Israel Electricity Company admits to voluntarily forgiving USD 1.3 bn of Egyptian gas debt as part of a 2018 arbitration settlement, the company announced in a filing with the Tel Aviv Stock Exchange, according to Haaretz. The company intentionally kept the 85% write-off a secret until yesterday for diplomatic reasons, Israel’s Government Companies Authority said. The IEC agreed to accept USD 500 mn over eight and a half years instead of USD 1.76 bn paid over 15 years.

Background: Egyptian gas companies were ordered to pay the IEC a USD 1.76 bn arbitration settlement after they reneged on a natural gas supply contract amid the tumult of 2011. The Egyptian government had made reducing the award a condition for accepting any gas agreement with Israel. This led to a settlement in November as Egypt and Israel concluded an agreement that will make Egypt a key customer for Israeli natural gas.

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