Ghana Water ordered to pay $235m over idle Teshie desalination plant to Spanish owners

Two ICC awards order Ghana Water to pay Spanish group Cox US$235m over the terminated Teshie desalination contract, with the Republic liable under a state guarantee. The US$126m Teshie desalination plant, commissioned in 2015 and shut down in October 2025. 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, and ordered the utility to reimburse part of the company's legal costs. 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. "We are pushing hard to resolve this once and for all, so the plant can resume operations and supply water to Teshie, Nungua, Sakumono, Spintex, La Dadekotokpon, and surrounding areas," the utility's Managing Director, Adam Mutawakilu, said at the time, adding that a first round had been held and a second set for 19 February. 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, Graphic Online reported in January. The utility first pulled the plug on New Year's Day 2018, when it said it would renegotiate the terms and its then head of communications, Stanley Martey, said running the plant had become very expensive and was draining the company's limited resources. 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. Cox cautioned investors that the awarded sums are gross amounts recognised inside the project's financing structure and do not translate directly into cash for the group, and that the final impact will depend on what is actually collected, on the rights of third parties and on the accounting treatment. It described the awards as final and binding, subject to the challenge routes available under the applicable law. The award adds to a run of costly international claims against the state. Ghana lost US$320 million to Tullow Oil in a tax assessment dispute in January 2025, and former Attorney-General Godfred Dame warned in 2024 that claims running as high as US$9 billion could collapse the economy without urgent reform of the country's arbitration laws. Ghana Water Limited is named in the awards under its former corporate title, Ghana Water Company Limited. Mostly here for media, tech, economic and social policy Ghanaian interest comes first in 2027 Budget - Finance Minister Dr. Ato Forson Cost of capital for Ghanaian businesses falling - Ato Forson New economy programme to target job-creating sectors - Ato Forson Fitch Solutions raises Ghana’s 2026 current account surplus forecast to 7.8% of GDP GRA receives GH¢400 million tax payment from B5 Plus to boost domestic revenue The day’s top stories, delivered to your inbox every morning. Source: 3News (https://3news.com/economy/ghana-water-ordered-to-pay-235m-teshie-desalination-arbitration)