UAE fund to invest $100m in clean energy in Israel

Solar energy field Kibbutz Katura

Abu Dhabi's Masdar fund and EDF Renewables Israel have signed a strategic cooperation investment agreement that could be expanded to hundreds of millions of dollars.

Abu Dhabi-based Masdar and Israel's EDF Renewables have signed a strategic cooperation agreement, which will see the renewable energy arm of the UAE investment fund Mubadala invest hundreds of millions of dollars in developing renewable energy projects in Israel. This will be the first major investment by the UAE in renewable energy in Israel.

As part of the agreement, Masdar will become the strategic partner of EDF Renewables Israel, a subsidiary of the French utility giant EDF, which already operates 18 solar energy projects in Israel. According to market estimates, the initial investment will be $100 million and this amount will likely grow over the years depending on the number of projects launched.

Mubadala is one of the biggest sovereign investment funds in the world with an estimated $250 billion under management. The fund's income derives from the UAE's oil revenues and is connected to Crown Prince Mohammed bin Zayed Al Nahyan, who was a main architect of the Abraham Accords signed by Israel and the UAE last year. The fund is an active player on the global investment market with an emphasis on technological ventures.

EDF Renewables began operating in Israel in 2010 and has so far invested NIS 3 billion in building solar energy fields, which supply 383 megawatt to the national grid. Production is set to rise to 500 megawatt. EDF will remain in control of the projects.

The strategic cooperation between EDF Renewables and Masdar will include the Abu Dhabi investment fund's entry into existing projects as well as future projects under tenders issued by the State of Israel.

EDF Renewables Israel recently won tenders for projects as part of quotas for electrical installations with storage capabilities that were issued by the Israel Electrical Utilities Authority at a tariff of NIS 17.45 KWh. The venture's backlog of orders in the development stage requires an overall investment by the company in Israel of NIS 5 billion.

The recent electricity tariffs that EDF Renewables Israel committed to were 50% lower than the electricity produced by power plants operated by gas. So for example at the Ashelim 2 project in the Negev, EDF Renewables Israel will produce electricity for NIS 0.08 KWh (not including storage and not including government incentives).

EDF Renewables Israel CEO Ayalon Vaniche told "Globes," "The company is proud to establish the first collaboration in the field of energy between the UAE and Israel. We will work together to improve the performance of the projects already operating in Israel and we will expand the scale of our activities in the field of floating solar energy systems, storage, solar energy technologies combined with agriculture, wind turbines as well as promoting other innovative technologies."

The connection between the companies was made by other collaborations between Masdar and EDF subsidiaries operating around the world. Masdar and EDF are already partners in similar projects in the Middle East and North Africa including the Al Dhafra project in the UAE, which will be the world's largest solar energy field with a 2,000 megawatt capacity. The companies are also cooperating on the third stage of the Mohamed bin Rashid Al Maktoum solar energy park in Dubai, which will generate 800 megawatt and the Dumat al Jandal wind farm in Saudi Arabia, the largest such project in the Middle East, which will produce 400 megawatt. Masdar and EDF Renewables are also partners in eight renewable energy projects in the US.

The collaboration between Masdar and EDF Renewables Israel was signed by Masdar CEO Mohamed Jameel Al Ramahi and EDF Renewables Group Senior Executive president Bruno Bensasson.

The Israeli government's declared target is to produce 30% of its energy needs from renewable energy by 2030, 13% up from the previous target. At the same time use of coal will be reduced. In order to meet this target, Israel will need to produce another 15 gigawatt of clean energy by 2030.

Masdar CEO Mohamed Jameel Al Ramahi said, "The UAE and Israel are opening a new era of cooperation in renewable energy and advanced technology, which will benefit both peoples and support our targets for clean energy. The State of Israel is known in the business environment for supporting this sector and we are delighted to work in cooperation with EDF Renewables Israel to develop solutions that will move forward the shift to new energy."

EDF Renewables Group Senior Executive president Bruno Bensasson said, "Israel is a country with long term significant potential and which we see as an incubator for many innovations in the field of renewable energy. This agreement will also create synergy between the various subsidiaries of the EDF Group operating in the countries of the region."

Published by Globes, Israel business news - en.globes.co.il - on January 21, 2021

© Copyright of Globes Publisher Itonut (1983) Ltd. 2021

Solar energy field Kibbutz Katura
Solar energy field Kibbutz Katura
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