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Bombed Gaza Power Station Insured by U.S. Government's OPIC

Byline: Matthew Russell Lee at the U.N.

UNITED NATIONS, July 14 -- The bombed Gaza power station was covered by a $48 million political risk insurance policy, it has emerged. The insurer is the U.S. government's Overseas Private Investment Corporation, OPIC. The current policy was signed in mid-2004, between OPIC and the U.S.-based company Morganti, which succeeded to the interest of Enron in the plant. OPIC has insured other Enron power plants, in the Philippines, Turkey and India. OPIC issued a press release in 2004, which was at, but has since been removed from OPIC's web site.

            The head of the UN's Office for the Coordination of Humanitarian Affairs (OCHA), Jan Egeland, told reporters on July 11 that the plant was insured by "an American insurance company" and that the policy might not be paid on, due to sanctions against the Hamas government. Immediately following Egeland's briefing, Inner City Press asked OCHA staff for the name of the American insurance company, as well as who had been paying the insurance premiums.  Having not heard back, on July 12 at the Office of the Spokesman for the Secretary-General's noon briefing, Inner City Press asked:

"In his briefing yesterday, Jan Egeland... mentioned that there is an insurance policy on the power plant by an American insurance company, but that they may not be able to pay because of US sanctions against Hamas. It’s a factual question of, like, what’s up with the insurance, but does the UN agree -– does the Secretariat agree with Jan Egeland that Israel should be responsible for rebuilding the power plant? 
Deputy Spokesman: ...In terms of the details of who’s paying for the insurance and all of that, I think that’s something you may want to follow-up with the agencies on the ground, or we could look into it for you. 
Question: I asked OCHA and, even though they said it, they didn’t seem to know. It would be good to know. 
Deputy Spokesman: We’ll address it to the agency on the ground."

     The answer subsequently provided, through officials who spoke only on background, is that the Gaza power plant was a joint venture between the Palestinian company Consolidated Construction Corporation and the Houston-based Enron, succeeded by Morganti, and was covered by a $48 million insurance policy from the U.S. Overseas Private Investment Corporation.

  On the afternoon of July 14, Inner City Press interviewed Riyad Mansour, the Permanent Observer of Palestine to the UN, who stated that OPIC is the insurer, and "they have to pay." Mr. Mansour added, "Let them collect from Israel."

            An agency of the U.S. government, OPIC describes itself as "support[ing] U.S. investment in emerging markets worldwide, fostering development and the growth of free markets." The description is from the web site, from which the 2004 press release about insuring the Gaza power station has been moved or deleted.

   OPIC previously provided insurance to Enron's Dabhol power plant in India, to other Enron power plants in Turkey and in Subic Bay in the Philippines, and other Enron projects in Argentina and Uzbekistan (a project that never came to fruition). A search on July 14, 2006, of results in only one mention of Enron, and that along with BP Amoco and ABB as being involved in renewal energy. The Gaza plant is not listed as one of OPIC's "project profiles," the lead one of which involves importing tea from Rwanda.

            The generators in the Gaza power plant were specially built by ABB, according to Jan Egeland. One of impacts of their destruction by bombs is to interrupt the flow of both water and sewage. UN's World Health Organization estimated, prior to the current crisis, that 64% of the health problems in Gaza were due to water quality.

            The officials interviewed by Inner City Press, speaking only on background, also noted that the blockade of Gaza has interrupted not only the trucking-in of gas, including for backup electricity generators, but also the flow of gas through the Nahal Oz pipeline, through which neither people nor arms could be traveling.

            On July 14 at the UN, Under Secretary for Political Affairs Ibrahim Gambari came to the Security Council stakeout and read a statement that "the Secretary General... reminds all of their obligations to take absolute care to spare civilian populations from harm, and to protect their life, infrastructure and livelihoods. In particular, care should also be taken to avoid damaging power stations, water supply and sanitation facilities."

            Mr. Gambari took a single question from the media: Inner City Press' question about the electrical power situation in Gaza. "This is about Lebanon," Mr. Gambari replied, adding before he left that the brief statement he had read was intended to help avoid a repetition in Lebanon of the bombing of the Gaza power station.

            Previously, Inner City Press asked Israel's Ambassador to the United Nations Dan Gillerman for his response to the UN's Jan Egeland's statement that Israel should repair the Gaza power plant. Amb. Gillerman responded that Israel does not intentionally target civilians, but that he has no information about Israel repairing the power plant.  Inner City Press asked U.S. Ambassador John Bolton if he had any comment on Jan Egeland's call for Israel to repair the power plant; Amb. Bolton said, "I have no comment on that."  Developing...

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