Clal to invest NIS 252m in Meshek Energy upon winning the Eshkol power plant tender

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Meshek Energy – Renewable Energies Ltd. announced on Sunday that it has signed an agreement with Clal Insurance Ltd. for an investment of up to NIS 252 million in exchange for an equity stake of 9.49% subject to winning the tender for the purchase of the Eshkol power plant.

The deal comes after the closing last week of bids for the Israel Electric Corporation’s tender for the purchase of the Ashdod-based Eshkol power plant.

Meshek Energy’s subsidiary Dalia Power Energies is said to be offering to buy Israel’s third-largest power plant for NIS 10 billion as part of the bid it submitted at the end of May, Calcalist reported last week. The other participants are said to have made lower bids. The disclosure of bids by the IEC is expected in coming weeks.

Dalia Power Energies operates Israel’s largest private power station, Dalia, located east of Kiryat Malachi in the south. It supplies about 10% of the total electricity produced in the country, according to its website, and is powered by natural gas from the offshore Tamar gas reservoir.

The Eshkol power plant, named after Israel’s third prime minister Levi Eshkol, is located in the industrial zone of Ashdod near the port, and has a total surface area of approximately 470,000 square meters. The plant was the first to be converted to run on natural gas for the production of electricity.

The tender by the IEC includes the acquisition of six power generation units, including gas turbines that operate using natural gas with a cumulative capacity of about 1,680 megawatts, and the possibility to construct additional capacity of 600 megawatts to 850 megawatts. The sale will be subject to approval by the Competition Authority and other regulatory approvals. Handover of the power station to the winner of the tender is expected by the end of the year.

Another bidder in the tender for the Eshkol plant is OPC Energy, a developer and operator of power generation facilities in Israel and US, which submitted a joint offer together with the Noy Fund, an Israeli infrastructure and energy investment. OPC’s portfolio in Israel consists of OPC Rotem, a 466 MW combined cycle power plant, in operation since July 2013, and OPC Hadera, a 148MW co-generation power plant, in operation since July 2020.

The Eshkol power station is being sold as part of the structural reform of Israel’s electricity sector announced in 2018 to encourage independent power producers to enter the market and boost competition as demand for electricity is growing. It is the fourth power station sold by the IEC to the private sector.

In 2021, a consortium led by Edeltech Energy & Infrastructure and Shikun & Binui Energy won the IEC tender for the Hagit power plant in a deal worth NIS 1.6 billion. The Alon Tavor power station was sold in December 2019 for NIS 1.9 billion and the Ramat Hovav power station was sold in June 2020 for NIS 4.26 billion.

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