Enlight secures finance for Golan Heights wind farm

Enlight wind farm in Ireland  photo: PR

A consortium headed by Bank Hapoalim is financing the project.

The Valley of Tears wind turbines farm project on the Golan Heights is ready to go. Enlight Renewable Energy Ltd. (TASE: ENLT), which deals in solar and wind energy in Israel and Europe and owns 36% of the project, today reported to the TASE that an agreement to finance the project had been signed with a consortium headed by Bank Hapoalim (TASE: POLI) and including Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5). Construction of the project, expected to take two years, will begin in the coming weeks.

The lending consortium will provide a non-recourse loan at an 80% leverage rate. The NIS 525 million index-linked loan will cover the construction period, during which the loan will bear 3-3.5% interest, and 18 more years, during which it will bear 2.3-2.8% interest. Minrav Holdings Ltd. (TASE: MNRV) and Nextcom Ltd. (TASE:NXTM) will construct the project for NIS 136 million through a special purpose vehicle they founded.

The wind turbines farm, which will be the largest in Israel, is a joint venture of Enlight, Aveeram, and Dr. Eli Ben Dov, who owns 40% of it. The wind farm is slated for construction on agricultural land of five kibbutzim on the Golan Heights. Agricultural activity will continue on the land concurrently with operation of the turbines.

The project consists of 30 General Electric-made wind turbines with a total capacity of 96 megawatts, equivalent to the electricity consumption of 40,000 average households in Israel. Revenue from sales of electricity from the project is projected to reach NIS 100-110 million annually for the 20-year license period. The total cost of the project is estimated at NIS 660 million.

Share still surging

The project obtained rates approval from the Public Utilities Authority (electricity) last month. The rate for selling electricity to the grid will be NIS 35.81 per kilowatt-hour, more than a third less than the domestic rate paid to Israel Electric Corporation (IEC) (TASE: ELEC.B22) by home consumers.

Enlight has provided 70% of the financing needed to develop the project to date, including Ben Dov's share, under agreements for an interest-bearing owners' loan. Aveeram provided the other 30%. On the closure date for the new financing agreement, Enlight will provide 42% of the remaining equity needed, together with a capital injection for the project and an owners' loan to its partners in the project. Aveeram will put up 18% and Ben Dov the rest.

Enlight's share price responded to the announcement with a 2% rise, completing a 40% surge over the past year and pushing its market cap up to NIS 975 million. The shares of the company, controlled until recently by Shaul Elovitch's Eurocom Communications, are currently owned by investment institutions, including Phoenix, hedge fund Noked Capital, Psagot Investment House Ltd., Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), and Harel.

Published by Globes [online], Israel business news - www.globes-online.com - on July 9, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Enlight wind farm in Ireland  photo: PR
Enlight wind farm in Ireland photo: PR
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