Israel to Use Frozen Palestinian Tax Funds to Offset PA Electricity Debt

Israel Electric Company to stop cutting power to Palestinian Authority in exchange for state's promise to use NIS 300 million in Palestinian tax revenues to defray PA's debt.

ברק רביד - צרובה
Barak Ravid
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Palestinian carpenter Mahmoud Zaghlol sits without work during a power cut by Israel'S electric company at his shop in the West Bank city of Nablus, February 25, 2015.
Palestinian carpenter Mahmoud Zaghlol sits without work during a power cut by Israel'S electric company at his shop in the West Bank city of Nablus, February 25, 2015. Credit: Reuters
ברק רביד - צרובה
Barak Ravid

The Israel Electric Corporation has agreed to stop cutting power to the Palestinian Authority in exchange for the Israeli government’s promise to use some of the Palestinian tax revenues it has been withholding to partially defray the PA’s debt, a senior Israeli official said Thursday.

This week, the IEC twice cut power to the northern West Bank for periods of up to an hour to protest the PA’s unpaid debt to the company, which totals some 1.9 billion shekels ($483 million).

Under the deal reached Thursday between the Prime Minister’s Office and the IEC, the electric company will receive 300 million shekels ($75.8 million) from the frozen PA tax revenues, equivalent to the Palestinian debt for the last three months – December, January and February.

In addition, a solution has been found to a crisis surrounding the new Palestinian city of Rawabi; the city has remained empty due to Energy and Water Resources Minister Silvan Shalom's refusal to connect it to the water infrastructure.

Prime Minister Benjamin Netanyahu has approved a proposed compromise stipulating that both Rawabi and several neighborhoods in nearby settlements will be connected to the water system. The senior official stated that Israel had informed the Palestinian Authority of the decision.

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