Chinese-Israeli group will purchase Alon Tavor power plant from IEC for NIS 1.9 billion

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by Ifi Reporter Category:Government Jul 2, 2019

The Chinese-Israeli MRC Group, consisting of China's China Harbor and Israel's Mivtach Shamir and Rafak, is the winner of the giant tender for the purchase of the Alon Tavor power plant. The company beat six competitors and will purchase the station for NIS 1.9 billion. This is the first time a Chinese company has been entering conventional electricity generation in Israel.
The station is supposed to be transferred to the group until the end of 2019. There is a large gap between the price offered by the group and the estimated shelf price of the station, which is around NIS 800 million. This is an excellent signal for electricity consumers, since the gap between the tender offer and the shelf price should be rolled into the pockets of the citizens in the form of a possible reduction in the electricity rate.
 As part of the IEC reform, it was determined that it would halve its production capacity, which currently stands at about 70% by selling five power plants to the private market.
In addition to Alon Tavor, the IEC will sell the Reading sites in Tel Aviv, Eshkol in Ashdod, Hagit on the Carmel coast and Ramat Hovav in the Negev within five years, when the latter was already in the tender two weeks ago.
The reform also stipulates that the power stations that will be sold will be transferred to private hands, including 40 employees employed by the Israel Electric Corporation. These will be employed for at least five years under the new owners, including maintaining their salary terms.
The station at Alon Tavor produces about 600 megawatts, which is about 4.4% of IEC's current production capacity, and is sold with the possibility of increasing production by about 20%, subject to statutory amendments that are supposed to end there by 2022. The buyers' To purchase the station without receiving the IEC's problematic gas contract with the Tamar reservoir. The new owner's contract will allow energy costs to be reduced by 20 to 30 percent.
Energy Minister Yuval Steinitz said that "the results of the tender are testimony to the success of the historic reform in the IEC and the electricity sector, and this reflects the confidence expressed by the business sector in implementing the reform.
IEC Chairman Yiftah Ron-Tal added that "IEC is starting the era of competition in the energy market. The company is separate from the production monopoly and is embarking on a new road of competition, a defining moment in its life. "

 

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