The Yogev committee has advised against the partnership between the two national power companies.
The partnership between Israel Electric Corporation (IEC) (TASE: ELEC.B22) and France’s national Électricité de France (EDF) to establish new power plants in Ashkelon and in Alon Tavor has been frozen. The reason the partnership was frozen is the Yogev committee’s recommendation not to allow IEC to bring strategic partners into projects. IEC signed a memorandum of understanding (MOU) with EDF in December 2012, for a partnership in building power plants in Israel and in Europe. Following the signing of the MOU, senior representatives from both national companies visited each other, and another MOU was signed in November 2013. The French company, represented in Israel by Adv. Moshe Shahal, expressed interest in two large IEC projects: the dual-fuel power station (Project D) in Ashkelon, and the gas-powered plant planned in Alon Tavor. The idea behind the partnership is that IEC perform the building, and EDF provide the necessary funding for the initiatives. IEC hoped that the partnership between government companies would not require a tender.
However, based on the recommendations in the Yogev committee interim report, IEC will build the power station in Ashkelon independently, and will hold 100% of the ownership. The committee also recommends compelling IEC to sell the land for the Alon Tavor power station to the government, or to private entities. According to the Yogev committee, the sale of the land is necessary in order to strengthen IEC’s capital structure, in light of the massive NIS 70 billion debt it has accrued. EDF, the biggest energy company in the world, builds and operates nuclear power plants in France and in other European countries.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2014
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