Ghana Water ordered to pay $235m over Teshie desalination plant dispute
Ghana Water Limited has been directed to pay US$235 million to the Spanish-owned company behind the Teshie desalination plant following a dispute over the termination of a water purchase agreement.
Spanish infrastructure group Cox, which holds a 95% stake in the Ghanaian project company, Befesa Desalination Developments Ghana Limited, announced on Monday, September 21, that the International Chamber of Commerce (ICC) arbitration tribunal had issued two final rulings on September 17.
According to Cox, 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 on the amount from April 1, 2026, until the payment is made.
The tribunal also dismissed most of the counterclaims filed by Ghana Water against the project company, including a US$144.5 million claim. It further directed the utility to contribute towards the company’s legal expenses.
Under a state guarantee linked to the project, the Republic of Ghana has also been held liable for the amounts awarded. Cox, however, clarified that the project company would not be permitted to recover the same sums twice.
The dispute concerns the Teshie desalination plant, which has been out of operation since October 2025, when Ghana Water shut it down amid unresolved contractual disagreements and maintenance concerns.
The shutdown has disrupted water supplies to several communities, including Teshie, Nungua, Spintex, parts of Sakumono and La. Residents in these areas have since relied on alternative sources such as water tankers and boreholes.
In February 2026, President John Mahama directed the Finance Minister, the Attorney-General and Ghana Water to engage the plant’s shareholders in negotiations to settle the dispute and pave the way for operations to resume.
Ghana Water’s Managing Director, Adam Mutawakilu, subsequently indicated that the utility was working towards an agreement that would enable the facility to restart water production and supply to affected communities.
At the heart of the financial disagreement is the price of water supplied by the plant. Reports indicate that Ghana Water was purchasing desalinated water at GH¢6.75 per unit, while the approved tariff permitted it to sell the water at GH¢1.47, leaving a substantial difference between procurement costs and revenue.
The US$126 million facility was commissioned in 2015 under a 25-year build-own-operate-transfer (BOOT) agreement. It was designed to produce 60,000 cubic metres of water daily, serving up to 500,000 people within the Teshie-Nungua catchment area.
Cox acquired the assets of the former Spanish engineering firm Abengoa in 2023 and subsequently became the majority shareholder in the Ghanaian project company.
The latest arbitration ruling increases Ghana’s financial exposure to international legal claims, adding pressure on the state as it works to address disputes involving major infrastructure and investment projects.
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