Unlike most Israeli businesspeople, who in recent years have favored staying as far away from the media as possible, it was actually easy to snag Yosef Abramowitz for an interview. This attribute is just one among a list of Abramowitz’s qualities relating to his professional background, family, openness and certainly in how he runs his business, which deviate from the norm among his peers.
Abramowitz, who immigrated to Israel from the US seven years ago, resides in Jerusalem’s Baka neighborhood with his wife, Rabbi Susan Silverman, and his five children, two of whom are adopted from the Israeli-Ethiopian community. My request for an interview was answered immediately with an invitation to come “get to know my family” and “meet people.” It emerged that every Saturday from early afternoon until three in the morning - “Then he goes to sleep,” laughs one of his daughters - the Abramowitz-Silvermans welcome friends and acquaintances to their home. On this particular Saturday, the guest list included friends from Abramowitz’s activist days with whom he demonstrated alongside demanding the release of Soviet Prisoners of Zion, against South African apartheid, in support of immigration to Israel of the Ethiopian community, and the list goes on.
In addition to Abramowitz, two of this group now live in Israel and own businesses: Yaakov Ner-David is an entrepreneur and co-manages Jerusalem Capital, which chalked up an exit with Delta Three (a startup that developed Internet-based telephony), and today is a partner in the startup Zula, engaged in group communications; as well as a Jezreel Valley winery at Hanaton). Eli Wurtman (shown beside Ner-David), a former partner in Erel Margalit-founded JVP, moved to Benchmark Capital and started the Bat Shlomo Winery. Wurtman and Ner-David, Abramowitz tells me, are the ones who convinced him to move to Israel and engage in entrepreneurship, explaining to him that the skills he had acquired as an activist are those needed to be a successful entrepreneur.
What exactly is the similarity between the two? Abramowitz explains that just as with social justice struggles, as an entrepreneur he exerts pressures on figures in the establishment, except now his motivation is to obtain permits for his energy projects, whether those in Israel with Arava Power Company (which he co-founded, served as president, and today serves on its board of directors and has a minor controlling interest); as president and shareholder of Gigawatt Global (which does business in Israel via Energiya Global of which Abramowitz is a controlling shareholder and serves as CEO); or advancing solar energy projects worldwide, the first of which, located in Rwanda, is slated to be connected to the Rwandan electricity grid this summer.
“I fought the Soviets”
Energiya Global’s offices in Jerusalem’s Talpiot neighborhood are cavernous and colorful, featuring rounded armchairs reminiscent of seating in Google’s headquarters. Photos of Abramowitz from his social activist days grace the walls, along with the Rwandan orphanage adjacent to where Abramowitz’s first solar field outside Israel is located, and the requisite giant world map with colored pins marking Dutch parent company Gigawatt Global’s projects around the globe. An outer area houses a vegetarian snack-bar as well as a washing machine “to launder the dishtowels. We’re green,” explained an Energiya Global partner.
The sun’s rays struck Abramowitz in full force when he arrived as a new immigrant to the desert community of Kibbutz Ketura in the searing heat of August 2006. He and wife Rabbi Silverman had just completed the adoption process of their second son, a response to their older son’s wish for a brother who “looks like him.” “Mainly we were looking for quiet,” Abramowitz said, explaining his unconventional choice of locales.
But the quiet they sought was short-lived. “The very first morning in the Arava, I realized how much sunshine there is, and I just couldn’t believe that Ketura wasn’t doing something with it,” Abramowitz recalled. “By day two, I ascertained that no one in the entire Arava or Negev had made moves in the direction of solar power and by day three I realized that no one in the entire country was doing so.”
Abramowitz enlisted Ketura member and businessman Ed Hofland in the solar campaign. Abramowitz had been in charge of the catering at Hofland’s wedding in 1983, when Abramowitz spent time at Ketura as a volunteer. Since then, Hofland oversaw the founding of several Southern companies, including Algatechnologies and Ardag.
