Sources inform ''Globes'' that private power company Dorad Energy Ltd. recently asked the Government Companies Authority to allow Israel Electric Corporation (IEC) (TASE: ELEC.B22) to sign a contract to buy electricity from the power station that Dorad is building south of Ashkelon.
Dorad is seeking to shorten procedures in order to facilitate the securing of financing from banks and institutional investors. Dorad approached the Government Companies Authority before the publication of regulations for private power producers. However, the Government Companies Authority rejected the request for an early permit for a contract, saying that IEC should contact the Government Companies Authority for permission for a contract, not the other way round.
Dorad made the decision to approach the Government Companies Authority after it reached a draft agreement with IEC, which was sent to the Government Companies Authority for approval.
Dorad's financial model assumes that it will sell 60% of electricity to the national grid (i.e. IEC), and sell 40% to private customers. The power purchase agreement (PPA) between Dorad and IEC will likely be one of the largest in the market, amounting to NIS 1 billion a year.
Dorad's shareholders are Eilat Ashkelon Pipeline Company Ltd., with a 37.5% stake, Gazit-Globe Ltd. (TASE: GLOB) unit Uri Dori Engineering Works Corp. (TASE: DORI) (18.75%), Edeltech Holding Ltd. (18.75%), and Turkey's Zorlu Industrial and Powerplants Construction Co. Inc. (25%).
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2009
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