Israel Electric Corp. (IEC) has canceled the Eshkol Power station tender and announced a pricing procedure. Last month Eshkol Power Energies, a consortium of Dalia Energy Companies (TASE: DALIA) and Ta’avura won the tender with a huge bid of NIS 12.4 billion, far more than the NIS 7 billion bid by under-bidder OPC Energy (TASE: OPCE) – Noy Fund. IEC is confiscating the NIS 100 million guarantees put up by the tender winners.
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But the tender winners were unable to obtain financing for the project and Ta’avura left the consortium. Dalia lowered its bid to NIS 9 billion and said it would increase its guarantees to NIS 200 million.
IEC now says that the pricing procedure will begin at NIS 9 billion. The decision by the IEC’s Tenders Committee stems, in part, from the understanding that agreeing to negotiate with Dalia alone could be problematic and not pass the court’s test – especially when, as first published by Globes, the OPC-Noy Fund consortium plans petitioning for a restraining order. However, even now, simply canceling the tender may not be enough to prevent the petition.
The Eshkol power station is the largest in Israel fueled by natural gas, with an installed capacity of 1,693 megawatts. It is the most important of the IEC power stations to undergo privatization, after the sales of the Ramat Hovav and Hagit East plants to Shikun & Binui and Edeltech for NIS 4.25 billion and NIS 1.6 billion respectively, and of the Alon Tavor plant, sold for NIS 1.9 billion to the MRC group.
The fifth is the Reading power station in Tel Aviv, which awaits a government decision on its future.
The Eshkol power station site covers 440 dunams (110 acres) of privately-owned land, sufficient for considerable development, including construction of the planned Eshkol 2 power plant and extensive energy storage capacity. Moreover, after the government’s decision to promote a maritime 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 of Globes Publisher Itonut (1983) Ltd., 2023.
