Nofar Energy to buy Megalim thermo-solar power plant

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Source: Globes

Nofar will pay NIS 580 million for 40% of the Negev plant, which is owned by Noy Fund (40%) and institutional investors (60%).

Nofar Energy (TASE: NOFR) has signed a non-binding memorandum of understanding to buy 100% of the Noy Fund’s rights for the Megalim thermo-solar power plant in southern Israel for NIS 580 million. The Noy Fund holds 40% of the rights to Megalim and institutional investors hold the remaining 60%. Megalim has a capacity of 121 megawatt.

Construction of the project was completed in 2019 and connected to the grid and operates as a BOT project with a concession agreement for 28 years, ending in 2044. The installation supplies electricity to the grid at NIS 0.85 per kilowatt compared with NIS 0.17.5 per kilowatt in more recent solar energy tenders for the construction of new projects.

The project was built at Ashalim in the Ramat Hanegev region at a cost of NIS 2.8 billion, using technology that is now considered outdated and less efficient based on thermo-solar energy generated from a solar tower.

Completion of the deal remains dependent on due diligence by Nofar Energy and will be subject to state approval for the transfer of the concession.

Nofar CEO Nadav Tenne told “Globes,” “The Megalim deal represents a major leap forward for Nofar and will integrate well with our activities while consolidating the high synergy of our unique business model and engineering, operational and administrative capability of the company. Megalim joins the range of projects that the company is advancing in Israel, the US, Italy, Spain and Romania while building a diversified mix of assets.”

He added, “In terms of the risk profile in this project, you have to understand that the risk here is very low because this is a project with returns under the contract with the government. We plan to improve and to enhance the installation so that the figures will only improve.”

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