Shikun & Binui, Abengoa sign Ashelim thermosolar BOT agreement

Negev Energy has signed the 28-year operating agreement for the power station.

Shikun & Binui Holdings Ltd. (TASE: SKBN), controlled by Shari Arison, and its Spanish partner Abengoa SA (IBEX: ABG), have taken the next step toward construction of the thermosolar power station at Ashelim. After their joint venture, Negev Energy Ltd., won the BOT tender to build the project, the company today signed the 28-year operating agreement for the power station, after which it will revert to the state.

Negev Energy will build a 110-megawatt thermosolar power station at an investment of $1.1 billion. Construction of the power station is scheduled to take three years from the date the permits are obtained, and it is due to come on line in 2017. All the electricity generated will be sold to Israel Electric Corporation (IEC) (TASE: ELEC.B22) under a 25-year power purchasing agreement. The electricity's base price will reportedly be NIS 0.79 per kilowatt/hour, well below the original proposal in the tender.

Negev Energy is now in talks with financial institutions to secure financing for the project.

Ashelim will have a second 121-megawatt thermosolar power station, which will be built by a consortium of Brightsource Energy Inc. and France's Alstom SA (Euronext: ALO). The two power stations will generate 2% of Israel's electricity needs.

Published by Globes [online], Israel business news - - on October 1, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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