The Israel Electric Corp. tenders committee has chosen to sell the Hagit East power station to the consortium of Shikun & Binui Holdings Ltd. (TASE: SKBN) and Edeltech Group, which bid NIS 1.6 billion. The sale is part of the 2018 electric grid reform in which government-owned Israel Electric Corp. is relinquishing its electricity production monopoly.
The Hagit power station is near the Elyakim Interchange between Zikhron Yaakov and Yokneam and has a capacity to produce 1,400 megawatt. In the tender, 660 megawatt of the production capacity was sold. Four groups bid for the tender: Dalia Energy; Mivtah Shamir's RAM Group; Rapak Energy and Ashtrom Energy; and Shikun & Binui and Edeltech.
To date Israel Electric Corp. has sold several power stations including Alon Tabor, which has supply capacity of 580 megawatt and was sold for NIS 1.88 billion to a company controlled by China Harbor together with Mivtach Shamir and Rapak Energy. The Ramat Hovav power station, which has a production capacity of 1,137 megawatt was also sold to Shikun & Binui and Edeltech for NIS 4.26 billion.
Last month the process began for the sale of the Eshkol power station. This is the largest power station to be sold to date and which operated by natural gas has a production capacity of 1,683 megawatt.
According to the Israel Electric Corp. tenders committee Mivtach Shamir's RAM Group finished second in the tender for the Hagit East power station. The tenders committee was headed by Israel Electric Corp. CEO Ofer Bloch and the other members of the committee were CFO Avi Doitchman, legal advisor Yael Nevo, VP production and energy Ram Erlichman and VP strategy, innovation and restructuring and head of the professional committee Amir Livne. The Hagit East power station is due to be handed over to Shikun & Binui and Edeltech at the start of June 2022.
Another commercial organization that was party to the deal was the Kiston Fund, which will be financing Edeltech's part of the deal together with the Menorah Mivtachim insurance company. This is the third power station deal in which Kiston has been involved. In the past it provided a convertible loan (a loan that will be converted in part from the equity of the power station). Edeltech was also part of the purchase of the Ramat Hovav power station. In another deal, the Kiston Fund even acquired part of the rights to the IPM power station.
Minister of National Infrastructures, Energy and Water Resources Karine Elharrar said, "I congratulate the Israel Electric Corp. on the sale of the Hagit power station, which represents a significant step in realizing the vreform of the electricity grid. This is a huge milestone on the way to decentralize the electricity grid in a way that will benefit consumers and with the urgent need to develop the grid."
Israel Electric Corp. CEO Ofer Bloch added, "The tenders committee examined four excellent bids. All of them demonstrate, without exception, the high belief of investors in the power stations of the Israel Electric Corp. and its employees. The company's management and its employees are committed not only to the success of the sale but also implementing and realizing the reform plan, which will change the face of the company and the electricity grid."
Published by Globes, Israel business news - en.globes.co.il - on December 9, 2021.
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