An International Chamber of Commerce arbitration tribunal has ordered Ghana Water Company Limited to pay $235 million to Befesa Desalination Developments Ghana Limited. The dispute arose from the termination of a water purchase agreement between the two parties. In October 2025, Ghana Water Company Limited shut down the Teshie desalination plant without reaching an agreement with Befesa over unresolved contractual issues and concerns over maintenance.
The Teshie desalination plant was commissioned in 2015 under a 25-year build-own-operate-transfer arrangement. It was designed to produce 60,000 cubic metres of water daily to serve up to 500,000 people in the Teshie-Nungua catchment. However, more than 500,000 residents in Teshie, Nungua, Spintex, Sakumono and La continue to face rationed water supply. Many residents have had to rely heavily on water tankers, boreholes and sachet water.
The financial dispute is linked to the cost of water supplied by the plant. Ghana Water had reportedly been purchasing desalinated water at GH¢6.75 per cubic metre, while the approved tariff allowed it to sell the water at GH¢1.47 per cubic metre. This resulted in a loss of GH¢5.28 on every cubic metre sold. The plant's operator, Befesa Desalination Developments Ghana Limited, is a Spanish-owned company.
The arbitration tribunal proceedings lasted about a year. The two final decisions were issued by the ICC on September 17. Interest on the award will run from April 1, 2026. The amount, net of taxes, relates to payments arising from the termination of the agreement under which Ghana Water purchased treated seawater from the plant.
Ghana Water Company Limited raised counterclaims, including a $144.5 million claim. However, the ICC rejected the claims and ordered the utility company to cover part of Befesa's legal costs. The latest award adds to Ghana's exposure to international arbitration claims and puts further financial pressure on the state.
In February 2026, President John Mahama directed the Finance Minister, the Attorney-General and Ghana Water to negotiate with the plant's shareholders to resolve the dispute and facilitate the resumption of operations. Ghana Water Limited Managing Director Adam Mutawakilu subsequently said the utility was working to reach a settlement that would allow the plant to resume supplying water to affected communities.
The impact of the plant shutdown has been significant. Residents have had to rely on alternative sources of water, and the rationed water supply has affected daily life. The shutdown has also highlighted the need for the government to resolve disputes involving major infrastructure and investment projects.
Key points
- The ICC has ordered Ghana Water Company Limited to pay $235 million to Befesa Desalination Developments Ghana Limited.
- The dispute arose from the termination of a water purchase agreement between the two parties.
- The shutdown of the Teshie desalination plant has resulted in rationed water supply for over 500,000 residents.
