Israel energy company Solegreen (TASE: SLGN) and Tadiran Group (TASE: TDRN) have reached a strategic agreement. Solegreen and signed a framework deal. Under the terms of the agreement, Solegreen will energy storage systems from Tadiran Group subsidiary Aviem, for an overall supply of up to about 600 megawatt hours, for its solar energy project backlog, which combines storage and the company’s storage projects in Israel. The overall cost of the agreement is up to $130 million, with delivery of the systems to be carried out over the next two years.
Tadiran Group acquired Aviem last October for NIS 30 million, plus milestone payments. Aviem is a long-established and successful company that has been operating for about 50 years, specializing and leading in electrical energy systems of various types, including: uninterruptable power systems, power suppliers and chargers, batteries, frequency converters, as well as batteries and electric vehicle charging systems for residential buildings.
The systems that Solegreen will buy are designed for installation in projects that the company will build, following the winning of the Israel Electric Authori competitive procedure for producing electricity with photovoltaic technology combined with storage capacity, and projects that the company has developed in the field of micro-grid energy storage installations on the customer’s land.
In the more distant future, Aviem might increase revenue from this deal, if and when following the five-year warranty period, Solegreen exercises its right according to the agreement to contract with Aviem for an annual service agreement for a period of up to 18 years, and/or an agreement to increase the batteries capacity of the systems.
Aviem will bear responsibility for the efficiency, availability, and storage capacity according to the fixed values in the framework agreement and the responsibility to repair breakdowns, according to the customary service level agreements (SLA) in the sector.
The overall framework agreement is also an agreement to provide warranty, preventative maintenance and augmentation services for the systems by Aviem, for a basic period of five years, from the date of the installation and final delivery of all the systems, without an additional payment to the price of the systems.
The storage systems that Solegreen will buy will be designed by Aviem in line with the Solegreen’s needs and include an integrate solution based on storage systems manufactured by German company SMA, which is one of the world’s leading manufacturers in the field of energy storage solutions.
Solegreen CEO Tom Shafran: "We are reporting today on a framework agreement for implementing the purchase of a significant volume of storage systems. This agreement is expected to provide a solution to the company’s overall needs in the field of storage, for projects that Solegreen will build in Israel over the next two years. After a long and careful tender process conducted by Solegreen, which focused on an overall energy solution package, the company has selected the solution proposed by Tadiran, which was preferable on all levels to the other proposals."
Tadiran CEO and controlling shareholder Moshe Mamrud added, "The deal with Solegreen proves that acquiring Aviem has been very successful for the Group - and this is in a period of less than a year since the signing of the transaction. We are proud to cooperate with a strategic partner like Solegreen, in a market with huge potential like the storage market. The aim of Tadiran was, and still is, to create a complete solution for all those who need energy storage. We will also continue to work to locate business and cooperation opportunities in the energy market over the coming year."
Aviem CEO Ran Abudi said, "This is the largest ever deal in the energy storage market in Israel. Several months ago, we set a target of being the leading and most significant player in the energy storage market in Israel and indeed, in a relatively short time, the first target has been achieved. Solegreen was impressed by the capabilities of Eviam/Tensor and its knowhow and experience of more than 50 years, combined with engineering and implementation capabilities of the highest technological levels."
Published by Globes, Israel business news - en.globes.co.il - on May 23, 2022.
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