Arava Power’s solar power site at Kibbutz Elifaz.
(photo credit: ITAMAR GRINBERG)
Phoenix signed an agreement last week to acquire the Siemens portion of Arava Power as well as invest in the firm, the solar company reported on Sunday.
In a $15 million transaction, Givat Shmuel-based Phoenix Holdings Company Ltd. has bought out the shares of Siemens Project Ventures GmbH in Arava Power Company – the firm responsible for Israel’s first medium- sized solar field.
The agreement, financed by investment- fund members and nostro accounts (an account that is held within a foreign country by a domestic bank in the currency of the foreign country), will allow Phoenix to become a significant partner in Arava Power and is expected to yield Phoenix double-digit returns on the investment, the solar firm said.
Phoenix chief investment manager Roy Yakir said: “Phoenix’s investment in Arava Power is another step as part of the company’s process of investing in infrastructure, which is designed to diversify portfolios and generate predictable cash flow, characterized by relatively low correlation to economic cycles.”
“Photovoltaic solar energy is a sub-channel in the field of renewable energy and has unique characteristics, which beyond its contribution to the environment in clean electricity production, allows for stable cash flows backed by long-term agreements for electricity sales,” he said.
Praising Arava Power for having “proved its ability in initiating extensive- scale solar projects,” Yakir said the investment will open up many opportunities to continued cooperation with what he called “the leading player in the industry.”
Arava Power Company was founded in 2006 by Kibbutz Ketura resident and company chairman Ed Hofland, New Jersey businessman and company vice chairman David Rosenblatt and American- Israeli solar entrepreneur Yosef Abramowitz.
The company launched the country’s first medium-sized solar field, the 4.95-megawatt Ketura Sun, in June 2011.
Two months ago, Arava Power inaugurated six solar projects in the Arava and Negev deserts, amounting to a total of 36 MW.
In the last few days, construction began on a large, 40-MW solar field that will be built by partners Arava Power and Electricite de France-Energies Nouvelles, also at Kibbutz Ketura.
The site is in the race to become the country’s first large-scale solar field and is expected to be ready for grid connection by the end of 2014 or the beginning of 2015.
The partners have received NIS 250m., or 80 percent, of the project’s total cost from Bank Hapoalim.
“We at Arava Power thank Phoenix for the faith they have given to us all the way and are confident that this transaction will enable Arava, in partnership with Phoenix, to invest in and develop many more projects in the energy sector,” Hofland said. “We also thank Siemens for five years of true partnership and for building a strong foundation of solar projects that generate about 100 megawatts of green electricity throughout the Negev and the Arava.”