Photo Credit: Yossi Zamir / Flash 90
Israel Electric Corporation (IEC) power plant.

The Palestinian Authority has settled its electricity debt of nearly NIS 1 billion with the Israel Electric Company.

The Israeli company has been unable to collect debt payment from residents of the Palestinian Authority because all connection was through the Ramallah government.


Now the PA government has provided bank guarantees for future debts, according to Globes, in a 15-year agreement worth an estimated NIS 2.8 billion per year.

The agreement also settles the long-standing PA debt to the IEC, with Ramallah commencing payment of the NIS 915 million debt still owed – NIS 500 million was written off, and NIS 600 million was paid in October 2016 – for consumption of electricity prior to September 2016, to IEC Jerusalem District Ltd.

The payment is to be made in 48 equal installments after the final signing of the agreement.

The Israel Electric Company will sell electricity and related services to the Palestinian Authority’s energy firm, PETL, to be supplied through four high-tension substations (built by IEC for PETL) and through high and low-tension connection points for PETL distribution and supply in PA territory.

“Signing the commercial agreement is a historic step completing the agreement signed by the governments in September 2016,” Finance Minister Moshe Kahlon said in a statement.

“Strengthening economic cooperation between Israel and the PA is above all an Israeli security interest. The agreement will ensure future payments to the IEC and reinforce its financial position. I congratulate the negotiating teams for the completion of their task.”

IEC chairperson Yiftah Ron Tal added, “This is a historic event. In this agreement, IEC is correcting for the first time a historical distortion of accumulated debt without guarantees, ability to collect it, or control over the amount of debt.

“This anchor agreement not only constitutes an unprecedented financial achievement; it also constitutes an important milestone in regulating electricity commercial relations between the Israeli and Palestinian electric companies.”

Energy and Infrastructure Minister Yuval Steinitz called the settlement a “breakthrough, both in the measures for payment of the Palestinian debt to IEC and Israel, and in arranging future relations to prevent more debts from emerging in the future. With the signing of the agreement, we will be able to make progress with the Palestinians in developing a modern electrical grid according to the model of the sub-station we inaugurated in Jenin.”

The agreement must be approved by the IEC board of directors, the Public Utilities Authority and the IDF Chief Electrical Staff Officer before it takes effect.


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Hana Levi Julian is a Middle East news analyst with a degree in Mass Communication and Journalism from Southern Connecticut State University. A past columnist with The Jewish Press and senior editor at Arutz 7, Ms. Julian has written for, and other media outlets, in addition to her years working in broadcast journalism.