The Ghana Water Company Limited has been ordered to pay $235 million to the Spanish owners of the Teshie-Nungua desalination plant, a facility built to address chronic water shortages in the area. The plant, which was shut in October 2025, was constructed at a cost of $125 million and has been embroiled in a dispute over contractual obligations. The Republic of Ghana is liable for the money under a sovereign guarantee approved by Parliament in 2012.
The dispute centers on the termination of the Water Purchase Agreement, with the arbitral awards rendered on September 17 against Ghana Water and the Republic. Cox Infrastructure Group, which owns 95 percent of the plant's project company, disclosed the awards to the Spanish securities market on September 21. The $235 million, net of taxes, covers termination payments under the Water Purchase Agreement, with interest accruing from April 1, 2026, until the money is actually paid.
The utility must also partially reimburse the company's legal costs, and its own counterclaims, including one for $144.5 million, were substantially dismissed. The award is nearly twice what the plant cost to build, with the government's 2024 report on public private partnerships putting the project at $125 million. This development comes six months after the government said the matter was all but settled.
In March, Works and Housing Minister Kenneth Gilbert Adjei told journalists that a deal was close, stating that the President had directed him, the Finance Minister, and the Attorney General to ensure that the matter was resolved. However, interest on the award began running about three weeks before he spoke. The guarantee that now binds the Republic was not an accident of drafting, as Parliament approved it.
The taps went off first when Ghana Water shut the plant in October 2025 over unresolved contractual obligations and what it called a culture of missing maintenance. Teshie, Nungua, Baatsona, Spintex, Sakumono, and parts of La have been dry or rationed ever since. By January 8, with residents agitating, the utility published a rationing schedule, but it did not produce water.
The cost of the water shortage has shifted onto households, with residents spending more on tankers. Naa Adjeley, a trader and mother of three, told the media that she had not seen a drop in her house for nearly a month and was spending more than GH¢300 every week on tankers. The situation has become so dire that assemblies have resorted to drilling mechanised boreholes at schools and health facilities.
The Teshie-Nungua desalination plant was initially proposed by Befesa Ghana Limited on April 29, 2010, and Ghana Water's board approved the signing on August 25, 2010. The Ministry of Finance issued a Letter of Comfort on October 3, 2011, and the parties amended the deal and signed an addendum on February 20, 2012. The project has been dogged by controversy, with some members of the committee noting that the parent company, Abengoa Water S.L.U of Spain, was not a party to the agreement.
Key points
- The Ghana Water Company Limited has been ordered to pay $235 million to the Spanish owners of the Teshie-Nungua desalination plant.
- The plant was shut in October 2025 over unresolved contractual obligations and what Ghana Water called a culture of missing maintenance.
- The Republic of Ghana is liable for the money under a sovereign guarantee approved by Parliament in 2012.
