Mekorot National Water Company subsidiary Mekorot Development and Initiations Ltd. has picked Bank Hapoalim (TASE: POLI) to head a syndicate that will provide NIS 1.5 billion for the Ashdod desalination plant. The plant will produce 100 million cubic meters of fresh water a year, beginning in 2012-13.
Talks are underway with the European Investment Bank (EIB) to join the syndicate.
Mekorot said that it picked Bank Hapoalim after an equitable competitive process that included Israeli and foreign banks, as well as financing institutions. The Ashdod desalination plant is one of the largest infrastructure projects being planned in Israel. The company believes that detailed financial agreements will be signed in March 2010.
The selection of Bank Hapoalim to head the syndicate and the launch of proceedings to secure the financing are milestones in the project. Mekorot plans to begin construction in April 2010 and wants the plant to come on line in 2012. Industry sources, however, believe that this timetable is not realistic.
Mekorot Development has set up a special project company to build and operate the Ashdod desalination plant. In February, the company published an international Engineering, Procurement and Construction (EPC) tender for the consortium that will build it under the turnkey method. The winning consortium will have an option to acquire up to 40% of the plant company.
Mekorot chairman Eli Ronen said, "Mekorot Development has again shown its determination, professionalism, and capability in moving forward on the Ashdod desalination plant. Despite the tight timetable agreed upon with the government, Mekorot will not miss the deadlines it has committed to, and in the plant will begin supplying water in 2012."
Published by Globes [online], Israel business news - www.globes-online.com - on September 1, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009