Migdal Insurance Company will invest NIS 800 million in Sundix

Migdal Insurance Company has announced an investment of NIS 800 million in Sundix, which specializes in the development and operation of solar projects. The investment in the company will be made by Migdal alongside the infrastructure fund of JPMorgan, in which Migdal also invests about NIS 3 billion (actual investment and future liabilities). The investment in Sundix consists of the acquisition of 9% of the company's capital and investment in future projects in the development stages.
Sundix is ​​an independent producer of solar electricity (IPP) with about 300 projects in seven countries, mainly in Western Europe and Japan. About 90% of the company's future revenues are backed by a regulatory tariff or PPA (long-term electricity sales agreement) with an average contract of about 20 years. The company's customers include mainly local electricity companies with an investment rating. The company has successfully summed up 2020, with no major delays, and in line with the annual budget.
Migdal notes that the deal is expected to yield a return of about 9% -10%, and therefore embodies an opportunity to invest in high returns relative to the field of renewable energy, which is characterized by yields of brownfield (income-producing properties, after construction) of 5% -7%, mostly in developed countries. The high return is due to the company's operational capabilities to create value in profitable projects.
Through the investment, Migdal will be exposed to core core assets most of which are backed by long-term contracts. The field of generating electricity from solar energy facilities enjoys strong regulatory support and a growing trend of demand for electricity. Following the investment, the volume of direct investments in the field of renewable energies under Tower management will amount to more than NIS 3.5 billion in the past year.