Egypt to pay $1.76B to Israel over electricity

International Chamber of Commerce rules in Israel's favor after IEC sues Egypt for failure to deliver natural gas in 2011, 2012.

Tova Dvorin,

Gas pipeline explosion (illustrative)
Gas pipeline explosion (illustrative)
Flash 90

Two Egyptian gas companies will pay a sum of $1.76 billion dollars to the Israeli Electric Company (IEC), the International Chamber of Commerce ruled Sunday, for damages incurred as a result of failures to transfer gas from Egypt to Israel. 

In 2011, Egyptian gas companies EGPC and EGAS stopped providing gas to Israel due to a series of pipeline bombings in the Sinai peninsula.

The explosions - the work of terror groups - caused the IEC to turn to more expensive fuels to make up for the loss, and increased the price of electricity to the general public by 30% to make up for costs. 

In 2012, following severe losses, the IEC Board filed a lawsuit against both companies with international arbitration, claiming the stopped pipeline violated a 2009 agreement; the Egyptian companies claimed that the contract had not been breached, as the pipeline had been damaged by a third party. 

On Sunday, after four years of arbitration, the International Chamber of Commerce ruled in Israel's favor, with Egypt to pay the IEC the original $1.76 billion cost plus interest to be calculated upon a system agreed between all parties. 

This marks a rare victory for the IEC, which is already suffering more recent losses from the massive debt Hamas and the Palestinian Authority (PA) have owed Israel over the past two years - debt which has only partially been settled and has, at times, led the IEC to cut off electricity to Palestinian Arabs.