Dorad Energy Ltd. yesterday secured the financing for Israel's largest private power plant. The agreement was signed at Bank Hapoalim's (TASE: POLI) headquarters in Tel Aviv. Dorad will build an 850-megawatt power station on land in Ashkelon owned by Eilat Ashkelon Pipeline Company Ltd. (EAPC) at an estimated cost of NIS 4.5 billion. When the power plant comes on line in 2013, it will supply 8% of Israel's energy needs.
The funding syndicate, led by Bank Hapoalim, comprises banks and financial institutions in equal shares. The banks are Bank Hapoalim, Bank Leumi (TASE: LUMI), Israel Discount Bank (TASE: DSCT), Mizrahi Tefahot Bank (TASE:MZTF), and First International Bank of Israel (TASE: FTIN). The financial institutions, organized by Clal Credit and Financing are Migdal Insurance and Financial Holdings Ltd. (TASE: MGDL), Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS), Menorah Mivtachim Holdings Ltd. (TASE: MORA), Excellence Investments Ltd. (TASE: EXCE), and Amitim (the eight nationalized old pension funds).
The signing of the financial agreement is an important milestone for Israel's energy market. Dorad is the first company to reach the stage of project financing with a financial syndicate for the construction of a private power station.
Dorad obtained a license for the power plant in 2004 and signed power purchasing agreements with Mekorot National Water Company and the Ministry of Defense.
Dorad is owned by EAPC (37.5%), project contractor, Turkish conglomerate Zorlu Industrial and Energy Holding AS (25%), Adeltech Ltd. unit Adelcom Ltd. (18.75%) and Uri Dori Engineering Works Corp. (TASE: DORI) unit U. Dori Energy Infrastructures Ltd. (18.75%).
The Public Utilities Authority (Electricity), which has advised the project from the beginning, said, "We are at the dawn of a new era in the energy market, and we will do whatever necessary for the momentum to continue."
The syndicate provided financing for 20 years, including the three-year construction period and 17 years of operations.
Published by Globes [online], Israel business news - www.globes-online.com - on November 30, 2010
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