IEC making only trivial purchases from private producers

Israel Electric Corporation will spend only 1% of its 2009 budget on buying electricity from private producers.

Sources inform "Globes" that Israel Electric Corporation (IEC) (TASE: ELEC.B22) is expected to purchase only NIS 194 million of electricity from private producers in 2009. This will represent just 1% of the IEC's annual budget.

This will be an increase on the purchases of NIS 100 million in 2006 and 2007 but is still only a negligible proportion of IEC's overall sales.

Two months ago the Public Utilities Authority (Electricity) finally determined new regulations and tariffs for private producers requesting to set up conventional power stations. Despite the safety net for those tariffs provided, the entry of private producers into the market is being delayed by problems in negotiations with natural gas suppliers - Egypt's East Mediterranean Gas Co. (EMG) and the UK BG Group plc (NYSE: BRG; LSE: BG). The credit crunch has also made it difficult for companies to raise financing for the construction of projects.

Published by Globes [online], Israel business news - - on February 15, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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