GZ-ELECTRIC UTILITY MANAGEMENT PROJECT

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The objective of the Electric Utility Management Project for West Bank and Gaza is to reduce the fiscal burden of the electricity sector on Palestinian Authority (PA's) budgetary resources through lower deductions from clearance revenues for arrears owed to Israel Electric Corporation Limited (IEC). There are three components to the project. The first component is the supply and installs four new bulk 161/33/22kV supply substations5 in the northern, central and southern areas of the West Bank. These substations will replace most of IEC's existing connection points (33kV and 22kV and 400V) that supply Palestinian load centers. The West Bank will then be supplied at IEC's high voltage tariff, which is lower than IEC's current flat tariff. It will also allow substantial growth in electricity purchases from IEC that could not otherwise happen, and which therefore provides a good incentive for IEC to support the modification. The second component includes: (i) development of the new power distribution system in the northern, central and southern areas of the West Bank served by the new 161 kV substation; (ii) rehabilitation of distribution networks in all the electricity utilities of the West Bank and Gaza; and (iii) installation of prepaid meters and automatic meters reading systems in all utilities of the West Bank and Gaza. Finally, the third component includes: (a) capacity building for all electricity utilities in the West Bank and Gaza; this includes technical assistance for procurement of tools, vehicles, IT hardware or software and training; (b) providing consulting services to Palestinian Energy and Natural Resources Authority (PEA) for promoting the development and utilization of renewable energy resources and adopting energy efficiency measures. This component will assess the renewable energy resources of West Bank and Gaza, particularly solar, and facilitate the development of an appropriate institutional and legal framework. Consulting services will also include development of the second stage of electricity sector reform and auditing services for the Project Management Unit (PMU); and (c) operating cost of the PMU.