Another partner was David Rosenblatt, a New York businessman who Abramowitz did not know, but like Abramowitz, had been a member of Young Judaea in his youth. Abramowitz explained the significance of the link: “We immigrants don’t have the networking that Israelis have from school and the army. Instead, we rely on our youth movement contacts.”
At the time, not only was there not a single solar field in Israel, but no permits for building them were even issued. “No one even knew where to inquire,” said Abramowitz. “It was both complex and costly. Al Gore believed that the cost would drop, and I believed him. I’ll give you an example: Our first business model stated that the price per installed megawatt was $8 million. When we built our first field at Ketura, it had dropped to $4.8 million per megawatt, and today it’s $2 million per megawatt. We were lucky - we got organized just as the prices were falling. When producing electricity was still cost-effective, we were poised to move.”
Yet the business environment was very skeptical. “They told me, ‘You’re a naive American, a kibbutznik. You won’t win this war.’ There was no way I was accepting that. I fought the Soviets, I was an expert at getting Jews released from Soviet prisons and helping them reach Israel. So I told the naysayers, ‘We triumphed over the KGB; we can’t manage to change a few Israeli laws?’ The Israelis thought I was crazy. We had to do battle with no fewer than 24 government agencies. It was awful. I thought it would take six months, and only when the six months were over with did Susan and I realize what a long trek it was going to be.”
How long, exactly?
“Five years of struggle.”
Did you consider giving up?
“I believed that ultimately Israel would do the right thing. Fortunately for me, I had smart partners. They took care of the business end, and my job was to lobby the relevant government agencies.”
Because of your social activism experience?
“Exactly. It really is similar. My social activism history worked in my favor. What? We can help thousands of Jews make aliya, but we can’t make solar energy happen? I had both the naiveté and the social activism in my toolkit. Together, they combined in a way that Kibbutz Ketura and David Rosenblatt recognized, and thank goodness we succeeded.”
Is it any easier to work in Africa?
“Our first round of raising capital (for Arava Power) was among friends and family, in the U.S Here in Israel, we came up empty,” recalls Abramowitz, despite having asked for only $25,000-$50,000 from each investor. Everyone was cynical.
Having no alternative, Abramowitz crossed the Atlantic four times to conduct rounds of raising capital, which yielded $3 million. A significant turning point occurred in 2009 when Siemens invested $15 million in the venture. JNF subsequently invested $3 million, and Bank Hapoalim (TASE: POLI) extended an NIS 80 million loan for the first field. Today, $300 Million is invested in Arava Power, raised from 120 investors. The controlling shares were divided between Siemens (40%), JNF (10%), and Abramowitz, Rosenblatt, Ketura, and a group of Jewish-American investors, each having a few shares respectively. “They’re all quite pleased today,” Abramowitz said. “Arava Power had modest value, and now it’s less modest.” Abramowitz prefers not to name the value explicitly, but estimates put it at tens of millions of dollars.”
OK, but that’s on paper. Usually, investors are pleased when they get their dividends or when their stocks jump in value.
“At the beginning of next year, we anticipate dividends, and naturally the company's value increases every time we throw another switch.”
Have you considered an IPO?
“I’m not making any commitments, but I will say that Ed Hofland (today chairman of Arava Power) and David Rosenblatt (deputy chairman), along with the team, are checking out many options of how to move forward in such a way as to benefit our investors. They know what they’re doing. I know how to zero in on a market very early - sometimes even before the market knows it’s a market - and how to develop it. But it was and is hard work, as we don’t have a horizon today for future fields.”
And why is that?
“While Arava Power has nearly 50 projects in the pipeline on which we’ve signed, on a total scale of a billion dollars, solar quotas have not yet been issued. I’m talking about 50 property owners: kibbutzim, moshavim, Bedouin tribes - but the state still doesn’t have a framework for issuing licenses for them. And that’s unacceptable. We played by the rules, and the state is always changing the rules on us.”
How are you trying to change this?
