TRANSFER OF EGYPTIAN TRANSFORMERS TO GAZA POWER

C O N F I D E N T I A L JERUSALEM 004238

SIPDIS

SIPDIS

NEA FOR FRONT OFFICE; NEA/IPA FOR WILLIAMS/MAHER/STEINGER;
PRM FOR PDAS GREENE AND PRM/ANE; NSC FOR
ABRAMS/DORAN/WATERS; TREASURY FOR
SZUBIN/LOEFFLER/NUGENT/HIRSON; BRUSSELS FOR LERNER; PLEASE
PASS TO USAID FOR KUNDER/MCCLOUD/BORODIN

E.O. 12958: DECL: 09/20/16
TAGS: EAID PREL ENRG KWBG PHUM
SUBJECT: TRANSFER OF EGYPTIAN TRANSFORMERS TO GAZA POWER
PLANT ANTICIPATED

REF: JERUSALEM 3555

Classified By: Acting Principal Officer Thomas Duffy, Reasons 1.4 (b) a
nd (d)


1. (C) The executive managing director of the Gaza Power
Gernerating Company (GPGC),Walid Salman, told ConGen
EconChief September 19 that the first shipment from Egypt of
temporary replacement transformers for the damaged Gaza Power
Plant may arrive within a week. Salman advised that the GOI
had notified him September 14 of its approval for the
delivery of the transformers through Kerem Shalom crossing
into Gaza from Egypt and entry of Egyptian technicians needed
to install the equipment in Gaza. He said that GPGC is
curently working with the Egyptians on a phased delivery
schedule. (Note: Reftel noted that PA President Abbas'
office authorized August 3 the purchase of seven transformers
from Egypt with USD 1.8 million provided by the Arab League
to replace those destroyed in June 28 Israeli airstrikes
against the Gaza Power Plant. End note.) Salman advised
EconChief September 20 that he expected that 7 or 8 Egyptians
would arrive in Gaza September 21 to inspect the situation
and begin preparing the ground for the equipment and the rest
of the team.


2. (C) Anders Ohrstrom, Head of Development Cooperation at
the Consulate General of Sweden, told ConGen Econoff
September 13 that his government had signed a grant agreement
September 12 with the Palestinian Energy and National
Resources Authority (PENRA) worth USD 2 million in Swedish
funds for the transportation and installation of the
transformers. The grant will also cover the cost of
reconstructing and preparing the areas where the transformers
will be installed. Ohrstrom estimated that as much as six
weeks would be needed before any installation could begin.
He noted, for example, that the Palestinians were still in
the process of cleaning up the plant and demolishing damaged
structures. He added that a new concrete base for the
transformers would have to be poured, a process he said would
take several weeks.


3. (C) Swedish Consul Annika Johansson told ConGen Econoff
September 14 that the transportation and installation
contract will not come into force and no funds will be
disbursed until the Swedish government approves the contract.
Johansson expressed her concern that, although contract
approval would probably be granted "within a few days," it
might take as long as two weeks for a required down payment
to be transfered from Stockholm. Johansson told ConGen
Econoff September 20 that she understood the Egyptians,
Palestinians and Israelis were finalizing plans for the first
delivery and, based on this, it appeared that the Egyptian
supplier was prepared to start sending the equipment and
technicians prior to receipt of the down payment from Sweden.
(Note: UN Deputy Special Coordinator Kevin Kennedy told
Econoff September 14 that Egyptian officials had told him
that the supplier would not demand receipt of a down payment
prior to moving the transformers and sending the 41
technicians. End Note.)


4. (C) In a related development, although the opening of a 5
MW electricity feeder line from Egypt to Rafah has increased
the number of hours electricity is available in Rafah, local
residents are complaining that the power supplied is very
weak. Lights in Rafah are noticeably dimmer than they were
before the 5 MW line opened, according to USAID Gaza-based
staff.

DUFFY