Qatar signs financial deal to ensure natural gas supply to Gaza power plant

Weeks after pledging cash to build pipeline connecting Israeli gas facilities with Strip’s only electrical plant, Doha agrees to set up escrow account with electricity company

A general view of the only electrical plant that generates electricity in the central Gaza Strip, June 27, 2019. (AP Photo/Hatem Moussa)
A general view of the only electrical plant that generates electricity in the central Gaza Strip, June 27, 2019. (AP Photo/Hatem Moussa)

Qatar’s Foreign Ministry said Friday it had signed an agreement with Gaza’s electric company that will establish an escrow account for the costs of supplying gas and generating electricity at the Strip’s sole power plant.

The statement said that Qatar will be the owner of the account and will organize and manage payments through it. The Gaza Electricity Distribution Company will deposit $5 million per month when the planned gas-powered plant starts operating, the statement said.

Doha did not say how many years the Gulf nation was committing to the plan.

Qatar, the Palestinian Authority and Gaza’s electrical company signed a deal last month advancing a long-term project to supply Gaza’s only power plant with Israeli natural gas.

Qatar’s envoy to the Gaza Strip, Mohammad al-Emadi, said at the time that Doha had signed a memorandum containing a pledge to invest $60 million in laying the pipeline for the proposed project.

But a final deal on the initiative, which has been in the works for years, has yet to be reached and could still be months or years away.

Palestinian children at home reading books by candlelight due to electricity shortages in Gaza City, June 13, 2017. (AFP/Thomas Coex)

The so-called “Gas for Gaza” initiative is a complex diplomatic dance, involving Israel, Hamas, the PA, Qatar, Egypt and the European Union, among other players. The project seeks to replace the diesel fuel that currently powers Gaza’s electrical plant with Israeli gas.

Gaza has suffered from a chronic electricity deficit for more than a decade. The coastal enclave has only one power plant — which runs on imported diesel fuel — and experiences daily blackouts of between eight and 12 hours.

With Israel’s approval, Qatar since 2018 has periodically provided millions of dollars in cash to Gaza’s Hamas terrorist rulers to pay for fuel for the Strip’s power plant, fund infrastructure projects and provide aid to tens of thousands of Gazan families.

The Qatari envoy to the Gaza Strip, Mohammed al-Emadi, speaks during an interview in his office with AFP in Gaza City on August 24, 2019. (Mahmud Hams/AFP)

Transitioning Gaza from diesel fuel to natural gas is widely viewed as an important solution to the enclave’s electricity crisis. Talks on a natural gas pipeline have been in the works for years, without a clear timeline for success.

Under the proposal, natural gas would flow from Israel’s Leviathan gas field, which lies off Gaza’s coast, to southern Israel. The EU and Qatar would then fund extensions to the pipeline to Gaza’s power plant.

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