Generation Capital (TASE: GNRS) has completed the purchase of the Ashdod desalination plant together with Shapir Engineering and Industry (TASE: SPEN) for NIS 870 million. The seller, national water company Mekorot, reports that NIS 312 million of the consideration will be transferred to the state.
<p>GES, a subsidiary of Generation Capital, and Shapir Engineering plan extensive development of the plant. A week ago, Generation Capital announced financial closing for the deal. A consortium led by Mizrahi Tefahot Bank and insurance group The Phoenix Holdings will lend GES NIS 2.7 billion for the purchase and renovation of the desalination plant and the construction of a power plant.
<p>The Ashdod desalination plant has a maximum production capacity of 140 million cubic meters of water, and a franchise to produce 100 cubic meters annually under a franchise agreement that ends in 2038. The buyers of the plant intend to renovate the plant, among other things replacing the seawater pre-treatment system and the control system.
<p>In addition, a power plant will be constructed on the site that will supply all the desalination plant’s energy needs more cheaply than at present. Surplus power will be sold to the national power grid.
<p>The completion of the sale has symbolic significance. The five main desalination plants in Israel, supplying 80% of the country’s drinking water, are now in private hands. Two further plants are due to be constructed by 2024. The tenders for them have already been published by the Ministry of Finance.
<p><i>Published by Globes, Israel business news – <a href=”https://en.globes.co.il”>en.globes.co.il</a> – on August 29, 2022.</i></p>
<p><i>© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.</i></p>
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