Clean Energy for Human Security in the State of Palestine

Written by: Benjamin Basmaci, Regional Climate Specialist, UNDP Regional Hub for Arab States

February 21, 2023

Solar panels in one of the areas in Palestine which is supported by the SDG-Climate Facility project country grant, in Qabalan Municipality

Photo credit: UNDP Regional Hub for Arab States

The impacts of climate change in the State of Palestine have been manifested through changed precipitation patterns, frequent extreme weather events, and droughts coupled with increased desertification, to name a few. These manifestations are affecting human security and leading to growing tension among and between communities due to the limited access to natural resources. In addition, the State of Palestine is facing challenges of energy and electricity access which are affecting multiple sectors and people ability to meet basic needs.. For a landlocked country which suffers from the absence of primary resources for energy generation, this becomes a more pressing challenge, especially that current electricity generation is mainly dependent on fossil fuels.

Improved access to renewable energy means empowering Palestinian communities as they currently rely on external sources to meet their energy demands. More than 91% of its electricity supply is imported from Israel which results in electricity costs becoming significantly higher, compared to domestic electricity power generation. In addition to significantly higher electricity prices that is later transferred to the consumers, the Palestinian communities are also experiencing frequent and long-lasting power outages which impact human security as electricity plays an important role in meeting basic needs such as powering healthcare clinics and educational spaces. These challenges create risks for energy poverty, especially for communities that are marginalized and have fuel deficiency, and unable to operate generators to meet their basic needs. Moreover, necessary interventions on electric grid and distribution losses need to be addressed due to poor grid maintenance and infrastructure which further contributes to high consumer prices and power outages.

Mr. Husam Tubail, Team Leader at UNDP’s Programme of Assistance to the Palestinian People (PAPP) explained that “people in Palestine are experiencing uneven distribution of, and use of modern energy services, including electricity which is contributing to human insecurity. There are multiple benefits to accelerating and diversifying energy access, as the access to energy services can power healthcare facilities, educational spaces and support livelihoods through generating jobs and income for families.”

Despite the known facts of the multiple benefits that affordable energy access brings, the transition is not a rapid fix. In fact, it must incorporate least-cost options, best-fit approaches that reflect the local people’s needs and capacities to pay for the services. Therefore, the SDG-Climate Facility Project: Climate Action for Human Security, initiated a pilot with the objectives to re-energize socioeconomic activities by implementing a decentralized solar project that seeks to stimulate private sector engagement and investment by working with public and private partnerships. The SDG-Climate Facility project is a multi-partner platform which is funded by the Swedish International Development Cooperation Agency (Sida), and brings UNDP together with the League of Arab States, Arab Water Council, World Food Programme (WFP), UN Environment Programme Finance Initiative (UNEP FI), UN office for Disaster Risk Reduction (UNDRR) and UN Human Settlements Programme (UN-Habitat).

To enable marginalized communities in Palestine to access electricity at a lower price, the pilot worked with Local Government Units (LGUs) to identify the most suitable communities that would benefit from grid rehabilitation activities and solar power plant installation. In doing so, the pilot project conducted technical surveys in 129 communities, spread across the West Bank and identified 20 of the most vulnerable communities based on key technical criteria which had a particular focus on electricity access. The initial 129 communities that were identified in the first phase of the pilot project were recognized due to high energy insecurity, as the communities are entirely dependent on Israeli Electricity Company imports, combined with low quality grid, high energy losses, frequent power cuts and deficiencies in institutional, technical, and financial capacities that have resulted in high-risk investments for private sector companies.

Based on findings, the pre-installation assessment identified suitable communities in Nablus and Jenin Governorates that would later benefit from de-risking activities to catalyze private investment in Solar PV technologies, including tailored business models that laid out plans for an effective revenue model. To complement the business model and minimize the risks for private sector investments, the pilot project also worked on the rehabilitation of electricity grids to reduce losses, replacement of electrical transformers and building capacities at the local level. More specifically, the tailored business models focused on elevating electricity access for marginalized communities through creating opportunities that would generate incentives for private sector investments. For instance, in the Arrabah municipality, the pilot project implemented a Build-Operate-Transfer business model which seek to help cash-strapped local governments to finance larger, complicated projects that they might otherwise not be able to manage and afford. In Qabalan, the initial business model study found that the optimal solution for solar PV stations would consist of a discounted price option, with SATCO, a private sector company in Qabalan Municipality, owning the station to benefit less financially secure communities to help LGUs improve their financial situation to provide services for their citizens and contribute to job creation. To minimize the risks for the community, SATCO also agreed to maintain and operate the solar PV station for 25 years, compared to Arrabah where the optimal solution involved a community ownership of the plant after 6 years.

Sweden has been a long supporter of renewable energy projects in the Arab region and has been a generous financial supporter of the SDG-Climate Facility project. Ms. Carmen Lopez-Clavero, Environment and Climate Change Regional Programme Manager at the Swedish Embassy in Jordan, highlighted during a recent visit to one of the beneficiary communities that “Renewable energy solutions are great ways of diversifying energy supply and reducing dependency on imported fuels. At the same time, it mitigates the impact on the climate, along with the potential to creating economic development and new jobs in Palestine. Supporting initiatives like this, help reduce the barriers of private sector engagement, while helping unlock investments in order to transition towards low carbon energy infrastructure.”

The pilot has managed to address several key challenges including creating incentives for private sector investment, especially as government has limited financial capacity to maintain and operate the solar PV station, an inclusive way of integrating private sector while building resilience that brings benefits to people was important. In fact, the pilot managed to catalyze USD 2.35 million from private sector companies through investors such as SATCO for the Qabalan municipality in Nablus Governorate and a private sector company created by Arab Palestinian Investment Company (APIC) and Bank of Palestine for Arrabah in Jenin Governorate the project grant. This is of particular importance, especially given the urgency to accelerate the Palestinian energy sector transition that brings multiple benefits to communities, people and planet.


Figure 1 – 1.8 MW solar station conceptual design conducted by UNDP as part of the technical support for Qabalan Municipality (left) and ongoing civil works (right)

Through the SDG-Climate Facility project, UNDP is working with governments and private sector stakeholders to remove barriers that hinder investment in renewable energy. It does so by implementing de-risking measures that would encourage the private sector to invest in marginalized communities. The pilot project in Palestine is expected to benefit more than 20,000 people and provide them with reliable, locally generated and affordable electricity access through renewable energy installments.

The project’s added value is that it facilitated a real partnership between public and private entities that will pave the way for scaling up beyond the pilot project has been recognized by the Ministry of Local Governmental which ended up signing an agreement with UNDP to enable impact at scale beyond the project itself. The agreement aims to contribute to achieving the national target of install an additional 400 MW capacity by 2030 to allow for climate change mitigation and climate action for human security for the Palestinian communities.