Accra:Negotiations are underway between the government and Befesa to purchase the Teshie desalination plant for less than the $235 million awarded in an international arbitration dispute.
According to Ghana Web, the Office of the Attorney-General and Ministry of Justice announced that the government intends to finalize these negotiations soon and restore the plant to full operational capacity. The statement was released in the wake of the final decision in two related International Chamber of Commerce (ICC) arbitrations concerning the plant.
The first arbitration case involved Befesa Desalination Developments Ghana Ltd and Standard Bank of South Africa against Ghana Water Company Limited (GWCL), focusing on the Water Purchase Agreement. A second arbitration was brought by Befesa against the Republic of Ghana under a state guarantee. The tribunal determined Befesa had validly terminated the agreement, holding Ghana Water liable for contractual termination payments.
Initially, Befesa and Standard Bank sought around $402 million for alleged unpaid charges and $235 million related to the agreement's termination. However, the tribunal dismissed the $402 million claim and awarded $235 million as a termination payment, which includes pre-award interest up to March 31, 2026, with additional interest accruing from April 1, 2026.
The Attorney-General's Office highlighted that the tribunal's ruling significantly reduced the claimants' demands. The awarded amount, representing 58.4% of the initial $402 million claim, also reflected a proportional payment of legal and representation costs.
The government had already initiated negotiations with Befesa before the arbitration award and reported significant progress. The proposed purchase aims to allow the state to assume full ownership of the plant without additional costs, ensuring continued water supply to about one million residents in eastern Accra.
The government expressed its intention to conclude negotiations swiftly to facilitate the plant's return to full operation. The acquisition is part of broader efforts to maintain water supply to Teshie and surrounding communities, stemming from a longstanding dispute over the Water Purchase Agreement initiated by Befesa and Standard Bank in October 2024.