ISRAEL Trends and Developments Contributed by: Benjamin (Benny) Sheffer and Lance Blumenthal, S. Horowitz & Co.
backed by new long-term export contracts, includ- ing an enormous USD35 billion deal to increase gas exports to Egypt. This, in turn, supports investment in transmission, processing and cross-border infra- structure. At the same time, the government has accelerated solar and storage deployment to meet climate com- mitments and relieve grid constraints. Earlier ten- ders have awarded hundreds of megawatts of solar capacity, and in 2024–2025 Israel has run major stor- age tenders, including a 1.5 GW “mega-tender” and separate awards where leading IPPs such as Enlight have secured large battery projects. Storage assets are increasingly being developed as stand-alone infrastructure businesses with long-term revenue contracts, attracting both strategic utilities and infra- structure funds. For investors, the primary themes in Israeli energy M&A today include the following. • Platform deals – acquiring stakes in integrated IPPs with diversified portfolios of gas plants, renewables and storage, rather than single-asset transactions. • Balancing gas and green – gas assets still generate strong, relatively stable cash flows, while renewa- bles and storage provide growth and ESG align- ment. • Regulatory evolution – debates over tariff struc- tures, grid access and ancillary services markets, where the rules are still developing and can materi- ally affect valuations. Transport Megaprojects Urban transport is another major driver of deal flow and risk. Tel Aviv’s mass-transit plan envisages three light-rail lines and three metro lines; Jerusalem and secondary cities also have rail and BRT projects in design or build. These projects are typically procured as PPPs or long-term concessions, involving complex interfaces between civil works, systems, rolling stock, operations and real estate. Significant international participation on the Tel Aviv Red and Green lines, the Haifa–Nazareth LRT and other projects has become commonplace, with global
players such as Alstom and major Israeli contractors holding key roles. As projects reach financial close and construction progresses, sponsors are expected to recycle equity, giving rise to secondary M&A trans- actions where infrastructure funds and institutional investors purchase partial interests in concession companies. However, the metro and other megaprojects are also politically sensitive and legally contested. Recent liti- gation over planning and tender awards (for example, the M1 metro line management tender) and planning disputes over the number and location of station entrances illustrate the risk that legal and regulatory processes can delay timelines and affect project eco- nomics. Digital Infrastructure – Fibre, Towers and Data Centres Digital infrastructure is increasingly treated as a core infrastructure asset class in Israel, with M&A activ- ity focused on fibre networks, mobile towers and data centres. The government has actively encour- aged fibre roll-out and competition, including through wholesale access rules and recent reforms to reduce wholesale fibre costs and gradually relax Bezeq’s obli- gation to share its network. It is important to note that digital deals often raise specific regulatory questions on communications law, security clearances and foreign ownership, particu- larly where critical infrastructure is involved. PPPs and Concessions A large share of Israeli infrastructure M&A occurs at the level of project companies that hold PPP contracts or regulated licences. The World Bank’s benchmark- ing work shows that Israel has relatively developed frameworks for PPP preparation, competitive tender- ing and contract management, even if certain aspects (like fiscal risk assessment) can be improved. Common transactions include the following. • Secondary sales by construction sponsors – con- tractors and developers selling down to long-term financial investors once projects are de-risked.
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