Government Moves to Resolve US$235m Teshie Desalination Award
The Government has intensified negotiations with Befesa Desalination Developments Ghana Limited to acquire the Teshie Desalination Plant at a significantly lower cost, following an International Chamber of Commerce (ICC) arbitral award of approximately US$235 million in favour of Befesa and Standard Bank of South Africa Limited.
The award follows an arbitration arising from a Water Purchase Agreement (WPA) between the Ghana Water Company Limited (GWCL) and Befesa for the operation of the desalination plant in Accra.
In a statement issued by the Office of the Attorney-General and the Ministry of Justice on Wednesday, the Government said the tribunal found that Befesa had validly terminated the WPA and that Ghana Water was liable for contractual termination payments.
The arbitration, ICC Case No. 29029/CPB, was commenced by Befesa and Standard Bank on October 23, 2024, following disputes arising from the termination of the agreement, including claims relating to unpaid water charges and termination payments.
The claimants had initially sought approximately US$402 million in alleged unpaid charges for water supplied, in addition to a US$235 million claim for contractual termination payments.
The tribunal ruled that the two claims could not be recovered cumulatively and consequently dismissed the US$402 million claim in its entirety.
It awarded the claimants approximately US$235 million, net of taxes, as termination payment, inclusive of pre-award interest calculated up to March 31, 2026. The award also provides for continuing interest from April 1, 2026, on the debt component of the termination payments.
The Attorney-General noted that the award represented a significant reduction from the monetary amount initially sought by the claimants.
The Government said that notwithstanding the arbitration, it had engaged Befesa in negotiations to acquire the Teshie Desalination Plant at a price significantly lower than the amounts pursued in the arbitration.
According to the Attorney-General, the proposed acquisition would enable the State to assume full ownership of the facility while avoiding additional costs beyond those required to maintain water supply to communities in the eastern part of Accra.
The Government said negotiations had made significant progress and expressed the hope that an agreement would be reached soon, potentially avoiding payment of the US$235 million arbitral award.
The Teshie Desalination Plant is an important source of potable water for communities in eastern Accra, and the Government said securing its continued operation remained a key consideration in efforts to resolve the matter.
The statement noted that a separate but related arbitration, ICC Case No. 29030/CPB, was brought by Befesa against the Government of Ghana under Ghana’s State Guarantee.
The Attorney-General said the tribunal had also rendered a final award in that matter, which substantially followed and referred to the award in the arbitration involving Ghana Water.
The tribunal principally held Ghana liable for liabilities owed by Ghana Water under the relevant arrangements.
The Government said it remained committed to resolving the matter in a manner that would safeguard continued water supply to affected communities while addressing the financial and contractual implications arising from the arbitration.
Judith Twumwaa, ISD
