Earlier than expected, Dalia Energy has exercised its right to increase its share in the construction of a new data center at the Eshkol site, north of Ashdod Port. The planned data center will be one of the largest in the country with an electrical output of up to 250 megawatts. Dalia Energy has reached an agreement with its partners, Serverfarm and the Israel Infrastructure Fund (IIF), that it will hold 50% of the venture, after previously holding an option to receive 30% of the company's shares through Eshkol Energies, a company in which Dalia has a 75% stake.
The total planned investment in the venture has jumped sharply from $1.5 billion for the construction of the building and substation to $4.5 billion, which indicates optimism about the feasibility of the project, despite the crisis in the electricity sector and suspension of the distribution of electricity licenses for data centers by the Electricity Authority for a period of 140 days.
Following the move, the construction plans and the maximum scale of the activity were updated to include construction costs and the establishment of a substation at a total cost of $4.5 billion, plus another $7 billion for the facility's computing and equipping it with servers and graphics processors - a cost that is usually borne by the potential tenant, which may be a neo-cloud company or an end customer.
Serverfarm, IIF and Dalia are banking on a direct electricity supply from the new power plant currently being built nearby, north of Ashdod port and pending a regulatory change that will allow a direct connection between a power plant and data centers. This connection, taken for granted, is prohibited by Israeli law, which requires the power plant and the data center to be connected separately to the national grid.
In May, Dalia obtained NIS 5.7 billion in financing to build the power plant on the Eshkol site, which will provide electricity produced with natural gas with a capacity of 850 megawatts, and which will be called "Eshkol Avshalom Haran", named after the late Avshalom Haran - one of Dalia's founders and pioneers of the private energy sector in Israel, who was murdered on October 7th in Kibbutz Be'eri. The power plant is scheduled to open for commercial operation in the second half of 2029.
Planning at a cost of NIS 70 million
Dalia is not the only player entering the data centers industry. In recent weeks, Nofar Energy has also entered the field by purchasing land in Shoham from BSR, with a 120-megawatt electricity license. Doral and Ampa also announced a partnership to build a data center in Beit Shemesh, along with the logistics company of real estate developer Nadav Balila.
Published by Globes, Israel business news - en.globes.co.il - on August 25, 2026.
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