BICOM

The Palestinian Authority (PA) Prime Minister yesterday announced the construction of the first Palestinian power station in the West Bank.

The plant, which is to be located near the West Bank city of Jenin, is the PA’s largest infrastructure project. At a ceremony yesterday to mark the beginning of construction, PA Prime Minister Rami Hamdallah called the power station “one of the most important, pioneering and strategic projects in our land”. He also predicted that it would be “one of the bricks in establishing the State of Palestine”.

The plant, which will cost an estimated £481m, is being funded by the PA’s sovereign wealth fund the Palestine Investment Fund (PIF) and other Palestinian institutions including the Bank of Palestine and Palestinian businesses.

Construction is expected to take around two and a half years and when completed, the power plant will create thousands of jobs and provide electricity to 50 per cent of Palestinians living in the West Bank, who have access to electricity. There are also plans for an additional Palestinian power plant near the West Bank city of Hebron.

Muhammad Mustafa, Chairman of PIF explained that the Jenin plant will save significant money in comparison to the roughly £600m paid by the PA each year to import electricity from Israel. In September, Israel and the PA reached an agreement to end a long-running dispute over an enormous unpaid Palestinian debt to the Israel Electric Corporation, worth around £425m.

Mustafa and Hamdallah both confirmed yesterday that the Jenin plant will operate via natural gas from the Gaza offshore gas field. However, no agreement has yet been reached with Shell, which is developing the Gaza gas field and it is likely that in the short-term, the Jenin plant will rely on natural gas from Israel’s offshore fields.