As part of a wave of power station construction aimed at meeting electricity demand in the Tel Aviv metropolitan area, Edeltech, Menora-Mivtachim, and the Keystone infrastructure fund have closed financing for a new power plant near the Sorek desalination plant. The consortium, which won the state tender to build the plant, will raise about NIS 5.6 billion for the project, with financing led by Mizrahi Tefahot Bank and Discount Bank. The plant will be fueled by natural gas purchased from Energean and is scheduled to begin operations in November 2029.
The consortium won the tender for the Sorek power plant in December 2024 and signed an agreement in late 2025 to procure a power turbine from Siemens - a product currently in short supply globally due to unprecedented demand for electricity. The consortium also entered into a gas supply agreement with Energean, the operator of the Karish gas field. In closing finance, the consortium has now completed the final step prior to the actual commencement of construction.
The plant will have a capacity of 870 megawatts but will receive availability payments from the power grid for only 670 megawatts, due to constraints within the national transmission network. Availability payments are received for the time during which a power plant is available for operation, even if it is not actually producing electricity.
In the tender, the group submitted the lowest bid for an hour of availability - NIS 0.3.18 per available kilowatt. This amounts to up to roughly NIS 21,000 for every hour of availability, in addition to payment for the actual electricity production. For comparison, the Kesem power plant, developed by Shamir Energy and the first of the current wave to be established near the Tel Aviv metropolitan area, will receive a significantly higher rate of NIS 0.3.81, while other plants, such as Reindeer (developed by PowerGen and Nofar), will receive NIS 0.3.31.
A dedicated partnership will be established for construction
Electricity consumption in Israel, excluding data centers, is projected to grow by about 3% annually over the coming years. When combined with the anticipated wave of data center construction, this points to a dramatic surge in electricity demand.
Consequently, there is an urgent need for the rapid development of the power grid, by the Israel Electric Corporation, and the creation of new generation capacity, encompassing both conventional (gas-fired) power plants and renewable energy sources, primarily solar. Establishing a power plant in relative proximity to the Tel Aviv metropolitan area is critical for supplying electricity to the heart of the high-demand region, while minimizing the need for transmission infrastructure, which is both time-consuming and costly to develop.
In a somewhat unconventional move, driven by concerns on the level of commitment international contractors might maintain given the current geopolitical reality, the project developers will also serve as the executing contractors. Edeltech and Keystone will form a dedicated partnership to carry out construction of the power plant, with the Issa Group serving as a subcontractor. According to the companies, "This model, which combines a local execution arm with international management and engineering expertise, is designed to reduce reliance on foreign construction contractors and strengthen the ability to navigate operational and geopolitical challenges, while adhering to the project schedule."
The gas to fuel the power plant will be purchased from Energean for a period of 15 years, for about $1.4 billion. Once the plant begins producing electricity, it will remain under the ownership of the group for 24 years and 11 months with ownership then reverting to the state, which can then offer it again through a tender process.
Ministry of Finance deputy accountant general Oshrat David Dakar said, "The transition to the construction phase of an approximately 850-megawatt power plant, utilizing some of the world’s most advanced technology, is a major achievement, reflecting the state’s capacity to lead complex national infrastructure projects and demonstrates the advantages of the PPP (Public-Private Partnership) model, as well as the importance of cooperation between the public and private sectors in advancing infrastructure vital to the economy."
Ministry of Energy and Infrastructure deputy director general Yossi Dayan added, "The establishment of the Sorek power plant marks a significant step toward strengthening the State of Israel’s energy security, specifically by ensuring a reliable, stable, and continuous electricity supply to the Gush Dan region and central Israel. The plant’s strategic location, near Israel’s major population centers and hubs of economic activity, combined with its substantial generation capacity, will bolster the resilience of the electricity sector and enable it to meet growing demand in the coming years."
Published by Globes, Israel business news - en.globes.co.il - on November 5, 2026.
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