Israel, PA said to reach deal on massive Palestinian electricity bill
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Israel, PA said to reach deal on massive Palestinian electricity bill

Under reported agreement, Ramallah will hand over quarter of NIS 2b debt, take control of West Bank power lines

An Israel Electric Corporation employee working on an electric line. (Roni Schutzer/Flash90)
An Israel Electric Corporation employee working on an electric line. (Roni Schutzer/Flash90)

Israel and the Palestinian Authority have reportedly reached a deal to cover the Palestinians’ outstanding debt of almost NIS 2 billion ($530 million) to the Israel Electric Corporation.

Under the agreement, which is expected to be signed Tuesday, the PA will pay Israel NIS 500 million ($132 million), Channel 2 reported Monday.

It was not immediately clear if and when the PA would later pay off the remaining NIS 1.5 billion ($397 million) deficit.

The deal will also see the PA take responsibility for the power lines that supply electricity to Palestinian cities in the West Bank, the TV report said.

President of the Palestinian National Authority Mahmoud Abbas addresses the media at the European Union Commission headquarters in Brussels on June 22, 2016. (AFP PHOTO / THIERRY CHARLIER)
President of the Palestinian National Authority Mahmoud Abbas addresses the media at the European Union Commission headquarters in Brussels on June 22, 2016. (AFP PHOTO / THIERRY CHARLIER)

The IEC began to scale back the electricity flow to Palestinian cities in late May and early April due to the debt. Power supplies to Jericho and Bethlehem were limited, causing some blackouts, and the company threatened to do the same in other West Bank areas.

At the time, the state-owned electric company said Palestinian authorities in the West Bank had at that point racked up a debt of NIS 1.74 billion ($460 million). Israel has in the past forced the IEC to keep providing electricity out of concern for the Palestinian population, but the Electric Corp. said earlier this year it could no longer absorb the debt and would take measures to prevent it from growing further.

Officials also said they were not informed by the IEC of the planned cuts at the time. The IEC also cuts power to Israeli homes over unpaid debts.

Under an economic agreement signed with the PA in 1994, Israel collects around NIS 600-700 million ($159-$185 million) each month in customs duties, which are levied on goods destined for Palestinian markets that transit through Israeli ports.

It transfers the money after deducting approximately NIS 100 million ($26 million) for expenses such as Palestinian hospitalizations in Israel, sewage treatment and covering part of the electricity debt, which has remained largely stable in recent months.

In January 2015, the IEC cut power to Palestinian cities for a number of hours every day over a similar debt, only to permanently renew the electricity supply a few weeks later.

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