Mizrahi Tefahot Bank (TASE:MZTF) and Deutsche Bank will lend NIS 960 million for the construction of two 73-megawatt power stations in northern Israel. The project will cost a total of NIS 1.23 billion. The power stations will be the first national infrastructure project with financing led by Mizrahi-Tefahot.
The project, owned by Denham Capital Management, Rapac Communication and Infrastructure Ltd. (TASE: RPAC), Adi Energy, and Gat Energy, involves the construction of two cogeneration power plants powered by natural gas (and diesel fuel as a secondary fuel) on the premises of the Nilit plant (in Ramat Gavriel) and the Tnuva Food Industries Ltd. plant (in Alon Tabor). These two plants will be the anchor customers for the power plants, which will also supply steam and electricity to nearby plants and more distant customers.
The project will operate on the build-operate-own model (BOO), meaning that after the relevant supporting arrangement for the plants expires, the power plants can continue operating, while selling the steam and electricity on the open market. Siemens will supply the turbines for the power plants, and will in effect serve as the chief construction contractor in the project. Other work will be carried out by Israeli company Menolead Herut Systems of the YSB Group. The project will be operated by a subsidiary of Spanish company Fenosa Natural Gas.
Sources inform "Globes" that Mizrahi-Tefahot and Deutsche Bank already began financing the project this week. They plan to include additional Israeli and overseas financial concerns in the financing for the project. Half of the financing will be through a dollar loan guaranteed by export insurance from Swedish company EKN, and half will be through a shekel loan guaranteed by the project's collateral. Mizrahi-Tefahot will be responsible for the shekel part of the loan, and Deutsche Bank for the dollar part.
Published by Globes [online], Israel business news - www.globes-online.com - on March 17, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016
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