After almost eleven years of delays, the Israel Power Management (IPM) power plant at Be'er Tuvia is getting underway. Yesterday, a NIS 1.6 billion financing agreement was signed with Deutsche Bank and Bank Hapoalim for construction of the company's 450 megawatt combined cycle technology private power plant. The cost of construction is estimated at NIS 2 billion.
The license to construct the power plant was first awarded in 2007, but construction was held up for years, among other things because of changes of ownership. One of the owners, Avraham Nanikashvili, was indicted and had to sell his 80% stake in Triple-M, which holds 84% of IPM.
The IPM power plant will be fueled by natural gas to be bought from the Leviathan and Tamar reservoirs. It is due to start operating in the second half of 2020. The financing agreement was signed in accordance with new regulation in the power industry introduced by Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz, together with Dr. Assaf Eilat, chairman of the Public Utility Authority - Electricity.
The power plant will be constructed by Siemens. It will supply 3.5% of Israel's electricity needs, and produce power at 60% efficiency, which will make it the most efficient power plant in Israel. It will thus both contribute to the quality of the environment and provide an answer to the expected rise in demand for power in the coming years. Most of the plant's output (85%) will be sold to the national power grid, with the rest being sold directly to large private consumers.
Among Triple-M's shareholders are Global Power, controlled by Ehud Ben-Shach and Nissan Caspi, the Noy Infrastructure and Energy Investment Fund, Leumi Partners, and Moti Ben-Moshe's Extra Holdings. Ownership of the power plant (direct and indirect) is distributed as follows: Gobal Power - 26%; Moti Ben-Moshe - 12%; the Yesodot fund owned by Yitzhak Mirilashvili - 12%; the Noy fund - 9%; Leumi Partners - 9%; Moti Fridman - 8%; Moshe Tery - 8%; IPM 3000 (the founders group) - 16%.
Deutsche Bank is leading an international financing consortium that includes Credit Suisse, KFW, and other European banks. Bank Hapoalim led the financing agreement together with a consortium that includes The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), and First International Bank of Israel (TASE: FTIN).
Published by Globes [online], Israel business news - www.globes-online.com - on January 30, 2018
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