PHOTO
JERUSALEM - Israel's Dalia Energy said on Thursday it had signed an agreement for 5.3 billion shekels ($1.5 billion) from Bank Hapoalim POLI.TA to finance construction of a new power plant.
The non-binding deal is aimed at funding the new plant that will have a capacity of 850 megawatts on the site of the current Eshol power station in the southern city of Ashdod.
It will receive about 0.065 shekel per kilowatt hour for 20 years that begins upon its operation.
Last year, as part of a structural reform, Dalia purchased the Eshkol power plant in Ashdod from state-run Israel Electric Corp ISECO.UL. It operates two gas turbines and four steam units that generate electricity from natural gas.
The new plant will be named "Avshal" in memory of Avshalom Haran, 65, a founding director of Dalia who was killed by Palestinian militant group Hamas during the Oct. 7, 2023 attack on Israel.
Construction of the Avshal plant will be carried out in parallel with the "Dalia 2" power plant that also will have a capacity of 850 megawatts.
"Dalia, will strengthen - with the establishment of the Avshal power plant - its position as an important electricity producer for the economy and will provide a response to the growing energy needs of Israel while expanding competition in the electricity sector for the benefit of the public," said Dalia chief executive Oved Debi.
He added that to encourage more financing in the sector, the state must promote regulation "that will allow certainty regarding the ability to repay the debt alongside a proper and fair return for the owners ... and release the bottlenecks that exist in the supply of stations in the economy."
Itamar Furman, head of Hapoalim's corporate banking, said the bank seeks to lead financing for major infrastructure projects that will lead to a "greener future and increased competition in the electricity market".
"This is a significant step towards energy independence and environmental sustainability," he said.
($1 = 3.6208 shekels)
(Reporting by Steven Scheer; editing by David Evans)