Sources inform ''Globes'' that Israel Electric Corporation (IEC) (TASE: ELEC.B22) and Afcon Industries Ltd. (TASE: AFIN) signed an memorandum of understanding (MOU) a few days ago to jointly build wind farms in the Lower Galilee.
IEC will design the wind farms and obtain the statutory licenses for them, and Afcon will be the chief contractor that will build them. Afcon has an option to operate them. IEC's participation in the project is conditional on Afcon subsidiary Afcon EB Wind Energy Ltd. obtaining the licenses and building permits for the wind farms.
The wind turbines will be built at Ramat Sirin and on Mount Gilboa at an estimated cost of $70-80 million, and will produce 40-50 megawatts of electricity.
Afcon has already agreed in principle with Maaleh Gilboa, Degania, Beit Zera, and other kibbutzim for the construction of wind turbines on their land. However, it will take a long time to obtain Israel Land Administration (ILA) permits to use the land for this purpose.
The Public Utilities Authority (Electricity) has not yet completed regulations for the positioning of wind turbines, which is liable to delay bank funding for the project. In the meantime, Afcon is due to apply to the Public Utilities Authority for a condition license to build the wind farm.
Afcon has in the past declined to comment on the subject. IEC previously said, "The company cannot provide details about commercial agreements with its customers."
Shlomo Shmetzer controls Afcon through S. Shlomo Holdings Ltd. (TASE:SHLD). Afcon Industries owns 51% of Afcon EB Wind Energy, and Afcon EB Wind Energy general manager Eli Ben-Dov, a former IEC executive, owns 49%. Motorola Inc. (NYSE: MOT) owns 9% of Afcon Industries.
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2009
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