Deal Reached to Address Palestinian Debt to Israel Electric Company

The matter of the Palestinian Authority’s $530 million debt to the Israel Electric Corporation has been addressed with an agreement that includes erasing some $132.5 million of arrearages. The agreement, which is expected to be signed on Tuesday, provides an immediate payment of 500 million shekels and payments amounting to another one billion shekels ($265 million). The remainder of the debt will be forgiven. As has been previously reported by The Media Line, one ongoing obstacle to the Palestinians’ timely payments is the widespread theft of electricity by West Bank residents. The agreement addresses the problem by for the first time establishing a mechanism for collecting fees from the Palestinian customers. The issue of the electricity debt was significant and has impacted on the political situation when the Israeli provider would cut-off power to select areas for several hours at a time in order to prod the PA into paying its debt. At times money that was collected by Israel for the PA pursuant to terms of the Oslo Accords was withheld to offset the debt to the electric company. Israel and the Palestinians finally agreed to negotiate a solution at the urging of Norway which oversaw the talks which lasted a year.

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