Ghana Water Limited Ordered to Pay US$235 Million Over Teshie Desalination Plant Dispute

• An ICC arbitration court issued two final decisions against Ghana Water Limited on September 17, awarding the sum to Spanish infrastructure group Cox
• The ruling also rejected a US$144.5 million counterclaim brought by Ghana Water, with the utility ordered to contribute to the company's legal costs
• The Republic of Ghana faces liability under a state guarantee attached to the project, adding to the country's exposure to international arbitration claims

An international arbitration court has ruled that Ghana Water Limited must pay US$235 million to Cox, the Spanish infrastructure group that controls the company operating the Teshie desalination plant, following the termination of a water purchase agreement between the two parties.

Cox, which holds a 95% stake in Befesa Desalination Developments Ghana Limited, announced on Monday, 21 September, that the International Chamber of Commerce arbitration tribunal had issued two final decisions on 17 September.

The Law Platform reported that the award, net of taxes, covers payments arising from the termination of the agreement under which Ghana Water purchased treated seawater from the plant. Interest will accrue from 1 April 2026 until the full amount is settled.

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The tribunal dismissed counterclaims filed by Ghana Water against the project company, including a US$144.5 million claim, and directed the utility to contribute towards the company's legal costs.

Under a state guarantee linked to the project, the Republic of Ghana has also been found liable for the awarded sums, though Cox confirmed the project company cannot recover the same amounts from both parties simultaneously.

The origins of the dispute lie in a pricing imbalance that made the arrangement financially unsustainable for Ghana Water. The utility was purchasing desalinated water at GH¢6.75 per unit while the approved tariff permitted it to sell the water to consumers at only GH¢1.47 per unit, leaving a substantial gap between procurement costs and recoverable revenue.

Teshie Plant Has Been Idle Since October 2025

The Teshie plant was shut down in October 2025 after Ghana Water suspended operations amid unresolved contractual issues and concerns about maintenance.

The closure has disrupted water supply to communities in Teshie, Nungua, Spintex, parts of Sakumono and La, with residents turning to water tankers and boreholes as alternatives.

In February 2026, President John Mahama directed the Finance Minister, the Attorney-General and Ghana Water to enter negotiations with the plant's shareholders to resolve the dispute and restore operations. Ghana Water Limited's Managing Director, Adam Mutawakilu, subsequently indicated that the utility was pursuing a settlement that would allow the facility to resume supply.

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The plant was commissioned in 2015 under a 25-year build-own-operate-transfer arrangement at a cost of US$126 million.

It was designed to produce 60,000 cubic metres of water daily, serving up to 500,000 people in the Teshie-Nungua catchment area. Cox took over the assets of former Spanish engineering firm Abengoa in 2023, becoming the majority shareholder of the Ghanaian project company in the process.

The latest ruling adds significantly to Ghana's outstanding liabilities from international arbitration proceedings involving major infrastructure projects.

Ghana slapped with a hefty judgment debt

YEN.com.gh reported that a US court has granted a judgment in favour of the Ghana Power Generation Company, a subsidiary of Trafigura.

Ghana has been ordered to pay the multinational company Trafigura $111,493,828.92 with interest.

In 2021, Trafigura sued the Ghana government for terminating two power deals and was awarded a judgment debt of approximately $140 million.

Source: YEN.com.gh