The World Bank - EMSRP II Project - December 31, 2008 - Back to Resources Page

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Background

The Palestinian Authority and the donor community are concerned with the increasing amount of electricity arrears owed by some municipalities in the West Bank. Though local governments (LGs) in the West Bank and Gaza are legally responsible for electricity distribution, in practice not all of them provide this service directly. Most LGs are associated with regional utilities that provide this service for them. To illustrate, none of the 25 municipalities in Gaza directly provide electricity distribution, while 56 municipalities in the West Bank (out of the 107) are associated with regional utilities. This leaves 511 municipalities that are still directly in charge of electricity distribution.
Considering this situation, the Municipal Development and Lending Fund (MDLF), as the delegated implementation Agency of the Emergency Municipal Services Rehabilitation Project II (EMSRP II), which is funded by the World Bank and the Government of Netherlands, contracted the preparation of this study to provide needed technical assistance to address this issue. This study constitutes part of the products of the third component of the EMSRPII. It should be noted that one of the objectives of the EMSRPII is to help mitigate further deterioration in the delivery of essential municipal services including, among others, electricity distribution.

Objective

Though some of the utilities also owe a significant amount in arrears, this study only focuses on the 51 municipalities. The objective is to diagnose the issue of arrears in these 51 municipalities, assess the expected municipal fiscal impact of transferring this service to regional companies; and examine alternative municipal revenue sources, as well as potential expenditure reductions to mitigate the expected budgetary impact. This process takes into account that the transfer of the municipal electricity distribution service to regional companies is part of the current policy of the energy sector in Palestine. Hence, it is expected that this study will shed some light on how to proceed in the implementation of sector policy. Furthermore, this report will offer specific recommendations on how to gradually eliminate the current flow of electricity arrears during the transition period.

To download the full report please below:

Attachment	Size
MinicipalFiscalImpact.pdf	101.44 KB

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The World Bank - EMSRP II Project - December 31, 2008 - Back to Resources Page