Ghana: Water plant shutdown leaves state facing $235 million liability

The amount, calculated net of taxes, corresponds to the compensation owed following the termination of the water purchase agreement. Interest has been accruing since April 1 until the actual payment is made. The arbitrators also dismissed most of Ghana Water’s counterclaims, including a demand for $144.5 million, and imposed part of the legal costs on the company.

The total far exceeds the initial cost of the infrastructure. Commissioned in April 2015 for approximately $125 million, the plant was designed to produce 60,000 cubic meters of potable water per day and serve up to 500,000 people in Teshie, Nungua, Spintex, Baatsona, Sakumono, and parts of La. Ghana Water shut it down in October 2025 due to contractual disputes and maintenance issues.

Since the closure, water supply has remained rationed in several neighborhoods in eastern Accra. Households have turned to water trucks and boreholes. A trader and mother of three explained to JoyNews that she spends over 300 cedis per week on water, while schools and health centers have received mechanized boreholes.

The 2024 report from the Ghanaian Ministry of Finance highlights the contract imbalance prior to the shutdown. The plant had averaged 43,009 cubic meters per day, compared to the planned 60,000. Of the $16.93 million billed that year, $14.94 million was attributed to capacity charges. Public support provided between 2020 and 2024 had already reached $57.38 million.

President John Mahama tasked the Ministry of Finance, the Attorney-General, and Ghana Water in February to negotiate with shareholders to bring the plant back online. Cox Infrastructure Group, which holds 95% of the project company, states that discussions aimed at an amicable settlement are ongoing. The awards remain final and binding, subject to limited appeals provided for at the arbitration venues.