The Israel Electric Corporation (IEC) canceled the tender for the Eshkol Power Plant and announced the pricing procedure. Last month, Eshkol Power Energies, a consortium of Dalia Energy (TASE: DALIA) and Ta’avura companies, won the bidding with a whopping NIS 12.4 billion bid, far more than the NIS 7 billion bid from OPC Energy (TASE: OPCE)-fund Noy. IEC confiscates NIS 100 million guarantees provided by the tender winners.
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But the bid winners were unable to obtain financing for the project and Ta’avura left the consortium. Dalia reduced her offer to 9 billion shekels and said she would increase her guarantees to 200 million shekels.
The IEC now says that pricing procedures will start at NIS 9 billion. The IEC’s tender committee’s decision stems, in part, from an understanding that agreeing to negotiate with Dalia alone could be problematic and not pass the court test — especially when the OPC-Noy Fund consortium, as first reported by the Globes, plans to petition for a restraining order. However, as of now, canceling the tender may not be enough to prevent the petition.
The Eshkol power plant is the largest in Israel that runs on natural gas, with an installed capacity of 1,693 MW. Among the most important IEC power plants to undergo privatization, after selling the Ramat Hovav and Hagit East power plants to Shikun & Binui and Edeltech for NIS 4.25 billion and NIS 1.6 billion, respectively, and the Alon Tavor plant, which was sold for NIS 1.9 billion to the MRC Group.
The fifth is the Reading Power Station in Tel Aviv, which is awaiting a government decision on its future.
The Eshkol Power Station site covers 440 dunams (110 acres) of privately owned land, sufficient for major development, including the construction of the planned Eshkol Power Station II and extensive energy storage capacity. Moreover, following the government’s decision to promote a submarine power cable along the coast from Ashkelon to Tel Aviv, the Eshkol Power Station has great potential.
Published by Globes, Israel business news – en.globes.co.il – on July 19, 2023.
© Copyright Globes Publisher Itonut (1983) Ltd., 2023.
