Gilatz makes first foray into Israeli solar sector

Sunday Energy Ltd. has signed a cooperation agreement with Gilatz Investments Ltd. (TASE: GLTS) for the installation of 50 small photovoltaic solar facilities in Israel. The deal follows Sunday's agreement with Ormat Industries Ltd. (TASE: ORMT). Gilatz today notified the Tel Aviv Stock Exchange (TASE) that it has signed a memorandum of understanding (MOU) for to lease 50 roofs on which 50-kilowatt photovoltaic solar facilities will be installed. The deal will cost up to NIS 50 million, with an option to expand by 30 roofs, bringing it up to almost NIS 80 million.

Gilatz will pay NIS 950,000 (plus VAT) per facility. Sunday Energy will design, buy, and install the systems (under and equipment procurement and construction contract), as well as obtain the regulatory permits for the facilities. It will also be responsible for operating and maintaining the systems. Gilatz will rent the roofs for 24 years and 11 months, for no more than NIS 25,000 per roof per year.

Gilatz will sell the electricity generated to Israel Electric Corporation (IEC) (TASE: ELEC.B22) under 20-year power purchasing agreements. The first facilities are scheduled to be installed and hooked up to the national grid in January.

Gilatz currently has photovoltaic power facilities in Spain that generate 15 megawatts. This is its first project in Israel.

Last month, Sunday Energy signed a NIS 720 million deal with Ormat to set up and operate mid-sized photovoltaic facilities of up to 5 megawatts.

Gilatz's share rose 7.2% by mid-afternoon to NIS 10, giving a market cap of NIS 255 million.

Published by Globes [online], Israel business news - www.globes-online.com - on November 1, 2009

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