PRICO Solar Gaza

completed

The proposed investment is for the financing of a 7 megawatt peak (MWp) rooftop photovoltaic (“PV”) solar energy project to provide the Gaza Industrial Estate (“GIE”) with a source of domestic power generation (the “Project”). The proposed IFC investment will comprise (i) an A Loan of up to US$4 million and (ii) a senior concessional loan of up to US$4 million from IFC as implementing entity of the IFC Canada Climate Change Program (“IFC – CCCP”) to two special vehicles wholly owned subsidiaries of the Palestine Real Estate Investment Company (“PRICO or the “Client”). PRICO is a company organized under the laws in force in the West Bank Palestinian Territories. The project will be developed by two wholly owned subsidiaries of the client, one based in the West Bank and one in Gaza, to attend to the various aspects of the financing and operation of the project. The project has a total estimated cost of up to US$12 million and is expected to provide up to 80 percent of expected electricity needs of GIE at a price substantially lower than the alternatives. GIE is connected to the grid and will enter under a net metering agreement with local distribution company Gaza Electricity Distribution Company (GEDCO). This project is proposed as an integrated World Bank-IFC investment with the World Bank providing investment co-financing for an expected 10 percent of the project costs through its “Finance for Jobs” (F4J) Series of Projects (SOP). The project is expected to help alleviate the ongoing electricity shortage in Gaza, which has electricity availability averaging only 8 hours a day. Due to the lack of domestic energy resources, the Palestinian Territories are highly dependent on electricity supplies from Israel (63 percent) and Egypt (8 percent). The only domestic power source, the fuel oil fired power plant in Gaza, has an available capacity of 60MW and relies 100 percent on imported liquid fuel.  The project will cover an area of 5.7 ha and include 32 factories. Production expected to be generated from the PV system is 10.5 gigawatt hours (GWh) per annum.  PRICO will receive payments from the factories within the GIE. Construction will take place between September, 2017 to June, 2018, and the project will be operational for a 20-year period.  The Engineering, Procurement and Construction (EPC) contractor and Operations & Maintenance (O&M) provider is being procured.  The same EPC contractor will provide O&M functions for at least the first two years of operations.  Located in the Palestinian Territories approximately 3 kilometers east of Gaza City, the GIE was established with the assistance of both the World Bank and USAID.  Agricultural lands are located to the north, south and west of the GIE with the border of Israel to its east.  There are also scattered residences to the west of the GIE with more densely distributed structures/residences to the west of Road 4 (approximately 300-m from the GIE).  Imported construction materials will pass through the Karm Abu Salem crossing (located 35-kilometers south of the project site), and the route does not cross through residential areas. The concession agreement between the Palestinian National Authority and Palestine Industrial Estate Company (PIEDCO) was signed in 1996 for a 49-year period with eligibility for an extension of another 49 years.  Totaling 50 hectares, the GIE consists of a mix of light industry including bottling factories, food production, woodshops and plastics for domestic products (e.g. plumping, piping).