Ghana Water Limited has been ordered to pay US$235 million to the Spanish-owned company behind the idle Teshie desalination plant, and the Republic of Ghana is liable for the money under a state guarantee it signed for the project. The Spanish group Cox announced the outcome on Monday, saying two final awards from the International Chamber of Commerce's arbitration court were issued on 17 September and served on its Ghanaian project company the following day.
The $235 million, net of taxes, covers payments arising from the termination of the water purchase agreement under which the utility bought treated seawater from the plant, the company said, with interest running from 1 April 2026 until the money is paid. Cox said the tribunals substantially rejected the counterclaims brought against its subsidiary, Befesa Desalination Developments Ghana Limited, including a claim for US$144.5 million.
The awards also found that the Republic of Ghana must answer for the sums under the state guarantee attached to the project, although the company cannot recover the same money twice. The plant at the centre of the case has produced nothing since October last year, when Ghana Water shut it down over what it described as unresolved contractual issues and a prolonged lack of the maintenance needed to keep it running safely.
Teshie, Nungua, Spintex, parts of Sakumono and La have been rationed ever since, with households buying from tankers, assemblies sinking boreholes and National Security trucking water to Tsuibleoo after a TV3 campaign. In February, President John Mahama directed the Finance Minister, the Attorney-General and Ghana Water to open negotiations with the plant's shareholders.
The arithmetic that soured the deal has been public for years. Ghana Water was buying the desalinated water at GH¢6.75 a unit while the Public Utilities Regulatory Commission's approved tariff let it sell at GH¢1.47, a loss of GH¢5.28 on every unit. The utility first pulled the plug on New Year's Day 2018, when it said it would renegotiate the terms.
The US$126 million plant was commissioned by Mahama in 2015 during his first term, built to produce 60,000 cubic metres of water a day for up to 500,000 residents of the Teshie-Nungua catchment on a 25-year build-own-operate-transfer contract. The World Bank's Multilateral Investment Guarantee Agency, which issued US$179.2 million in cover for the project in 2012, lists the project company as a joint venture of Abengoa Water Investments Ghana, Daye Water Investment and the local partner Hydrocol.
Cox, chaired by Enrique Riquelme, took over the assets of the collapsed Spanish engineering group Abengoa in 2023 and now holds 95 per cent of the Ghanaian company. The award adds to a run of costly international claims against the state, including a US$320 million loss to Tullow Oil in a tax assessment dispute in January 2025.
Key points
- Ghana Water Limited has been ordered to pay $235 million to the Spanish-owned company behind the idle Teshie desalination plant.
- The Republic of Ghana is liable for the money under a state guarantee it signed for the project.
- The plant has been idle since October last year, resulting in water rationing in several areas.
