Ghana in talks to buy Teshie desalination plant to avoid US$235m arbitration award

Pinned summary · as of 06:03

The government is negotiating to take over the idle Teshie desalination plant in Accra from its owner, Befesa, as a way of escaping a US$235 million arbitration award against Ghana Water Company Limited. The Attorney-General's office disclosed the talks in Accra on Wednesday, 23 September, days after news of the award became public.

What we know

• The state legal office headed by the Attorney-General disclosed that the government is in talks with Befesa, the plant's owner, to buy the Teshie facility, and that the talks began before the tribunal handed down its final decision.
• According to the Attorney-General's office, the purpose of the purchase is to avoid paying the US$235 million, and it reported significant progress in the negotiations.
• Two final arbitration awards issued on 17 September require Ghana Water to pay a total of US$235 million after taxes, arising from the terminated agreement under which it bought water from the plant. Cox, the Spanish group that owns 95% of Befesa's Ghana company, announced the outcome.
• Standard Bank of South Africa joined Befesa on the claimant side of the dispute with Ghana Water.
• Interest on the award runs from 1 April 2026 until payment, the tribunal largely threw out Ghana Water's counterclaims, including one worth US$144.5 million, and it ordered the utility to cover part of Befesa's legal costs.
• A state guarantee tied to the project extends the financial liability to the Republic of Ghana.
• The government says a purchase would hand the state full ownership of the plant, and it wants the talks wrapped up quickly so that the facility can operate again.
• The plant serves parts of eastern Accra. It was built as a 25-year build-own-operate-transfer project, with a design output of 60,000 cubic metres daily.
• Ghana Water was reported to be paying about GH₵6.75 a unit for desalinated water while the approved tariff let it charge about GH₵1.47 a unit; The Ghana Report attributed those figures to the utility itself.

What's disputed / unconfirmed

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  The Attorney-General's office said it is seeking a purchase price well below what the claimants pursued in the arbitration. That has not been backed by other reports, and The Vaultz News noted that the statement gave no price, no financing plan and no date for a final agreement.
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  Accounts differ on who ended the water purchase agreement. The Custodian said the government terminated it in 2020, citing the burden on Ghana Water. The Vaultz News, relaying the tribunal's findings, said Befesa terminated it validly, and Ghana Business News reported the Attorney-General's office saying Befesa had no choice but to do so.
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  Reports give different construction costs for the plant: The Custodian said US$126 million, while The Vaultz News, citing the Ministry of Finance's 2024 public-private partnership report, and a Ghana Report opinion piece said US$125 million.
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  Ghana Business News reported the Attorney-General's office alleging that the previous NPP government and Ghana Water neglected to pay for water supplied to Teshie and nearby areas over many years of operation. No other report carries this allegation and no response from the NPP is included.
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  According to the Attorney-General's statement as relayed by The Vaultz News and Ghana Business News, the claimants had sought about US$402 million in unpaid water charges as well as termination payments, but the tribunal held the two could not be recovered together, leaving the US$235 million, which the statement put at 58.4% of the monetary claim. A parallel arbitration against the state under the guarantee is also mentioned.
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  Cox told The Vaultz News that talks toward an amicable settlement are continuing; no other report confirms this.
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  The Custodian reported that Ghana Water shut the plant in October 2025 and that it has been idle since, disrupting supplies to Teshie, Nungua, Spintex and parts of Sakumono and La, where residents have turned to water tankers and boreholes. No other report gives these details.
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  A Ghana Report opinion writer argued that the arrangement of buying water at a high price and selling it cheaply was unsustainable, and estimated commercial tanker water in Accra at between GH₵90 and GH₵110 a cubic metre. These are the writer's views and estimates.

Why it matters for Ghana

Households and businesses in Teshie, Nungua and neighbouring parts of eastern Accra depend on this plant for part of their water, so the outcome of the talks affects how soon the taps could run again. For taxpayers, the state guarantee means a payment that Ghana Water cannot meet could fall on public money. The absence of a stated purchase price leaves open how much the deal would cost compared with the award.