Gov't to offer NIS 400m in loans for alternative fuels

The Office of the Chief Scientist is planning a NIS 1.5 billion program to create a new alternative fuels industry.

The Office of the Chief Scientist has a new program of loans for industrial and financial companies to invest in R&D in alternative fuels for transportation. Under the plan, by 2020, investors in R&D in alternative fuels will receive NIS 400 million, with the first loans due to be granted in 2013.

Chief Scientist Avi Hasson says that the plan should encourage financial institutions and other investors to invest in setting up companies that will invent alternative fuels, in order to wean the world off oil. To get there, the Office of the Chief Scientist sees an opportunity to create a new and thriving industry, which will lead technological innovation and attract investors.

"NIS 400 million is enough money to give a big push for alternative fuels entrepreneurs. We want this measure to lead to the establishment here of a whole industry of companies, which will be a market that will be established and be sustained by many investors," Hasson told "Globes" today.

Prime Minister's Office Alternative Fuels Administration director Eyal Rosner said today that the plan was drawn up amid concerns that many financial organizations, including banks, hesitate to invest in renewable energy, mainly because these investments are seen as high risk.

A NIS 1.5 billion program

The minimum investment by an investor seeking to benefit from the government's program is NIS 1.5 million. In exchange for the investment, the government will provide the venture with a loan equal to half of the investment - NIS 750,000. If the venture succeeds, the investor can acquire, within six years from the date the loan was received, the government's share in the project, and repay the loan, or, alternatively, pay royalties to the government. If the venture fails, the investor will be exempt from repaying its proportionate share to the government. Under the plan, any investor can invest in several ventures at the same time, and benefit from the government loans.

The plan totals NIS 1.5 billion. NIS 500 million of this amount will be invested by the government in the next few years in basic research in alternative fuels, and the rest of the money will be allocated for promoting industrial R&D in the sector, to encourage the development of technologies and foster international collaborations.

Published by Globes [online], Israel business news - www.globes-online.com - on December 26, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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