ISRAEL Law and Practice Contributed by: Benjamin (Benny) Sheffer and Lance Blumenthal, S. Horowitz & Co.
steady income or sell it once it reaches full opera- tion. Who are the Investors? • Domestic infrastructure funds – local specialist funds that focus solely on infrastructure and have good relationships in Israel. • Israeli institutional capital – pension funds, insur- ance companies and other institutional investors in Israel who provide substantial capital for infrastruc- ture projects. • Power and utility companies – domestic and inter- national energy companies that develop, own or operate assets in Israel. • Banks and lenders – traditional banks are still piv- otal for project debt, especially in the early years, though newer financing methods are becoming more common. • International infrastructure funds – global investors who see Israel as a market with potential, either via partnerships, tenders or secondary market assets. 1.4 Energy and Infrastructure Projects Israel is currently experiencing major growth in energy and infrastructure development. New power stations, solar farms, gas pipelines and regional intercon- nectors are being planned or built to support rising demand and improve energy security. Natural Gas Natural gas remains one of Israel’s primary sources of electricity. Several large projects are focused on increasing gas production and replacing old coal- fired units with modern combined-cycle gas plants, for example: • Dalia Energy is developing a new 850 MW gas- powered plant, supported by USD1.5 billion financ- ing. This follows earlier expansion at the same site; • the Katlan offshore gas project is receiving USD1.2 billion in investment, showing continued growth in domestic gas supply; and • the Leviathan gas field expansion will increase out- put for both customers in Israel and export markets such as Egypt and Europe.
Gas infrastructure is also being developed to transport more energy to neighbouring countries. This helps Israel strengthen its position as a regional gas hub. Solar and Battery Storage Israel has excellent sunlight conditions, allowing for rapid expansion of solar generation facilitating devel- opments, for example: • a national programme to encourage rooftop solar panel installation, which will add thousands of new small-scale renewable units across cities and towns; and • large solar megaprojects in the Golan Heights that will inject significant amounts of clean energy into the grid. These large solar farms are increasingly built with battery storage. Storage ensures electric- ity is available after sunset and helps stabilise the Major national infrastructure projects support both conventional and renewable energy, for example: • expansion plans around major gas fields help to support fuel supply and grow exports; • upgrading power networks and investing in region- al interconnection improves electricity reliability and reduces bottlenecks; and • energy export pipelines and strategic grid links boost Israel’s economic and geopolitical role in the region. These examples are ways to ensure that new solar power and flexible gas generation can be efficiently used across the country. In so doing, the phasing out of coal-based energy sources in exchange for solar and gas demonstrates Israel’s growth of renewables aggressively, while still relying on natural gas to guar- antee stable power supply, making Israel a highly active market for energy M&A, project finance and construction contracting. grid as renewable power increases. Infrastructure Supporting the Energy
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