Veolia to team with Rapac on $500m power plant

Rapac will also team up with Solarit Doral to build mid-sized photovoltaic facilities.

A new player is trying to push their way into Israel's electricity market: Rapac Communication and Infrastructure Ltd. (TASE: RPAC). The company today notified the TASE that it will team up with French infrastructure giant Veolia Environnement SA (NYSE: VE; Euronext: VIE) subsidiary Dalkia Israel Ltd. to build a natural gas-driven power station in central Israel, and with Solarit Doral Company Ltd. to build a solar energy venture.

Veolia and Rapac signed a memorandum of understanding (MOU) to build a 400-megawatt power station at an estimated investment of $500 million. The power plant will use General Electric Company (NYSE: GE) gas turbines. Sources inform ''Globes'' that the companies already have a site for the power station - a 40-80 dunam (10-20 acre) site near Kiryat Gat. They are also in the final stages of submitting a provision electricity production license to the Electricity Authority.

Although there are numerous ambitious large private power plants under consideration, none have been realized yet.

Rapac and Veolia will jointly seek a financial partner for the venture, and will reportedly approach foreign institutions. Under the MOU, Rapac will build the power plant, while Dalkia Israel will operate it. Dalkia is already a 20% partner in Israel Corporation's (TASE: ILCO) power plant project planned for Mishor Rotem.

In the second venture, Rapac and Solarit Doral signed an MOU to install mid-sized photovoltaic power facilities (50 kilowatts-5 megawatts). Doral will seek to obtain the land rights and licenses for the facilities and Rapac will take care of the financial side.

Rapac's share rose 3.3% today to NIS 15.94, giving a market cap of NIS 217 million.

Published by Globes [online], Israel business news - - on May 4, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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