18 July 2008
The World Bank has agreed to additional financing for electricity and water projects in the West Bank and Gaza. But the reach of the assistance to the most needy, and the effects on curbing high utility bills are still questionable.
On June 30, 2008, the World Bank and the Palestinian Authority (PA) signed additional financing agreements totaling $29 million for electricity and water projects in West Bank and Gaza. The money is part of $7.7 billion in international aid, pledged in the Paris donors’ conference in December 2007, to be transferred to the Palestinians through 2010. While $12 million would be devoted to improving electricity services in the West Bank, the remaining $17 million is planned for Gaza electricity and water projects. According to Dr Fayyad, the Palestinian Prime Minister, “Gaza’s share of this World Bank grant would stay on hold until the Israeli siege of Gaza ends.”
As for the West Bank share, the additional financing goes to the Electric Utility Management Project that aims at relieving the fiscal burden of the power sector on the Palestinian Authority’s fiscal resources. The Israel Electric Corporation Ltd (IEC) is the main source of electricity from which many electricity utilities, municipal councils and village councils purchase power for West Bank residents’ use. Electricity used to be provided to all residents regardless of their ability to pay the high bills. The Israeli government deducts the amounts owed by the purchasers to IEC from the PA’s clearance revenues. The new program aims at improving the collection of utility revenues.
Under the new system, people must pay in advance for their estimated use of electricity. Given the fact that high utility bills were the main reason for dilemma in the first place, which made municipalities unable to pay to IEC, the World Bank is assisting the PA to create a social tariff -- a minimum of 50,000 households would be receiving assistance (including a discounted utility rate) by the end of 2010. Critics say that this target is far below the real level of demand for assistance by those deprived households. According to Grassroots International, the monthly income of 46.5 percent of the Palestinian households in West Bank is below the national poverty line. That means that the number of needy households is 200,245 in West Bank alone.
Sources
Additional financing to World Bank water projects, press release, World Bank Press Release, June 30, 2008 (World Bank website)
The World Bank supports Electric Utility Management in West Bank and Gaza, press release, World Bank Press Release, June 30, 2008 (World Bank website)
Open Letter to the High-Level Conference on World Food Security, Grassroots International, June 4, 2008 (Grassroots International website)