Millennium Electric T.O.U Ltd., which specializes in the construction of photovoltaic-based solar power stations and the supply of solar paneling to private and commercial customers, has signed a contract with Korean entrepreneur Moon S. Kim, president of High Quality Marketing & Consulting (HQMC), a member of The Kore Group, Inc., for the construction of a power station at a cost of $150 million. The new station is expected to have a 120 megawatt production capacity. HQMC has already constructed a similar power station in Korea with a 117 megawatt capacity, at a cost of $125 million.
Under Korean law, contracts for electricity sales are for 15 year periods. Millennium Electric CEO Ami Elazari said, “We will construct the power station and manufacture the paneling for HQMC, and will receive a license from the Korean electricity corporation to sell electricity for 15 years. Once the station is up and running, the electricity will be sold to the local Korean grid at a price of 716 won per kWh, ($0.60 per kWh).” By comparison, the average price of electricity in Israel is around $0.08 per kWh, which means that electricity production using photovoltaic technology is very costly, and is subsidized by the government. “By definition, part of our task is to be partners in every station we construct worldwide,” added Elazari. “We aim to set up joint ventures with local companies, so that we can also benefit from long-term electricity sales.”
Under its agreement with HQMC, Millennium will construct the power station and supply the paneling while HQMC will be responsible for obtaining the requisite licensing from the Korean authorities and finding an investment bank that will raise the funds needed for construction. HQMC operated in a similar fashion when it constructed the previous power station.
As regards the timeline for launching the project, Elazari said that the construction permits would be obtained within six months, following which construction of the power station would be completed within three years. He added that he expects the construction project to generate tens of millions of dollars in revenue, and annual electricity sales, once the station is operational, of $9.5 million for 15 years.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2006
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