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Government set to discuss provision of electricity to Gaza

2006-07-04

July 2 2006
By Akiva Eldar, Haaretz

In the wake of international pressure, the government was to vote Sunday on a plan to supply electricity from Israel to the Gaza Strip, in order to resume the power supply, which was halted following an Israel Air Force strike on a major Palestinian power station there.

If approved, the Israel Electric Corporation will erect special electrical lines stretching from Israel into Gaza.

Government sources said that Israel had been forced to provide power to Gaza through the Electric Corporation due to American and British pressure. Nevertheless, the move requires special government approval so that work can begin immediately.

The Gaza Strip requires 200 megawatts of electricity, half of which is provided by the power station, and half which is supplied by the Israel Electric Corporation. After the IAF strike, the power station‘s capacity was cut by half.

United States officials said Saturday that U.S. funds would be used to pay for the damage caused by the strike. The power station was insured by a U.S. government agency, according to The Boston Globe.

The U.S. Foreign and Defense Ministry departments that oversee foreign relations were unaware of the decision to target civilian facilities in the Strip, or the decision to attack the power station. Because of this, officials did not know that the station was insured by a U.S. government agency. Israel did not inform the U.S. prior to attacking the power station.

The power station in Gaza was built over a period of five years, at a cost of $150 million. In 1999, the Enron Corporation, along with Palestinian businessman Said Khoury, began working on the project. In 2000, Khoury‘s Morganti Group purchased Enron‘s share of the project.

The power station began operating in 2002, reaching full commercial capacity in 2004. The owners of the power station insured it, through the Overseas Private Investment Corporation, for a sum of $48 million due to "political risks." OPIC is a U.S. government authority that insures U.S. investments in developing markets.

A spokesman for the agency said the insurance purchased by the Morganti Group covers instances of political violence, which include wars and acts of terror.

The plant supplies electricity to some 860,000 people.


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