Israeli Finance Minister Moshe Kahlon sat down on Sept. 13 with Hussein al-Sheikh, the minister of civil affairs for the Palestinian Authority (PA), at a table festooned with Israeli and Palestinian flags. It was quite obvious that Kahlon was excited.

Kahlon and Sheikh were meeting to sign an agreement to settle the enormous debt that the PA owes the Israeli Electric Company, estimated at 1.78 billion shekels ($480 million). According to the terms of the agreement, the PA will pay the electric company about a third of its debt — 570 million shekels ($150 million) — in cash, while the rest will be paid out over 48 installments. About 500 million shekels ($132 million) of the debt will be forgiven.

The agreement was worked out behind the scenes over many long months, with the help of the Norwegian government. It allowed the PA to take control of its own electricity market and rid itself of an enormous debt, which weighed down on the management and supply of electricity to cities across the West Bank. The deal should also end the power cuts initiated by Israel in April.

According to the agreement, responsibility for managing the Palestinian electricity market will be transferred to the PA. To this end, a new body will be formed with the exclusive right to buy electricity from the Israel Electric Company and will bear full responsibility for paying the electric bills of the residents of the PA. Furthermore, it was decided to create two teams of professionals, one Israeli and the other Palestinian, to put together a commercial agreement between the two parties and to develop new energy projects.