Israel transfers control of West Bank power grid to Palestinian Authority
In an effort to get the PA to pay a NIS2 billion debt, the Israel Electric Corporation will be transferring control over the Palestinian electric grid to the PA; US taxpayer to help foot the bill to the tune of NIS100 million ($25.4 million).
The agreement was signed by the Head of the Coordination of Government Activities in the Territories (COGAT) General Yoav "Poli" Mordechai in the presence of Minister of Finance Moshe Kahlon, Finance Ministry Director General Shai Babed, and the PA Minister of Civil Affairs Hussain al-Sheikh.
The finance minister updated both Prime Minister Benjamin Netanyahu and Defense Minister Avigdor Lieberman on the issue, and didn't request a cabinet meeting.
Additionally, a sum of approximately NIS1.14 billion in frozen funds was transferred to the PA. The finance ministry said that the money had been frozen for 10 years, and was given back on the Palestinian promise that the money will only be used on Palestinian welfare and health services.
Over the last several years, the Palestinian debt to the Israel Electric Corporation has ballooned to NIS 2 Billion. The giant debt has become a huge burden to the Electric Corporation, and has kept the Corporation from providing more electricity to the Palestinians, thus choking their economy and their ability to develop economically.
'A stable Palestinian economy is in Israel's interest'
A high ranking finance ministry official said "this is a historic agreement. Minister Kahlon took the decision to deal with the issue, and we worked in a very comprehensive manner (to solve the debt problem). It's a new trade agreement and will change the status quo; Israel will get out of a situation whereby the Electric Corporation is forced to sell electricity in a decentralized manner to various companies or villages."
"There will be a physical, engineered separation between the electric corporation (and the Palestinian electrical grid)," he continued, "and the Palestinians will take on the responsibility of managing their electrical grid."
"This is a lot more wide ranging that just closing a financial gap – the electricity will be Israeli, but the transmission system will be Palestinian. It opens up the possibility of the establishment of a power station in the Palestinian Authority, and there are already rumors that a power station might be established in Jenin. On top of this, the Americans have agreed to pay NIS100 million ($26.4 million) of the Palestinians' electricity debt," he added.
Minster Kahlon said that "the agreements we arrived at instill confidence in the electric corporation and to the citizens of Israel that the PA's debts will be repaid. The agreement will cover and mitigate future conflicts. This is the first step in a long process, and the two sides will require dedication and determination to complete the outline of the blueprint."
"The agreement will ensure a constant energy supply and economic development in the PA. A stable PA economy is in Israel's interests economically, politically, and in terms of security. Anyone who believes that you can achieve a breakthrough between the two sides without direct negotiations and without preconditions is working against the interests of the nation. If we don’t work to fix this historic problem between us and the Palestinians, we will have a crisis which we will have to pass on to our children, and it will be much more difficult to solve."
Meanwhile, PA Minister of Civil Affairs Hussain al-Sheikh said "by turning over the responsibility (for the electrical grid) will enable complete (Palestinian) control over the needs of the Palestinians (living in the West Bank). The agreement will enable the Israel Electric Corporation to send electricity to the PA via a central point of contact."