Israel and PA settle massive Palestinian electric bill

Over the past decade, the Palestinians ran up huge debts amounting to $530 million to the Israel Electric Company. Now, Israel has resolved the issue and the Palestinian Authority will begin repaying its debt as well as implement a better system to ensure full control over its power grid. 

Israel and the Palestinian Authority (PA) on Tuesday signed an agreement that will settle the Palestinians’ multi-billion Shekel debt to Israel’s Electrical Company (IEC), settling a decade-long dispute on the matter.

Israel’s Minister of Finance Moshe Kahlon signed for Israel, and the agreement was reached through the office of the Coordination of Government Activities in the Territories (COGAT), the IDF unit responsible for implementing government policy in Judea and Samaria and vis-à-vis the Gaza Strip. The Palestinian Minister for Civil Affairs Hussein A-Sheikh signed for the PA.

The agreement stipulates that the PA will pay an initial NIS 500 million of the two billion Shekel ($530 million) debt, and in return will receive control over the power lines running through the PA.

Another billion Shekels will be paid by the PA in installments spanning an extended period of time, but the remaining 500 million shekels will be permanently erased from the PA’s debt

Read  Israel increases flow of humanitarian aid into Gaza

The IEC provides around 88 percent of total electricity consumption to the PA.

“The agreement will also assist in reforming and developing the PA’s electric and energy sector,” COGAT stated.

This agreement is the third to be signed this year between Israel and the PA, a result of “direct, bi-lateral discussions,” COGAT emphasized.

Over the past decade, the PA did not pay its electric bills, resulting in the IEC intermittently curbing the power flow or completely cutting the power to Palestinian cities. Furthermore, the PA had no organized system to manage its power grid.

The new agreement settles these issues, and gives the PA full responsibility over its power consumption.

In April, Israel gave its initial approval to a Palestinian request to build a power plant in the Jenin area in Samaria. The gas power plant, which will take four years to build, will produce 450 megawatts of electricity. The construction is expected to cost $620 million, with the station expected to start running by the end of 2019.

The agreement also shifts full responsibility for the collection of electricity bills onto the PA, which in the past had rejected responsibility, claiming it fell under the jurisdiction of local electricity distribution companies. Under the new agreement, the PA will provide electricity to local Palestinian electricity companies after purchasing it from Israel, becoming the sole authority for electricity distribution in the PA.

COGAT commander Yoav Mordechai lauded the agreement, which was arrived at after “prolonged and complex” negotiations which led to “a substantial and valuable agreement” which settles the massive debt.

By: Aryeh Savir, World Israel News