Ghana Loses $235m In Desalination Arbitration
Ghana is facing a potential US$235 million liability following two arbitration awards in favour of Befesa Desalination Developments Ghana Limited (BDDG) over the termination of the Water Purchase Agreement Read More... The post Ghana Loses $235m In Desalination Arbitration appeared first on DailyGuide Network .
Ghana faces a potential US$235 million financial obligation following two arbitration rulings in favor of Befesa Desalination Developments Ghana Limited (BDDG) regarding the termination of the Water Purchase Agreement (WPA) for the Accra desalination plant. The arbitral tribunals delivered their decisions on September 17, 2026, in separate disputes involving BDDG and Ghana, and BDDG and the Ghana Water Company Limited (GWCL).
The disputes centered on compensation arising from the cessation of the WPA concerning the Teshie-Nungua desalination project. One tribunal ordered GWCL to partially reimburse BDDG for legal expenses, while the other tribunal determined that Ghana is obligated to pay the awarded sums under a guarantee connected to the project. However, safeguards against double recovery prevent BDDG from seeking the same amounts multiple times in both proceedings.
The tribunals also dismissed counterclaims filed against BDDG, including one amounting to US$144.5 million. The arbitration cases were initiated in 2025 due to years of operational and financial challenges faced by the Accra desalination project. The Teshie-Nungua plant, which began operations in 2015, was the first desalination facility of its kind in West Africa and was developed under a public-private partnership.
In 2024, a review of Ghana's Public-Private Partnership projects identified several issues impacting the facility, such as frequent power outages affecting its efficiency. BDDG reported the plant becoming inoperable in May 2024 due to unsafe conditions following heavy rainfall, with a subsequent study revealing structural defects and inadequate reinforcement.
GWCL attributed the issues to poor maintenance and neglect. Financial difficulties further exacerbated the challenges, with the government and GWCL struggling to meet their payment obligations on time. These fiscal constraints, combined with operational problems, led to discussions among stakeholders on restructuring the project and revising the WPA.
The termination of the agreement ultimately formed the basis for the arbitration proceedings involving BDDG, Ghana, and GWCL.
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