Ashelim plant solar energy sales to hit NIS 6b

The IEC, EDF, and Shafir Engineering consortium has withdrawn from the tender.

One of the last hurdles in the tender for the construction and operation of the solar energy plant at Ashelim has been overcome. Sources inform ''Globes'' that the Ministries of Finance and National Infrastructures joint tender committee, chaired by Deputy Accountant General Avi Dor and Ministry of National Infrastructures director general Shaul Tzemach, sent the format of a power purchasing agreement (PPA) with Israel Electric Corporation (IEC) (TASE: ELEC.B22) to the bidders in the tender.

The PPA is due to be a key part of the franchise agreement that the government will sign with the tender winner. The PPA was delayed for months due to various disputes between IEC, the government, and the Public Utilities Authority (Electricity). However, most of the disputes were resolved in the past two weeks, and the tender committee sent the agreement to the bidders.

The tender is a BOT project for the construction, operation and maintenance of two thermosolar power plants at Ashelim in the Negev. The value of the PPA for the sale of electricity to the national grid is estimated at NIS 6 billion (NIS 3 billion for each power plant) over the 25-year franchise period. Sales will be NIS 250-300 million a year.

The sources added that a consortium of IEC, France's EDF Energy SA (Euronext: EDF), and Shafir Civil and Marine Engineering Ltd. has officially announced its withdrawal from the tender. This was because the Ministry of Finance allowed the consortium to participate only if it would build one of the two power plants, because EDF is a shareholder in Dalkia SA, the energy subsidiary of Veolia Environnement SA (NYSE: VE; Euronext: VIE), which is also bidding in the tender.

The consortium of Israel Corporation (TASE: ILCO) subsidiary IC Green Energy Ltd. (ICG) and Canada's SkyPower Corporation will also apparently not submit a bid in the tender.

Ormat Industries Ltd. (TASE: ORMT), however, is expected to participate, having found an international partner. Consequently, sources in the government believe that four or five consortia will bid in the tender.

The consortia are:

Published by Globes [online], Israel business news - - on November 11, 2009

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

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