Israel Plans to Recoup 2 Billion-Shekel Electricity Debt from Palestinian Authority

Israel’s Finance Ministry has found a legal solution that would enable Jerusalem to recoup the Palestinian Authority’s electricity debt in Judea and Samaria and eastern Jerusalem for the first time in three decades.

Under the outline, the government will deduct millions of shekels from funds collected on behalf of the P.A. each month and transfer them to the Israel Electric Company (IEC).

Ramallah’s debt currently stands at two billion shekels ($526.4 million), funds that Israel has been unable to collect despite previous debt payment agreements.

The news comes three months after Israeli Finance Minister Bezalel Smotrich ordered his advisers to find a solution to the matter. The move is permitted under a law enacted following the Oslo Accords allowing Israel to deduct funds destined for the P.A. to offset its debts.

Israel will reportedly deduct between 20 million shekels ($5.3 million) and 30 million shekels ($7.9 million) per month from monies transferred to the P.A.

The 2021 State Comptroller’s report warned that the P.A.’s outstanding electricity bill was the main reason for the continued struggles of the IEC.

The apparent move comes after Smotrich in May ordered Israel Tax Authority Director Eran Yaacov to transfer 3.2 million shekels ($876,000) from revenues collected for the P.A. to victims of terrorism and their families, offsetting the stipends Ramallah disburses monthly to Arab terrorists.

It followed a previous transfer in January of 138.8 million shekels ($39.5 million) in accordance with a court order.

In 2021, the P.A. paid out an estimated 512 million shekels ($157 million) as part of its “Pay-to-Slay” policy.