WORLD BANK: ISRAELI RESTRICTIONS PREVENT THE DEVELOPMENT OF PALESTINIAN ENERGY SECTOR
West Bank, 19 Jumadil Akhir 1436/8 April 2015 (MINA) – The World Bank has stated that the accumulation of unpaid electricity bills owed to the Palestinians’ largest supplier, the Israel Electric Corporation (IEC), remains a major challenge, as it directly affects the financial situation in the Palestinian territories.
88 percent of the Palestinians’ electricity is provided by the Israel Electric Corporation, Middle East Monitor (MEMO) quoted by Mi’raj Islamic News Agency (MINA) as reporting.
In a report issued today, the World Bank said that the Palestinian energy market is small and the chances to expand and develop the national energy sources are very limited, at least for the time being, as the Israeli restrictions have prevented construction of power networks in large parts of the West Bank.
In addition to this, there is a lack of peace and stability which undermine and discourage private investment in the sector.
The report also addresses the factors that prevent the repayment of these bills. The main factors include the absence of institutionalised and transparent invoicing by the IEC, as well as the high interest rates for late payments set unilaterally by the Israeli regulator.
Steen Lau Jorgensen, World Bank country director for West Bank and Gaza, said that the outstanding payments owed to the IEC took a heavy toll on a struggling Palestinian fiscal situation and have led to arbitrary cuts in the power supply.
He added that these outstanding payments have been deducted from tax revenues owed to the Palestinian Authority by Israel.
The World Bank report also noted that the Palestinian territories are highly dependent on the electricity provided by the IEC, at it makes up approximately 88 per cent of the area’s total consumption.
It also noted that in a healthy economy, the power sector is expected to generate revenues and contribute to economic development, but the lack of a power energy sector is putting immense pressure on the Palestinian economy, as the non-payment by Palestinian distribution companies and municipalities for purchased electricity has put further constraints on the Palestinian Authority’s budget and has hindered its economic stability. (T/P002/P3)
Mi’raj Islamic News Agency (MINA)