“For example, the entire industry is built on a first-come, first-serve basis. Arava Power has a lot of money riding on our ability to set up many projects in a row. But now the state won’t guarantee that we can do so in the future. How can this be? Are we a banana republic, or a bona fide country? In Africa, they decide something, and they do it. In Israel, we manufacture uncertainty. That’s why only 2% of our energy is renewable. It’s disgraceful.”
And in Western Europe, for comparison’s sake?
They have a target of 20% by 2020. Germany and others have already reached it. Israel’s target for 2020 is 10%.
Today Arava Power holds 23% of the solar permits in Israel, and is the largest of the permit-holding developers. It’s a signatory to an agreement to supply energy to the Israel Electric Corporation (IEC) (TASE: ELEC.B22) with a 20-year commitment. The price paid for electricity has fallen, along with the cost of solar panels. In the beginning, the electricity regulator agreed to pay NIS 1.50 per kilowatt-hour, and then it went down to NIS 1 and now a lot less. The Ketura field supplies five megawatts. The fields at Yotvata, Grofìt, Eliphaz, Maslul, and Shoval, all slated to link up to the electricity grid in two months, will together supply an additional 35.5 megawatts.
Weren’t there problems with the Israel Electric Corporation?
“They need a lot of energy; they weren’t the obstacle. The obstacle is on the regulatory side. There’s no horizon for entrepreneurs and investors, and that’s a serious problem. I must add that our difficulties here toughened us up to face the world market. When we look at Africa, and everyone’s saying ‘Impossible,’ we tell them, ‘Compared to Israel, it’s a piece of cake.’”
It’s really that easy?
“The risks differ, but because of our success in Israel, we’ve learned how to deal with nearly every obstacle and how to reduce risk. We brought to Africa everything we learned from our struggles in Israel, and we saw that we have an edge, and thank goodness, we’re continuing the dream.”
Orphanage in Rwanda
The dream is coming true in Rwanda, where in a few months Gigawatt Global’s solar field at the Agahozo-Shalom Youth VIllage will be connected to the country’s grid at a cost of NIS 85 million. The field will supply 8.5 megawatts, or 8% of Rwanda’s generation capacity. Further investments in Africa are planned worth a billion shekels.
“The best investors in the world are funding it,” said Abramowitz proudly, among them the US government (as part of an Obama-backed African aid program), which invested the relatively modest sum of $400,000. A comparable amount was invested by the European Union through a similar program, in addition to other socially-oriented business entities: Norwegian development finance institution Norfund, Norwegian-headquartered Scatec Solar, Dutch development bank FMO and the Emerging Africa Infrastructure Fund (EAIF).
“When we began building the field at Ketura, various entrepreneurs and government representatives approached us and asked us to help them launch similar projects. Over two years, we checked out 75 countries. I don’t believe there’s another company in the world that’s carried out such thorough studies. We wanted to understand whether we had an edge outside Israel.”
The choice of Agahozo-Shalom was not coincidental. The late Anne Heyman, who had been a Young Judaea friend of Abramowitz, worked from 2006 until her recent death raising money for the orphanage, which she founded against the backdrop of the genocide in Rwanda in 1994. At a certain stage, Heyman proposed that Abramowitz use Agahozo-Shalom’s land for a renewable energy project so that the village could earn some money from renting the land for a solar field.
In the division of labor between Energiya Global and Gigawatt Global, it is Energiya Global that raises seed capital and conducts feasibility testing for Gigawatt Global, which finances and builds the fields. The Rwanda project is headed by Chaim Motzen, a partner in Gigawatt Global and a graduate of Harvard Business School, as well as an African project veteran. Motzen related that when he joined forces with Abramowitz, the idea was for him to look for opportunities in Africa. In doing so, Motzen evaluated seven or eight countries.
“A few reasons. First, they need the energy.” said Motzen. “Today they have 113 megawatts divided by a population of 11 million. In contrast, Israel has 13,000 megawatts divided by a population of 8 million. Only 18% of Rwandans even have electricity. Secondly, half of Rwanda’s energy is produced from diesel, which is both costly and pollutes. Thirdly, Rwanda is business-friendly. We deal with honest, professional people and we found good partners there.”
