What was celebrated as West Africa’s first desalination plant, intended to supply clean drinking water to approximately 500,000 people in Teshie, Nungua, Spintex and surrounding communities, has now resulted in a US$235 million arbitration award against Ghana Water, with the Republic of Ghana also liable under a state guarantee.
As an accountant and a resident of one of the affected communities where the plant is located, I have considerable interest.
Let me take you through how we got here.
2011: Ghana Water Company Limited signed an agreement with Spanish engineering company Abengoa to construct and operate a seawater desalination plant at Nungua for 25 years. The initial investment was estimated at US$115 million. The objective was to address the persistent shortage of potable water in the eastern corridor of Accra.
2012–2015: Construction began in 2012, and the plant was officially inaugurated on 17 April 2015. The completed project cost approximately US$126 million and was designed to produce 60,000 cubic metres of water daily. Under the Build, Own, Operate and Transfer arrangement, the private operator would sell treated water to Ghana Water over 25 years before transferring the facility. Projected revenue over the concession period was approximately US$1.3 billion.
2018: Barely three years after its inauguration, Ghana Water shut down the plant, citing unresolved challenges with its management. There were concerns about the financial sustainability of the arrangement, while residents had raised complaints about water quality. Ghana Water announced alternative supplies for affected communities.
2024: The financial and operational difficulties were far from resolved. According to the Ministry of Finance’s 2024 Annual Report on Public-Private Partnership Projects, Ghana Water and the government had accumulated outstanding invoices of approximately US$9.77 million by December 2024.
The report also disclosed that the government had provided approximately US$57.38 million in financial support to the project between 2020 and 2024. It identified delayed payments, power interruptions and maintenance problems as continuing challenges.
In October 2024, Befesa Desalination Developments Ghana and Standard Bank of South Africa initiated arbitration proceedings against Ghana Water and the Republic of Ghana, claiming approximately US$356 million over alleged contractual breaches and the associated state guarantee.
October 2025: Ghana Water shut down the plant again, citing unresolved contractual matters and the prolonged absence of critical maintenance. It promised alternative supply arrangements, including rerouting water and deploying tankers.
For those of us living in the affected areas, this is personal. Some communities have experienced prolonged periods without water. Households have been forced to depend on private water suppliers, often at additional expense.
February 2026: Ghana Water announced that President John Mahama had directed the Finance Minister, the Attorney-General and Ghana Water to engage the plant’s shareholders to resolve the dispute and restore operations.
August 2026: SIGA published its 2025 State Ownership Report, indicating that Ghana Water had recorded a profit of GH¢635.23 million, reversing a GH¢3.06 billion loss in 2024.
However, a closer look at the figures shows that the turnaround was largely driven by a GH¢2.05 billion foreign-exchange gain. Operating revenue increased by only 2.76%.
17 September 2026: An International Chamber of Commerce arbitration tribunal issued its awards. Ghana Water was ordered to pay Befesa US$235 million, net of taxes, with interest accruing from 1 April 2026 until payment, as well as part of Befesa’s legal costs.
Ghana was also found liable under the state guarantee, although the same amount cannot be recovered twice. The awards are final and binding, subject to applicable legal challenge mechanisms.
The arbitration did not start in September 2026. Ghana Water had been facing a substantial claim since October 2024. Yet, we are celebrating a GH¢635 million profit for 2025.
I am curious to know how the dispute was treated in Ghana Water’s audited financial statements for 2024 and 2025. What provisions were recognised? What contingent liabilities were disclosed? What assessments did management, the board and the external auditors make regarding the likelihood and potential financial impact of an adverse arbitration award?
We have a facility built to serve approximately half a million people. Significant public funds have supported the project. There is now a substantial arbitration award, while the residents for whom the plant was constructed continue to experience water shortages.
Ghana Water and the relevant state institutions owe the public a clear account of the contractual obligations, the treatment of the arbitration exposure in their financial statements, the options for settling the dispute and, above all, a credible timetable for restoring reliable water supply.
I don’t know why we always find ourselves in this situation as a country? Deliberate or what????
Author: Dickson Assan, CA
Chartered Accountant| SME Business Advisor | Career Coach
