PA PM lays foundational stone for first power plant in West Bank

Muhammed Mustafa, the chairman of the PIF, said the high cost of importing electricity from Israel is the primary reason for building the plant.

By
November 24, 2016 21:58
3 minute read.
Rami Hamdallah

Palestinian Authority Prime Minister Rami Hamdallah. (photo credit: REUTERS)

In a dirt field near the Jenin Industrial Zone, which straddles the northern border between the West Bank and Israel, top Palestinian Authority officials and businesspersons gathered to lay the cornerstone for the West Bank’s first power plant.

“The Jenin power generation plant is one of the most important, pioneering, and strategic projects in our land,” PA Prime Minister Rami Hamdallah said of the PA’s largest infrastructure project in a speech on Thursday.

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The Palestine Investment Fund (PIF), the PA’s sovereign wealth fund, and major Palestinian businesses such as Padico, Bank of Palestine, and others have teamed up to build the plant, which will cost an estimated $600 million.

The project is expected to create thousands of direct and indirect jobs and produce 450 megawatts per hour, providing 50% of Palestinians living in the West Bank with electricity.

Muhammad Mustafa, the chairman of the PIF, said the high cost of importing electricity from Israel is the primary reason for building the plant.

“Imported electricity costs the government approximately $750 million annually,” Mustafa said in a speech. “Thus, we have worked to provide a suitable amount of energy to Palestinian citizens and companies through a number of programs, most importantly the Jenin power plant.”

The Prime Minister’s Office approved the project in April.

The PA currently imports most of its electricity from Israel Electric and experts estimate the new plant will save the PA some $140 million.

The PIF and its private sector partners are currently reviewing the bids of six international companies to build the plant and plan to announce the winning bid in January. Construction of the plant will take some 30 months.

Both Hamdallah and Mustafa said that the plant will run on natural gas from the Gaza Marine offshore gas field, which reportedly contains 3 trillion cubic feet of natural gas. However, Shell recently acquired British Petrroleum, the company developing the Gaza gas field, and still has not informed the PIF and its partners of it plans.

A Palestinian economic expert told The Jerusalem Post that Shell wants to receive guarantees that they can profit from developing the field.

“Shell wants to be certain that the investment they make will pay off and then they will have the incentive to develop the project,” the expert said. “If Shell is confident that both the Jenin and the expected Hebron power plants will be built, I think it will move forward in developing the gas field.”

The PIF hopes to lead the construction of a similar power plant in the Hebron area in the coming years.

The expert also stated that, despite Hamas’s control over Gaza, the PA will still be able to import gas from Gaza.

“The gas fields are 36 kilometers from the shore, where the Israel Navy is in control,” the expert said. “According to agreements, Israel is supposed to allow for the gas to be connected to its pipelines and transported to our power plants.”

A PIF official told the Post that the plan is to import natural gas from the Gaza field, but admitted that it and its partners may have to explore alternatives in the near term.

Israel likely could provide the Jenin plant with natural gas, as it plans to develop its own natural gas fields.

Before entering his car, Hamdallah, surrounded by guards, told reporters he is very proud of the plant.

“If God wills, this plant will be one of the bricks in establishing the State of Palestine. We must be optimistic; this occupation is on its way out.”


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