Ghana Eyes US235m Arbitration Payout

Ghana’s government is prepared to shoulder the full cost of a proposed US235 million international arbitration award, the country’s utilities regulator has disclosed.

Dr. Shafic Suleman, Executive Secretary of the Public Utilities Regulatory Commission (PURC), said on Tuesday that negotiations with Befesa Desalination Developments Ghana Limited had progressed to the point where the company indicated it would accept roughly US$80 million to settle the long-running contractual dispute and allow the plant to restart .

The development follows a September 17, 2026 ruling by an International Chamber of Commerce (ICC) tribunal ordering Ghana Water Limited (GWL) to pay US$235 million, net of taxes, to Befesa for terminating a water purchase agreement. Interest on the award has been accruing since April 1, 2026 .

Finance Ministry Steps In

Initially, GWL was expected to contribute about US$10 million toward the settlement. But Finance Minister Dr. Cassiel Ato Forson subsequently indicated that the government would assume the entire financial burden, Suleman said on the Citi Breakfast Show .

“They said Ghana Water should raise about US$10 million. We have tried our best, but the Finance Minister has indicated that government will take up the entire cost,” he said. “We are hoping that, by the grace of God, the Finance Minister can at least make some commitment to the company by the end of the year so they can commence operations” .

Suleman confirmed the facility is capable of operating and would be handed over entirely to GWL for management once outstanding issues are resolved. He nonetheless raised concerns about GWL’s long-term capacity to manage the plant effectively, while expressing confidence in its workforce’s technical expertise .

A Plant Built to Serve Half a Million, Idle for a Year

The Teshie-Nungua desalination plant, commissioned in 2015 at a cost of approximately US$126 million, was designed to produce 60,000 cubic metres of water daily for about 500,000 residents in Teshie, Nungua, Spintex, Baatsona, Sakumono and La . It has remained idle since October 2025, when GWL shut it down amid unresolved maintenance and contractual disputes, forcing residents onto water tankers and boreholes .

The financial structure of the project proved untenable from the outset. GWL was contractually obligated to pay a monthly capacity charge of about US57.38 million between 2020 and 2024 .

The Arbitration Fallout

The ICC proceedings, initiated in October 2024 by Befesa and Standard Bank of South Africa, stemmed from the termination of the Water Purchase Agreement . The tribunal found that Befesa had validly terminated the agreement and that GWL was liable for contractual termination payments. It dismissed Befesa’s separate US$402 million claim for unpaid water charges in its entirety, ruling the two claims could not be recovered cumulatively .

A parallel arbitration against the Republic of Ghana under a state guarantee largely followed the ruling against GWL, holding the state liable for the utility’s obligations .

Befesa is 95 per cent owned by Spanish infrastructure group Cox, which announced the awards to the Spanish securities market on September 21 .

Negotiations Predate the Award

The government had been negotiating to acquire the plant even before the tribunal issued its final rulings. In a statement issued after the award, the Office of the Attorney-General said significant progress had been made toward purchasing the facility at a price lower than the awarded amount, which would allow the state to assume full ownership and avoid additional costs beyond maintaining water supply .

The proposed US235 million award and a fraction of the plant’s original construction cost—though it remains nearly double what the government says the facility is worth in its current state. For the communities that have endured rationing for over a year, the more pressing question is whether the Finance Ministry will commit the funds before the year’s end, allowing the taps to flow again.