OPC signs $300m deal for Kiryat Gat power station

Idan Ofer  photo: Tamar Matsafi

Mitsubishi Hitachi Power Systems' US-based unit PW Power Systems will construct the 400-megawatt power station.

The share price of OPC Energy (TASE: OPCE), in which Idan Ofer-controlled Kenon Holdings (Nasdaq: KEN) owns a controlling interest, is up over 4%, following the company's report to the TASE that it had signed a $300 million agreement for the construction of the Zomet power station near Kiryat Gat. PW Power Systems, a US-based unit of Mitsubishi Hitachi Power Systems, will do the actual construction.

The company decided to proceed with construction of the project despite a recommendation by the Committee for the Reduction of Concentration against granting it the conditional license it requested for producing electricity at the power station. According to OPC's report to the TASE, the order for the work will be placed when financing for the project is closed, which is expected in 2019. Among other things, financial closing depends on obtaining a license and approval by the Committee for the Reduction of Concentration, which is by no means a certainty. Up until the financial closing, PW Power Systems will carry out detailed planning and other deal with other matters necessary for obtaining a building permit.

Under the agreement signed yesterday, PW Power Systems will build the power station and supply both advanced aero engine-derived gas turbines and certain maintenance services for the turbines for the power station. PW Power Systems undertook to complete construction of the power station within two and a half years of the date on which an order for beginning the work is received.

OPC Energy is preparing for construction of a 400-megawatt conventional flexible open cycle power station running on natural gas. The need for a flexible power station of this type increases with a transition to renewable energy. It is believed that the power station will begin operating in 2022.

Published by Globes [online], Israel business news - www.globes-online.com - on September 6, 2018

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

Idan Ofer  photo: Tamar Matsafi
Idan Ofer photo: Tamar Matsafi
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