Gas & Oil Fired, Middle East & Africa, Smart Grid

Palestine secures electricity distribution from Israel in $775m deal

Pylons and overhead power lines

Palestine and Israel have signed up to a 15-year, $775m deal with the self-ruling Palestinian Authority to put electricity distribution for Palestinians in the West Bank under the control of the Palestinian government. The move also entails the building of four power plants.

Three million Palestinians in the area have relied on Israel for electricity until now, according to Reuters. The deal does not apply to the Gaza Strip, whose two million Palestinians suffer frequent blackouts due to severe fuel shortages and continued power-sharing disputes between Gaza’s Islamist Hamas rulers and the West Bank-based PA.
Pylons and overhead power lines
As part of the new deal, the PA will pay off a $775m debt to the state-owned utility Israel Electric Corp, while taking charge of the distribution of electricity to West Bank Palestinians.

The IEC will sell power to the Palestinian Electricity Transmission Company (PETL) through four plants to be built by the IEC and PA. PETL will own the power plants and channel the electricity supply.

“The agreement … frees the Palestinian electricity sector of complete Israeli control, which has lasted for decades,” said a statement issued in the name of Hussein Al-Sheikh, head of the PA’s civil affairs agency.

Israeli Energy Minister Yuval Steinitz said the agreement paves the way for Palestinians to develop a modern grid.

“(The deal) brings about a new reality in the Palestinians’ energy sector, reduces restrictions on electricity supply, strengthens economic stability…and opens a new era in economic relations between the two sides,” said Israeli Finance Ministry Director-General Shai Babad.

Palestinians in Gaza, an impoverished coastal enclave largely blockaded by Israel, suffer up to 18 hours of power cuts per day due to fuel shortages. The electricity Gaza gets from Israel, Egypt and a local power plant remains under half the estimated 600 megawatts that would satisfy daily needs.