On Thursday, the management of Israel Electric Corporation (IEC) discussed its next steps in the tender for the sale of the Eshkol power station in Ashdod, and decided to allow Dalia Energy Companies to defer the deposit of the second installment of its guarantee by ten days. Dalia Energy Companies won the tender to buy the power station, and, according to the original rules of the tender, it was supposed to have deposited a guarantee of NIS 100 million, in addition to the NIS 100 million guarantee it deposited as a condition of participation in the tender.
Dalia Energy Companies won the tender (together with haulage and logistics company Ta’avura, which has since withdrawn from the consortium) with a bid of NIS 12.4 billion. The next bid was NIS 7 billion, from OPC and the Noy fund. Dalia is now proposing to pay NIS 9 billion on the date set for financial closing, December 3, and to make a further payment when the Eshkol 2 power plant is built. The large gap between the bids is seen causing difficulties for Dalia in raising finance.
The benefit of accepting Dalia’s revised offer is higher proceeds for IEC, which it can invest in transmission infrastructure and in lowering electricity prices, but in the long run a situation is liable to be created in which companies will not participate in tenders because of the excessive flexibility being shown in this case.
Moreover, the proceeds to IEC and the lowering of electricity prices are liable to be delayed substantially following the request for an injunction that OPC and the Noy fund are expected to file if Dalia’s revised offer is accepted.
Published by Globes, Israel business news - en.globes.co.il - on July 2, 2023.