The process began moving at a rapid, distinctly non-Israeli pace. Motzen went to Rwanda in March 2012, and at the end of that year he submitted a feasibility study to the Rwandan government. In January 2013, the Rwandans approved the plan and last summer an agreement was signed committing the Rwandan government to purchase the Gigawatt Global-produced electricity for 25 years. The field is under construction and is scheduled to be connected to the electricity grid this summer.
“Our advantage is in our being the first,” Abramowitz explained. “We’re staking a claim in East Africa, West Africa, South Africa and in various islands around the world. The same holds true with Arava Power. We were first. Others learned from us and came in [a reference to Shikun U’Binui and Paz Solar, who followed Arava Power with projects of their own]. Now we have to move quickly in order to build in other locations in Africa, before others come in and do so.”
Abramowitz recently returned from a conference hosted by billionaire Richard Branson on his Caribbean island estate in which 10 heads of state attended. Energiya Global committed to investing $50 million in solar energy in the Caribbean. “The petroleum, gas and coal companies write the rules of the energy game and profit from them,” said Abramowitz. “They produce electricity, but they destroy the planet in the process. So we come in with a productive, natural technology and show that there’s a better way. What Google did for the search engine, we’re doing for solar energy.”
Activism is his middle name
Abramowitz, 50, was born in New York. When he was five, his parents moved to Israel. Then in 1972, when he was eight, they moved to Boston. After earning a master’s degree at Columbia University, Abramowitz gravitated toward social activism. As part of his opposition to apartheid, he met Susan, a New Hampshire native and sister of comedian Sarah Silverman, who’s also an investor in Abramowitz’s energy ventures. Through his sister-in-law, Abramowitz met with President Shimon Peres, who “is quite fond of Sarah”. Incidentally, another of Abramowitz’s investors is actress Keren Mor.
In the years preceding his move to Israel, Abramowitz earned a living from a multimedia company that built Jewish-themed websites, among them MyJewishLearning.com for the late Edgar Bronfman, as well as the site for Birthright, which Bronfman’s brother Charles founded together with Michael Steinhardt. Susan served as rabbi of a congregation and after moving to Israel, she joined Women of the Wall and was among the leaders of its struggle for equal worship rights at Judaism’s holiest site, which led to her arrest last year. The family likes to talk about Susan being named the not-so-clergy-appropriate title of one of the World’s 10 Sexiest Rabbis by a Jewish-oriented website Jewrotica.
In 1998, after Israel announced that it would no longer accept Ethiopian Jews, Abramowitz flew to Ethiopia and organized a mass group photograph of Jews to demonstrate how many were waiting to make aliya. In the wake of that photo, Israel reopened its gates. Amid the backdrop of his struggle on behalf of the Ethiopian Jews, and after becoming the biological parents of their two older daughters, Yosef and Susan decided to adopt an Ethiopian child. “When you visit a country like Ethiopia, you see poverty, you see need. So adopting an Ethiopian child was the natural decision.”
Rewinding to Abramowitz’s activist days, in the 1980s his struggles were mostly on behalf of Soviet Jewry, including demonstrations simultaneously organized by Abramowitz in 23 countries to “Let My People Go.” Abramowitz himself demonstrated in Washington D.C. and was even arrested. During this period, he also went on a two-week hunger strike in solidarity with Prisoner of Zion Alexei Magarik, who was released in September 1987.
Next, Abramowitz led the struggle to bring the remaining Ethiopian Jewish community to Israel. Among other accomplishments of note, he collected 35,000 signatures on a petition and submitted it to the Ethiopian Vice President at the time.
At the beginning of the 1990s, Abramowitz was active on behalf of aliya of the remaining Yemenite community. In the mid-1990s, he went back to working on behalf of the Ethiopian community, including pressuring the Israeli government to bring them to Israel. He’s also proud of his opposition to South African apartheid, which included organizing boycotts and protests.
