Israel Electric sells Eshkol power plant to private group for over NIS 12 billion

Sale of power plant is part of electricity sector reform to boost competition; Energy Minister Katz says part of proceeds will be used to lower electricity prices

Sharon Wrobel is a tech reporter for The Times of Israel.

Eshkol power plant, Israel's largest natural gas powered plant, near the port of Ashdod. (Courtesy)
Eshkol power plant, Israel's largest natural gas powered plant, near the port of Ashdod. (Courtesy)

Eshkol Power ENergies group, a private consortium of partners Dalia Power Energies and Taavura, has won the tender for the purchase of the Ashdod-based Eshkol power plant after submitting the highest bid of more than NIS 12 billion ($3.37 billion).

The Eshkol power station, the country’s largest plant fueled by natural gas and having a capacity of 1,680 megawatts, is being sold by the Israeli government as part of the structural reform of the electricity sector announced in 2018. The reform aims to encourage independent power producers to enter the market and boost competition as demand for electricity is growing. It is the fourth power station sold by state-owned Israel Electric Corporation to the private sector of the five earmarked for divestment as part of the reform.

The Eshkol Power ENergies group’s NIS 12,375,425,555 bid trumped the NIS 7,088,000,000 offer submitted jointly by OPC Energy, a developer and operator of power generation facilities in Israel and US, and the Noy Fund, an Israeli infrastructure and energy investment.

Dalia Power Energies, part of the winning consortium, operates Israel’s largest private power station, Dalia, east of Kiryat Malachi in the south. It supplies about 10% of the total electricity produced in the country, according to its website, and is powered by natural gas from the offshore Tamar gas reservoir.

IEC CEO Meir Spiegler said that the sale of the Eshkol power station will help “intensify competition in the energy sector and lower the cost of living for the benefit of the public.”

“For the first time in its 100 years, the IEC will cease to be a monopoly in the electricity sector as its market share is being reduced to about 40% of electricity production in the economy,” said Spiegler.

Energy Minister Israel Katz called the sale “unprecedented,” adding that he intends to use part of the proceeds from the deal to lower the price of electricity and the cost of living.

“We are on our way to turn into an energy powerhouse and Israeli citizens will benefit from safe, available and cheap energy,” Katz said.

The Eshkol power plant, named after Israel’s third prime minister Levi Eshkol, is located in the industrial zone of Ashdod near the port, and has a total surface area of approximately 470,000 square meters. The plant was the first to be converted to run on natural gas for the production of electricity. It operates six power generation units, including gas turbines, and the buyer will have an option to construct a new natural gas plant with additional capacity of up to 850 megawatts, the IEC said in a statement.

In 2021, a consortium led by Edeltech Energy & Infrastructure and Shikun & Binui Energy won the IEC tender for the Hagit power plant in a deal worth NIS 1.6 billion. The Alon Tavor power station was sold in December 2019 for NIS 1.9 billion and the Ramat Hovav power station was sold in June 2020 for NIS 4.25 billion. As

The sale of the Reading natural-gas power station in Tel Aviv, the fifth plant up for sale, still awaits government approval, the IEC said.

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