IFC, IBRD, MIGA, Government of Canada support solar energy plant in Gaza

The International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Bank for Reconstruction and Development (IBRD), members of the World Bank Group, with the support of donors, including the government of Canada, are supporting a $12 million solar project in Gaza, to ease an acute energy shortage and help create jobs.

According to an IFC statement, a copy of which was obtained by Petra, this solar project is the first privately financed energy project in more than a decade in Gaza.

The joint investment will help Palestine Real Estate Investment Company (PRICO), part of the PADICO Holding, construct, operate, and maintain a 7-megawatt rooftop solar photovoltaic power plant in Gaza. This will provide critical energy to 32 factories in Gaza’s only industrial park, the Gaza Industrial Estate, at a price 10 percent cheaper and up to 50 percent below the cost of diesel-based generation.

The project is expected to create approximately 800 direct and indirect jobs, thanks to the more reliable and cheaper electricity that will be available for factories inside the park.

“The project comes at a critical time in Gaza as the only power plant suffers from lack of fuel, aging feeding lines, and damage caused by three wars in the last decade,” said PADICO Board Member, Bashar Al Masri.

He added: “The agreements are part of our strategy to support the renewable energy sector and boost investments in industrial cities, and specifically in Gaza, which will help provide a continuous and sustainable electricity source to Gaza’s only industrial city.” Up to just 10 years ago, Gaza had a full, round-the-clock electricity supply every day. Today, daily outages in Gaza currently range from 12 to 16 hours, with annual supply at less than 50 percent of average demand and only a third of peak demand.

There is also a high reliance on imported energy. Currently, 70 percent of electricity and 100 percent of primary energy used in Gaza is imported.

“The rooftop solar project is critical to ease the energy shortage in the Gaza Industrial Estate and, in turn, help create jobs,” said World Bank Country Director in the West Bank and Gaza, Marina Wes. She added: “Factories inside the industrial estate will be able to expand operations and hire additional workers, thanks to more reliable and affordable electricity.” The project’s total cost is estimated at up to $12 million, 75 percent of which will be covered by the World Bank Group, including up to $4 million from the IFC-Canada Climate Change Program.

MIGA, the Group’s investment guarantee arm, is providing critical political risk insurance covering risks of expropriation, war, and civil disturbance.

The guarantees amount to $7 million and are issued through two trust funds managed by MIGA: the West Bank and Gaza Investment Guarantee Trust Fund, supported by the government of Japan and the Palestinian Authority, and the Conflict-Affected and Fragile Economies Facility, supported by the UK’s Department for International Development, the Canadian International Development Agency, and the Swedish International Development Cooperation Agency.

Source: Jordan News Agency