Israel gives Palestinians autonomy over electricity in debt pay-back plan

Under the terms of this agreement, the PA will give Israel a one-time payment of NIS 570 million and Israel will forgive NIS 500m. of its bill.

Electric poles (photo credit: REUTERS)
Electric poles
(photo credit: REUTERS)
The government on Tuesday gave the Palestinian Authority autonomy for the first time over the distribution of electricity within its territories.
The agreement signed between the two governments is to create a Palestinian electricity company, as well as provide for a payment plan for the Palestinians to erase their NIS 2 billion debt to Israel Electric.
“The agreement ensures a continuity of regular power supply and economic development in the Palestinian Authority,” said Israeli Finance Minister Moshe Kahlon (Kulanu).
He was part of a three-person Israeli team that met with Palestinian Minister of Civil Affairs Hussein al-Sheikh to sign the agreement. It comes in advance of a donor conference for Palestinians that is to take place in New York later this month on the sidelines of the opening of the UN General Assembly session.
It’s the second such agreement Sheikh has signed with Israel in the last 10 days. Earlier this month he and Coordinator of Government Activities in the Territories Maj.- Gen. Yoav Mordechai, signed an agreement that gave the PA autonomy over its postal service.
Mordechai, along with Finance Ministry director- general Shai Babad, was part of Tuesday’s signing team, who is to address the donor conference on the two agreements. In addition, he is to speak about an agreement signed earlier this year that introduced 3G telecommunications to the Palestinian territories.
“Direct, bilateral dialogue has proven itself again with this [electricity] agreement,” Mordechai said.
His office said that “the administration of the Palestinian electricity sector will be transferred over to the Palestinian Authority in commercial and operational aspects.
For this purpose, a body will be established to acquire electricity exclusively from the IEC and take full responsibility for the payment of electrical consumption by the Palestinian residents.”
Electricity has been a source of tension between Israelis and Palestinians in the last few years, with the IEC temporarily shutting down or slowing down service in order to push the PA into paying its outstanding bill.
Under the terms of this agreement, the PA will give Israel a one-time payment of NIS 570 million and Israel will forgive NIS 500m. of its bill.
The remainder will be paid out in 48 payments.
A mechanism will be created to ensure the Palestinians a steady supply of electricity.
Separately, Israel will also provide the PA with NIS 1.14b. in fees it had withheld for health and other benefits pending assurances from the Palestinians that the money would be used specifically for those services.
This agreement also provides Israel with those assurances.
Kahlon said: “This agreement will prevent a lot of disagreements and conflicts in the future.”
Sheikh remarked: “The transfer of responsibility to the Palestinian side allows full control for the electricity consumption of the Palestinian residents. This agreement will allow the Israel Electric Corporation to manage their engagement with the Palestinians through a unified destination contrary to the past.”
Sharon Udasin and Niv Elis contributed to this report.