Ghana Water Company Limited (GWCL) has been ordered to pay US$235 million to Befesa Desalination Developments Ghana Limited, the company behind the Teshie-Nungua desalination plant, following a major international arbitration dispute over the termination of a water purchase agreement.
The ruling was issued through two final arbitration awards dated September 17, 2026, involving Ghana Water and the Republic of Ghana in connection with the Accra desalination project and its associated state guarantee.
Cox Wins US$235 Million Arbitration Award
Spanish infrastructure group Cox, which controls 95% of Befesa Desalination Developments Ghana Limited, announced that the arbitration tribunal awarded the project company US$235 million, net of taxes, in termination payments under the Water Purchase Agreement.
Interest on the amount will accrue from April 1, 2026, until the date of effective payment. Ghana Water has also been ordered to contribute partially toward the project company’s legal expenses.
The tribunal substantially rejected counterclaims brought by Ghana Water, including a US$144.5 million claim against the project company.
Republic of Ghana Liable Under State Guarantee
The arbitration decisions also determined that the Republic of Ghana is liable under the state guarantee attached to the desalination project for the amounts recognised in the awards.
However, the ruling does not permit the project company to recover the same amount twice. Cox has also clarified that the US$235 million represents amounts recognised within the project’s financial structure and does not directly translate into net cash attributable to the Spanish group.
Teshie Desalination Plant Dispute
The dispute centres on the Teshie-Nungua desalination plant in Accra, which was developed under a build-own-operate-transfer arrangement and was designed to produce about 60,000 cubic metres of water per day.
The project was intended to improve water supply to communities across parts of Accra, including Teshie, Nungua, Spintex, Sakumono and surrounding areas. Ghana Water’s own project documentation describes the plant as a 60,000m³-per-day seawater reverse-osmosis facility.
The plant has been at the centre of prolonged contractual and financial disagreements between Ghana Water and the private project company.
Impact on Water Supply in Accra
The dispute has raised concerns about water supply in Teshie, Nungua, Spintex, Sakumono and other parts of Accra, where residents have faced challenges obtaining reliable water supplies.
The desalination project was established to supplement Ghana’s water production capacity and support communities in the Teshie-Nungua catchment and surrounding areas.
Ghana Continues Discussions Over Desalination Project
Despite the arbitration awards, Cox said the parties continue to negotiate toward an amicable settlement without affecting the rights established under the arbitration decisions.
The final economic and accounting impact of the award will depend on factors including the actual recovery of the funds, the project’s financial structure, third-party rights and the applicable accounting treatment.
The US$235 million ruling adds another significant international arbitration dispute involving Ghana and a major infrastructure project, with implications for the country’s public finances and the future of the Teshie-Nungua desalination facility.
Source: newsthemegh.com