With Israel's water problems currently making headlines, desalination company IDE Technologies is strengthening its grip on the water desalination sector, announcing the exercise of its first refusal rights to acquire the holdings of Hong Kong-based Hutchison Water, its partner in the Sorek desalination plant franchise (49%) for NIS 195 million before adjustments, sources inform "Globes."
The announcement of the sale comes six months after Hutchison Water selected the bid submitted by the Noy Fund to acquire its share in the desalination facility. Noy Fund, which wanted to acquire a foothold in the hot water desalination sector, confirmed the report, saying, "We have been notified by Hutchison that IDE has decided to exercise its first refusal rights. We are studying the decision and its consequences." Following the completion of its acquisition, IDE will hold 100% ownership of the franchise for the desalination facility for Sorek (the SDL company).
The Sorek facility is the largest desalination plant in Israel and among the largest in the world. It is located one kilometer south of the Dan Sewage Reclamation (Shafdan) Project close to the Sorek River in the sandy area of Rishon Lezion. Construction of the $400 million plant began in January 2011. The plant, which has supplied drinking water since August 2013, has an annual production capacity of 150 million cubic meters.
Israel currently has five desalination plants: Ashkelon, Palmachim, Hadera, Ashdod, and Sorek. These facilities use the reverse osmosis (SWRO) method to supply drinking water to the National Water Carrier. The five facilities supply an aggregate total of 585 million cubic meters of desalinated water a year, while a target production capacity of 1,100 million cubic meters by 2030 has been set, double the current capacity. This target will be reassessed in 2023 according to the state of Israel's water resources.
Three desalination facilities in Israel and one in California
IDE specializes in the development, design, product, and operation of desalination facilities and advanced water solutions. The company, which was founded over 50 years ago, has carried out over 400 projects in 40 countries, including Israel, India, China, Australia, and Thailand, in addition to countries in Europe, North America, Latin America, and the Caribbean Islands.
Among other things, IDE owns half of the desalination plant in Ashkelon (a production capacity of 120 million cubic meters per year), half of the desalination plant in Hadera (127 million cubic meters per year), 51% of the Sorek plant, and full ownership of the desalination facility built in 2015 in Carlsbad, California.
In late 2017, Israel Chemicals (TASE: ICL: NYSE: ICL) completed the sale of its 50% stake in IDE for $167 million. The group that bought the shares included Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) (currently owns 20% of IDE's shares), the Teachers and Kindergarten Teachers' Advanced Training Funds (20%), and IDE executive chairperson Avshalom Felber (10%). The other 50% is held by Delek Group Ltd. (TASE: DLEKG), controlled by Yitzhak Tshuva.
Noy Fund, headed by chairperson Pinchas (Pini) Cohen, managing partner Ran Shelach, and managing partner Gil-Ad Boshwitz, has been operating since May 2011 and takes part in a long series of infrastructure projects in Israel. Among other things, it is a partner with Hutchison Water in Star Pumped Storage, which is building the Kochav Hayarden hydroelectric power station, where a waterfall powers turbines that produce electricity.
Published by Globes [online], Israel business news - www.globes-online.com - on June 10, 2018
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