Trade History

League of Arab States as a champion of the PAEM establishment and transition stages

Established in 1945, the League of Arab States (LAS) is the oldest Arab regional organization and its membership includes all Arab States. The objective of LAS is to strengthen the links between its Member States by promoting joint Arab action in various fields. Integration projects are among the priority projects to LAS given their technical, economic and social benefits to the region. Therefore, LAS has endorsed supporting regional economic projects including Arab electricity interconnection projects that are the first building blocks for the establishment of a Pan-Arab Electricity Market (PAEM). In this context, the Arab Ministerial Council for Electricity -operating under the umbrella of LAS- prioritized the Arab electricity interconnections and the establishment of the PAEM.

Based on decisions of the Arab periodic development summits and the decisions of the Arab Ministerial Council for Electricity, the League of Arab States in cooperation with the Arab Fund for Economic and Social develop- ment (AFESD) conducted a comprehensive study on Arab electricity inter- connections. The study looked into expanding and strengthening the Arab interconnections and evaluated the exploitation of gas as fuel for producing and exporting electricity. In parallel, the World Bank executed establishing the institutional, legislative and legal framework for establishing the PAEM. This included the preparation of four main documents representing the legislative and legal framework for achieving the PAEM which are: the Memorandum of Understanding, the General Agreement, the Pan – Arab Electricity Market Agreement, the PAEM Grid Code. These efforts led to the decision of the Council of the League of Arab States to approve the Memorandum of Understanding for the establishment of the PAEM, which was signed by representatives of 16 Arab States in the year 2017.

Given the importance of the PAEM and the benefits that the Arab region can reap once the market reaches full integration, the Arab Development and Economic summit supported in its fourth regular session (Lebanese Republic: January 2019) the efforts of the Arab Ministerial Council. It welcomed the signing of the Memorandum of Understanding by the Arab States and called on them to implement its commitments to provide necessary political support for establishing the electricity market at the highest level.