lower price to avoid $235m arbitration award

The Ghanaian government is making substantial headway in talks aimed at acquiring the Teshie Desalination Plant from Befesa, in an effort to sidestep a US$235 million payout, according to a statement released by the Office of the Attorney-General on Wednesday, September 23. This development follows the International Chamber of Commerce (ICC) tribunal's final ruling in the dispute over the plant's Water Purchase Agreement.

Despite the commencement of legal proceedings and prior to the final award, Ghana and Befesa have been engaged in negotiations to purchase the Teshie Desalination Plant at a price lower than the sums demanded in arbitration, the statement disclosed. The acquisition would result in full state ownership of the facility and avert additional expenses tied to maintaining water supply to approximately one million residents in eastern Accra.

The Attorney-General's office expressed optimism that negotiations would conclude "within the shortest possible time" to enable the plant to resume full operation. This move follows the tribunal's decision to order Ghana Water to pay US$235 million in termination payments to Befesa. The tribunal ruled that Befesa's termination of the agreement was valid, but dismissed the company's claim for around US$402 million in unpaid water charges, arguing that both claims could not be combined.

The Teshie Desalination Plant, capable of generating 60,000 cubic meters of water daily, has been idle since October 2025 due to unresolved contractual and maintenance matters. Its shutdown has impacted water supply to areas such as Teshie, Nungua, Spintex, and parts of Sakumono. Hence, the government's proposed purchase is pursued to resolve the financial dispute and restore the plant's contribution to water supply in affected regions.

The exact purchase price and terms of the negotiations remain undisclosed, and an agreement has not yet been finalized.