EGYPTIAN ELECTRICITY TO GAZA

C O N F I D E N T I A L CAIRO 004495 SIPDIS SIPDIS STATE FOR NEA/ELA AND NEA/IPA E.O. 12958: DECL: 07/18/2016 TAGS: ENRG PREL KPAL EG SUBJECT: EGYPTIAN ELECTRICITY TO GAZA Classified By: Pol/Econ Counselor Catherine Hill-Herndon, reason 1.4 (b ) and (d) ¶1. (C) SUMMARY: Since the June 28 Israeli strike knocking out Gaza's power station and the subsequent cuts in Israeli supply, Egypt has been providing 5 megawatts of emergency supply to Gaza, with plans to increase supply to 12 megawatts. In late June, prior to the strike, Egypt and the PA were working on an agreement to link Gaza to the Egyptian grid, a move that could shave 40 percent off Gaza's electric bill. The project reportedly has the financial backing of the Islamic Development Bank. End Summary. ¶2. (U) Regional Arabic language newspaper Al Hayat reported July 18 that the Palestinian Authority (PA) had made arrangements with GOE to provide emergency electricity supply to Gaza to compensate for the deficit caused by the destruction of the Gaza power station and cut-off of supply from Israel. According to reports, on June 22nd, a week before the June 28th strike that destroyed the plant, the PA signed an agreement with Egypt linking Gaza to the Egyptian grid via a new 50 kilometer (31 mile) power line from El Arish in Egypt's northern Sinai to the Rafah crossing on the Egyptian-Palestinian border and an eight kilometer (five mile) underground line within the Gaza Strip. ¶3. (C) Ministry of Electricity First Under Secretary Hammed Emmara (please protect) confirmed July 18 that there were negotiations between the GOE and a Palestinian delegation led by Acting Minister of Electricity, Omer Katana, regarding the electrical connection to Gaza and emergency needs. According to Emmara, the PA delegation requested urgent, temporary electricity supply support, and the Egyptian Ministry of Electricity offered to provide them with something in the range of 5 megawatts on a temporary basis, with the potential to increase the amount to 12 megawatts. Emmara said he should have more details regarding the outcomes of the discussions this week. The underground cables being built from El Arish to Gaza to supply emergency power now will likely be used to provide contracted power in the future. According to the Egyptians, linking Gaza to the Egyptian grid could shave 40 percent off Gaza's electric bill. ¶4. (SBU) According to reports, Gaza could be connected to the Egyptian grid very quickly once the necessary LE 161 million (USD 28 million) in financing is secured. We understand the PA has already applied to the Islamic Development Bank for the loan, and bank approval is expected in the next few days. NOTE: The Jeddah-based Islamic Development Bank is an international financial institution established in 1973 and operates on Shari'ah banking principles. Bank membership is open to members of the Organization of the Islamic Conference. JONES