Israeli consortium wins Ramat Hovav power plant tender

Ramat Hovav  / Photo: Yossi Weiss
Ramat Hovav / Photo: Yossi Weiss

China Harbor and Mivtach Shamir lost to Shikun u'Binui and Edeltech's NIS 4.25 billion bid, which was much higher than expected and will result in a cut in electricity rates.

Shikun u'Binui Holdings Ltd. (TASE: SKBN) and Edeltech have won the large Israel Electric Corporation (IEC) (TASE: ELEC.B22) tender for the sale of the Ramat Hovav power plant with a bid of NIS 4.25 billion. This is a figure far higher than the NIS 2-3 billion forecast. The Israeli consortium's bid beat that of a consortium of China Harbor and Mivtach Shamir, which won the previous IEC tender for the Alon Tavor power plant, also with a higher than expected bid.

According to the precedent set by Alon Tavor, the IEC will use the unexpected surplus from the Ramat Hovav tender to reduce electricity rates. With more than NIS 1 billion than expected, this could translate into a one-time reduction of 5% on electricity bills.

Minister of Energy Yuval Steinitz said, "This is a huge success for IEC's reform plan as part of the cancellation of its monopoly on electricity production. This fantastic price is another demonstration of the business sector's belief in the success of the reform and it will allow an additional cut in the price of electricity."

IEC chairman Yiftah Ron-Tal said, "IEC is leading the competition that will bring a cut in electricity rates and a lower cost of living and help Israelis cope with the economic difficulties of this period in the midst of the coronavirus crisis."

Ramat Hovav operates on natural gas and is one of five power plants being sold by IEC over five years as part of the electricity reform plan. Alon Tavor has already been sold for NIS 1.9 billion, double the amount expected. Next for sale is the Reading power station in Tel Aviv, to be followed by part of the Hagit power plant near Yokneam in 2022 and Eshkol in Ashdod in 2023.

Published by Globes, Israel business news - - on June 10, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Ramat Hovav  / Photo: Yossi Weiss
Ramat Hovav / Photo: Yossi Weiss
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