The Better Place debacle
In 2012, despite the honor of CNN naming Abramowitz one of six global Green Pioneers, his efforts to break through the “green ceiling” by purchasing bankrupt electric vehicle venture Better Place failed. For the purposes of the purchase, Abramowitz formed Green EV with the Association of Electric Car Owners, which after Better Place’s liquidation won receivership of Better Place, and even managed it for a short time. Ultimately, though, the courts closed the business due to non-transfer of monies owed by Green EV. Green EV’s investors then filed suit against the special managers of Better Place.
“It was my first failure in 30 years,” said Abramowitz, claiming that the liquidators violated the agreements and are obligated to refund all the monies transferred. “If the court rules in my favor, and compels the vehicle owners to pay what they owe (for changing and charging batteries during the period that Sunrise was in charge of Better Place’s dealings), I’ll be a free man. I was the green Zionist sucker who got into it not for the profits, but rather to help the electric car drivers.”
So what happened?
“I know how to raise capital for good, pioneering green business. I proved myself in Arava Power, and I came through in Africa. I succeed when I have a reliable, professional, supportive governmental partner. I had investors for Better Place, but it was conditional upon one thing: that we get all of Better Place’s assets. As far as I was concerned, it was a mission, a calling, and I also committed to donating any profits I might accrue to environmental protection causes. I had investors whose investments were conditioned upon our getting all of the assets.
“Every time we went to pick up our cars at the port - 350 vehicles - the Transport Ministry stopped us. The investors began to get suspicious, then the liquidators asked for money as per the promised payment schedule. I had the investors, but they said they’d put down the money when we received the cars. Then the liquidators went to court, blew the top off the whole thing, and forfeited the best offer they’d ever get, a deal that would have covered the debts of many of the creditors. Ultimately, they got mere pennies to pay the creditors, to Israel’s disgrace.”
The Central District Court in Lod rejected Abramowitz’s claim and permitted the special managers to distribute the guarantees given by Green EV to the deal. Judge Ilan Shiloh ruled that special managers’ attorneys Shaul Kottler and Sigal Rosen-Rechev worked intensively to aid the company in releasing the cars, yet it was Green EV that failed to handle their release and the responsibility therefore was at its doorstep. In February, Abramowitz appealed to the High Court of Justice.
“What’s up with that?” Abramowitz exclaimed. “Who pays for assets not received? What happened is that the state wanted to kill off Better Place regardless of who owned it. And the state succeeded. I came here to restore Israel’s reputation in cleantech - and it could have happened - but meanwhile they killed Better Place. What? Abramowitz doesn’t know how to raise capital? Can’t raise NIS 25 million for Better Place? We raised NIS 85 million for our project in Africa. When I have a partner, a reliable, professional country working with me, I can raise capital. I admire the Rwandan government’s professionalism far more than the amateurishness of ours regarding Better Place.”
But despite the amateurishness, you’re staying and continuing to do business.
“At the end of the day, I’m a Zionist. It’s important to me that here, in Jerusalem, we help the investors profit. I look for four bottom lines: One - investors. Our investors are very smart. Two - humanitarian social values. Three - environmental values. Four - boosting Israel’s reputation. And it’s beautiful when we succeed.”
Wants to be president
The public struggles waged by Abramowitz began in his student days in Boston, in the mid-1980s, after being elected chair of the World Union of Jewish Students and leading it in various struggles. Today, though no longer involved directly in activism, Abramowitz says the next position he wants - despite its being apolitical - is to be President of Israel.
President? Isn’t that a long shot?
“There’s a huge gap between the expectations of Israelis and the Jewish World and what we look for in a President. I fear that someone else similar to Moshe Katzav will come along. Great thanks to Shimon Peres, who restored honor to the position. My friends believe there’s room for changing the public discourse through the Presidency.”
Published by Globes [online], Israel business news - www.globes-online.com - on May 25, 2014
© Copyright of Globes Publisher Itonut (1983) Ltd. 2014