Phoenix Finance (TASE: PHOE) is investing NIS 234 million in Generation Capital (TASE: GNRS) PowerGen for a 7.2% stake.
Phoenix will also convert financing it previously extended for the group's projects in Poland in exchange for increasing its stake in the company to 12.4%. This investment reflects a valuation of NIS 3.25 billion for PowerGen, a huge jump compared with the NIS 1.26 billion recorded in Generation Capital’s books at the end of 2024, and hundreds of millions of shekels more than was recorded in the company's books in March. The current investment will translate into a profit for the fund in the second quarter worth an estimated NIS 270-320 million before tax.
This investment is being made even before the approval of Generation Capital’s giant deal to acquire Shikun and Binui Energy for an additional NIS 4.45 billion. According to Generation Capital’s announcement, two additional large investors, probably institutional, are expected to invest a total of NIS 500-800 million, subject to completion of the deal. So the total investment will be between NIS 734 million and NIS 1 billion.
Small holdings in power plants and projects in Europe and the US
PowerGen is a growing player in the energy market. Two years ago it had a number of small holdings in power plants and projects in Europe and the US, and in recent years has undergone dramatic growth including the Reindeer power plant, whose planning was initially delayed, but was approved by the government and is already valued at NIS 1.8 billion according to the Nofar Energy deal for a minority stake. This is before signing a gas deal and financial closing for construction. PowerGen has led the development and acquisition of solar projects, including the acquisition of Yuvelei Shemesh in early 2026. Together with Bezeq, PowerGen established the largest private household electricity supplier in Israel in Bezeqgen, with over 100,000 customers.
PowerGen also recently received approval to build the David power plant in the industrial zone in Beit Shemesh in a 50% partnership with Shamir Energy. And of course, PowerGen is now set to merge with Shikun & Binui Energy, which holds even larger assets than it valued at NIS 4.45 billion. This amount will be invested by the parent company Generation Capital, with the support of a number of institutional investors that, according to Generation Capital’s announcement, will invest NIS 500-800 million, in addition to the recent investment by Phoenix.
Phoenix has recently made a variety of investments in the energy sector. It already owns a stake in Shikun & Binui, which is now selling its energy company to PowerGen. It owned 10% of the Dorad power plant but sold its stake to Menora Mivtachim and Edeltech, and held a significant stake in the Reindeer power plant until it recently sold it to Nofar Energy. Now, Phoenix is returning to the energy sector with the investment in PowerGen.
Generation Capital said, "The two deals reported today are part of the complex of steps the fund is taking to close the acquisition deal for Shikun and Binui Energy, which was signed last week. The fund was prepared after building the financing sources for the deal several months ago, with the completion of raising NIS 1 billion, with the participation of all the major institutional entities in Israel, and completion of the realization of the investment in Porterbrook of about NIS 500 million. In total, the fund has cash and available resources of about NIS 1.8 billion at its disposal, and the current low leverage, which stands at less than 10%, allows for raising bonds to supplement its own sources while maintaining a high rating level. The investment by Phoenix and the institutions joins the existing financing and effectively supplements financing sources for the Shikun and Binui Energy deal."
Published by Globes, Israel business news - en.globes.co.il - on August 3, 2026.
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