How Ghana incurred US$235m over Teshie desalination plant dispute

The dispute over the Teshie desalination plant has ended in a major international arbitration award, with Ghana Water Limited ordered to pay about US$235 million to the company behind the project.

The award followed the termination of a water purchase agreement under which Ghana Water bought treated seawater from the Teshie plant.

Cox, the Spanish infrastructure group that owns 95% of Befesa Desalination Developments Ghana Limited, announced that an International Chamber of Commerce arbitration tribunal issued two final decisions on September 17, 2026.

According to the company, the amount awarded is net of taxes and will attract interest from April 1, 2026, until it is fully paid.

The tribunal also largely rejected counterclaims filed by Ghana Water against the project company, including a US$144.5 million claim.

Ghana Water was further ordered to contribute to the legal costs incurred by the project company.

Under a state guarantee attached to the project, the Republic of Ghana was also found liable for the amounts awarded.

Cox, however, said the project company would not be allowed to recover the same sums twice.

The dispute traces back to the shutdown of the Teshie desalination plant in October 2025.

Ghana Water halted operations at the facility after unresolved contractual issues and concerns over maintenance.

The shutdown affected water supply to communities including Teshie, Nungua, Spintex, parts of Sakumono and La.

Residents in the affected areas have since had to rely on other sources of water, including tankers and boreholes.

In February 2026, President John Dramani Mahama directed the Finance Minister, the Attorney-General and Ghana Water to engage the shareholders of the plant to find a way to resolve the dispute.

The engagement was also expected to help bring the facility back into operation.

Ghana Water Managing Director Adam Mutawakilu later said the utility was working towards a settlement that would allow the plant to resume supplying water to affected communities.

A key issue in the dispute was the cost of desalinated water from the facility.

Ghana Water was reportedly buying water from the plant at GH¢6.75 per unit, while the approved tariff allowed the utility to sell it at GH¢1.47.

That created a substantial gap between the cost of buying the water and the revenue Ghana Water could recover from consumers.

The Teshie desalination plant was commissioned in 2015 at a cost of US$126 million.

It was developed under a 25-year build-own-operate-transfer arrangement.

The plant was designed to produce about 60,000 cubic metres of water daily, enough to serve up to 500,000 people in the Teshie-Nungua catchment area.

Cox became the majority shareholder in the project company after acquiring assets of Spanish engineering firm Abengoa in 2023.

The arbitration ruling now leaves Ghana facing a significant financial liability from a project originally intended to improve water supply in parts of Accra.