The Government of Ghana is currently negotiating with Befesa Desalination Developments Ghana Ltd to purchase the Teshie Desalination Plant in Accra. According to a statement issued by the Office of the Attorney-General and Minister of Justice, the negotiations began before the arbitral proceedings concluded and before the final award was rendered. The purchase would ensure that the state fully owns the plant and does not incur additional costs beyond what is necessary to guarantee continued water supply to about one million residents in the eastern part of Accra.
The negotiations are aimed at avoiding payment of the US$235 million awarded to Befesa and Standard Bank of South Africa Limited by an International Chamber of Commerce (ICC) arbitral tribunal. The arbitration was brought by Befesa and Standard Bank against Ghana Water Company Limited (Ghana Water) on October 23, 2024, arising from the Water Purchase Agreement between the parties. The agreement was terminated by Befesa due to Ghana Water's failure to pay for water produced and supplied to Teshie and surrounding areas.
The arbitral tribunal rendered its Final Award in ICC Case No. 29029/CPB, which addressed claims arising from the termination of the Water Purchase Agreement and issues concerning the condition, maintenance, and handover of the desalination plant. The tribunal found that Befesa had validly terminated the agreement and that Ghana Water was liable to make contractual Termination Payments. The tribunal awarded US$235 million to Befesa and Standard Bank as Termination Payment, net of taxes.
The Government's negotiations with Befesa aim to purchase the plant at a price lower than the amount sought in arbitration. Significant progress has been made in the negotiations, and the Government hopes to conclude the talks within the shortest possible time so that the plant can return to full operation. The purchase will enable the state to fully own the plant and ensure continued water supply to the residents.
The arbitral tribunal also rendered a final award in a parallel arbitration, ICC Case No. 29030/CPB, brought by Befesa against Ghana under the State Guarantee. The award substantially followed and referred to the award in ICC Case No. 29029/CPB and principally held Ghana liable for Ghana Water's liabilities. The tribunal recorded that the US$235 million awarded represented 58.4 per cent of the monetary claim.
The Government's decision to negotiate the purchase of the plant is aimed at minimizing costs and ensuring continued water supply to the residents. The negotiations are ongoing, and the Government is working to conclude the talks as soon as possible. The Teshie Desalination Plant is a critical infrastructure for the residents of Accra, and its full operation is essential for meeting their water needs.
The outcome of the negotiations will determine the future ownership and operation of the Teshie Desalination Plant. The Government's efforts to purchase the plant at a lower price are aimed at reducing the financial burden on the state. The plant's full operation will have a positive impact on the lives of the residents, who rely on it for their water supply.
Key points
- Government negotiates purchase of Teshie Desalination Plant at lower price after arbitration.
- Purchase aims to ensure state ownership and continued water supply to one million residents.
- Negotiations ongoing to conclude talks within shortest possible time.
