Israel recently disclosed that its desalination capacity exceeds the country’s water needs.
By Avi Bar-Eli | Jan. 9, 2014 |

Both Jordan and the Palestinians are seeking to buy Israel’s excess desalinated water, TheMarker has learned.

Israel recently disclosed that its desalination capacity exceeds the country’s water needs, and the Jordanian government contacted Israel in a bid to take advantage of that. Last week, the Finance Ministry and the Water Authority decided to cut desalinated water production by 30% this year, because rain has been relatively plentiful over the past two years.

Israel intends to produce 360 million cubic meters of desalinated water this year, of its 510 million cubic meter capacity. This is expected to save the country 191 million shekels ($54 million).

Jordan apparently wants to double the amount of water it buys from Israel, effective immediately. This would work out to another 10 million to 20 million cubic meters of water a year.

The Palestinian Authority also sent out feelers regarding the option of purchasing more water from Israel, but a conflict over the PA’s outstanding 1.15 billion shekel bill to the Israel Electric Corporation apparently precluded even talks on the matter.

Part of the reason Jordan is thought to need more water is the steady flow of Syrian refugees entering the country. Around one million Syrians have fled to Jordan since the civil war began three years ago.

Officials in Jerusalem are reportedly discussing the Jordanian request, and are expected to meet with counterparts in Amman soon to address details.

As part of the bilateral peace agreement, Israel sells Jordan 35 million cubic meters of water a year from Lake Kinneret. In addition, Jordan allows some 20 million cubic meters of water from the Yarmouk River to flow into Israel during the winter, of which some 5 million to 10 million cubic meters returns to Jordan over the summer. Israel also uses around 7 million cubic meters of water produced on the Jordanian side of the Arava desert.

Israel provides Jordan with 15 million to 20 million cubic meters of water a year, net.

Jordan buys the water Israel is required to sell it at cost, $0.04 per cubic meter. For anything above this amount, Israel charges Jordan $0.45, for an estimated 30 million shekels a year.

It is believed that Jordan would pay significantly more for any additional water purchased from Israel, given the higher marginal cost of desalination. In addition, the request may run into technical issues, given the limited pipe infrastructure between Israel and Jordan.

Israel sells 60 million cubic meters of water to the Palestinians every year, in accordance with international agreements. It charges the PA 2.80 shekels per cubic meter for the first 50 million cubic meters and 3.50 shekels per cubic meter for anything above that amount.

The PA pays Israel 150 million shekels annually for water, deducted from the taxes Israel collects on behalf of the PA.

Israel Electric Corp., in contrast, bills the PA for its power use directly. The PA is 1.1 billion shekels in arrears to the utility, as TheMarker recently reported.

The PA reportedly refuses to pay the debt. Palestinian Finance Minister Shukri Bishara recently proposed, in a letter to the Israeli government, that half the debt be forgiven, with payment of the remaining 550 million shekels spread over a period of 20 years.

Israel rejected the offer.