Gov’t already in advanced talks to buy Teshie desalination plant to avert $235m payout

The Government of Ghana says it has made significant progress in negotiations to acquire the Teshie Desalination Plant from Befesa at a price “much lower” than the amounts sought during arbitration, as it seeks to avoid paying the US$235 million award against Ghana Water Limited.

The Office of the Attorney-General disclosed this in a statement issued on Wednesday, September 23, 2026, following the final award by an International Chamber of Commerce (ICC) tribunal in the long-running dispute over the plant’s Water Purchase Agreement.

According to the Attorney-General, negotiations with Befesa had begun before the tribunal issued its final award.

Despite the commencement of arbitral proceedings and before the final award, the Government of Ghana had entered into negotiations with Befesa to purchase the Teshie Desalination Plant at a price much lower than the amounts sought from the arbitration,” the statement said.

The government said the proposed acquisition would give the state full ownership of the facility while helping to avoid additional financial costs beyond those necessary to restore and maintain water supply to communities in eastern Accra.

“The award notwithstanding, significant progress has been made in the negotiations for the purchase of the plant to avoid the payment of the said $235 million,” the Attorney-General added.

Government says it is hoping to conclude the negotiations “within the shortest possible time” to allow the facility to return to full operation.

The proposed acquisition comes after an ICC tribunal ordered Ghana Water to pay approximately US$235 million, net of taxes, to Befesa Desalination Developments Ghana Ltd in termination payments arising from the Water Purchase Agreement.

The tribunal found that Befesa had validly terminated the agreement and was entitled to contractual termination payments. However, it rejected a separate claim for approximately US$402 million in alleged unpaid water charges, ruling that the two claims could not be recovered cumulatively.

The award also includes pre-award interest calculated up to March 31, 2026, while further interest on the debt component accrues from April 1, 2026 until payment.

A parallel arbitration brought under Ghana’s state guarantee also principally held the Republic of Ghana liable for Ghana Water’s obligations under the arrangement.

The Teshie Desalination Plant, which was designed to produce about 60,000 cubic metres of water daily, has been out of operation since October 2025 following unresolved contractual and maintenance issues.

Its shutdown has affected water supply to communities including Teshie, Nungua, Spintex, Sakumono and parts of La, with residents relying on alternative sources such as water tankers and boreholes.

The facility was commissioned in 2015 under a 25-year build-own-operate-transfer arrangement and was intended to help address persistent water shortages in the Teshie-Nungua area.

In February 2026, President John Dramani Mahama directed the Finance Minister, the Attorney-General and Ghana Water to engage the plant’s shareholders to find a resolution to the dispute and facilitate the resumption of operations.

The Attorney-General’s statement did not disclose the price being negotiated with Befesa, the detailed terms of the proposed acquisition or whether a final agreement has been reached.

The US$235 million arbitration award remains in force, while the government is pursuing the acquisition negotiations as a means of resolving the financial dispute and restoring the plant to service.

If successful, the proposed purchase would give the state full ownership of the facility and potentially allow it to resume its role in supplying water to communities in eastern Accra.

For now, however, the acquisition remains under negotiation, with the government yet to announce a final purchase price or completed agreement.