The Office of the Attorney-General of Ghana has issued a statement regarding the US$235 million arbitration award against Ghana Water Company Limited (GWCL) over the Teshie Desalination Plant. The award was made by an International Chamber of Commerce (ICC) tribunal in ICC Case No. 29029/CPB. The tribunal found that Befesa Desalination Developments Ghana Ltd had validly terminated its Water Purchase Agreement (WPA) with Ghana Water and was entitled to contractual termination payments.
According to the Attorney-General's statement, the tribunal rejected a separate US$402 million claim for alleged unpaid water charges. The claim was brought by Befesa and Standard Bank of South Africa Limited against Ghana Water on October 23, 2024. The tribunal ruled that the claim for unpaid charges could not be recovered alongside the termination payments. The Attorney-General noted that the tribunal awarded the claimants US$235 million, net of taxes, in termination payments, including pre-award interest calculated to March 31, 2026.
The Attorney-General's statement also mentioned that further interest on the debt component will accrue from April 1, 2026. The award represents 58.4% of the monetary claim, using the US$402 million claim as the benchmark. The tribunal consequently ordered reimbursement of 58.4% of the claimants' reasonable defence and representation costs. A parallel arbitration, ICC Case No. 29030/CPB, was brought by Befesa against the Republic of Ghana under the state guarantee.
The Attorney-General stated that the tribunal's award in the parallel arbitration substantially followed the decision against Ghana Water and principally held the state liable for the utility's obligations. The awards arise from the termination of the water purchase agreement for the Teshie desalination plant, which supplies water to parts of eastern Accra. The plant's operations have been impacted by the dispute.
In response to the award, the government has begun negotiations with Befesa to purchase the Teshie desalination plant. The Attorney-General's statement noted that significant progress has been made in the negotiations, which started before the final award was issued. The proposed acquisition would give the state full ownership of the plant and help restore its operations.
The government hopes to conclude negotiations "within the shortest possible time" to ensure the facility returns to full operation. The Teshie desalination plant is an important source of water for Accra, and its operation is critical to meeting the city's water needs. The Attorney-General's statement did not provide a timeline for the completion of the negotiations.
The dispute over the Teshie desalination plant highlights the complexities of international arbitration and the importance of carefully negotiated contracts. The Attorney-General's response to the award has provided clarity on the government's position and its efforts to resolve the dispute. The outcome of the negotiations with Befesa will be closely watched by stakeholders in Ghana's water sector.
Key points
- The Attorney-General's statement noted that the tribunal rejected a $402m claim for alleged unpaid water charges.
- The government has begun negotiations with Befesa to purchase the Teshie desalination plant.
- The proposed acquisition would give the state full ownership of the plant and help restore its operations.
