Tenders Published for Thermal Solar and Photovoltaic Power Projects in Israel

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Researched by Industrial Info Resources (Sugar Land, Texas)--Israel's inter-ministerial tenders committee, set up for the proposed solar power projects in the Negev region of Israel, recently published two tenders for the development of the projects on a build-operate-transfer basis. The 250-megawatt (MW) project in Ashalim, Negev, signifies Israel's first national undertaking in the solar power sector and will comprise two thermal solar power plants with a generation capacity of 80-125 MW each and a 15- to 30-MW photovoltaic unit. The tenders pertain to the construction of the plants, operation and maintenance for a period of 25 years, and subsequent transfer of the projects to the state.

According to earlier reports, in March 2008, Israel's Ministry of National Infrastructures (MNI) published a performance-qualification tender worth $600 million for the development of the thermal solar power project in Ashalim. In April 2008, the MNI wanted to publish a similar tender for the photovoltaic power project but ran into disagreements with the Ministry of Finance regarding the terms of the tender. The Ministry of Finance wanted to first float the request-for-information tender, followed by the performance-qualification tender based on responses from interested bidders.

A tender was published in June last year for setting up a 15-MW photovoltaic power plant that could later be expanded to 30 MW. The tender, worth between $70 million and $100 million, called for bidders with experience in developing and maintaining a photovoltaic power plant of at least 1 MW, which must have been operational for at least two consecutive years during 2003-08. Bidders were also required to have experience in acquiring, procuring and developing at least two industrial production facilities with a minimum power generation capacity of 10 MW each.

More recent reports indicate that the recent tenders were published following the approval granted by Israel's National Planning and Building Commission for use of land to set up a 250-megawatt solar power station in Ashalim. Later this month, the inter-ministerial tender committee will publish supplementary tender documents covering franchise agreements, license and sale of power generated from the projects to The Israel Electric Corporation Limited (Haifa, Israel).

In September 2008, seven firms and consortia cleared the pre-qualification stage of the tenders published last year and were invited to post bids in the request-for-proposal stage of the process for the thermal solar power project. Ten bids were made for the photovoltaic power project. For the thermal solar project, independent bids were received from IC Green Energy Limited (Tel Aviv, Israel), a subsidiary of Israel Corporation Limited (TLV:ILCO) (Tel Aviv), Ormat Industries Limited (TLV:ORMT) (Yavne, Israel), and Shafir Civil & Marine Engineering Limited (Petah Tikva, Israel).

Clal Energy Limited (Tel Aviv), a subsidiary of IDB Holdings Corporation Limited (TLV:IDBH) (Tel Aviv), along with Abengoa Bioenergy Corporation (Chesterfield, Missouri), a subsidiary of Abengoa SA (MCE:ABG) (Seville, Spain), submitted a joint bid.

Another joint bid was submitted by BrightSource Industries Israel Limited (Jerusalem, Israel), formerly known as Luz II Limited and a subsidiary of BrightSource Energy (Oakland, California), along with Dalkia Israel Limited (Herzliya, Israel), a subsidiary of Veolia Environnement (NYSE:VE) (Paris, France).

Housing and Construction Holding Company Limited (TLV:HUCN) (Ramat-Gan, Israel) partnered with Solel Solar Systems Limited (Beit Shemesh, Israel) and Bateman Litwin NV (LSE:BNLN) (Amsterdam, Netherlands) to bid for the thermal solar power project and with Elecnor SA (MCE:ENO) (Madrid, Spain) to bid for the photovoltaic power project. Housing and Construction Holding Company has already proposed to set up a 100-MW thermal solar power plant in Negev at an estimated cost of $400 million to $500 million and has requested the Israel Land Administration for 875 acres of land for the proposed project.

The fourth consortium in the fray for the two projects in Ashalim consists of Dor Alon Energy In Israel (1998) Limited (TLV:DRAL) (Yakum, Israel), Minrav Holdings Limited (TLV:MNRV) (Ashdod, Israel), and Solar Millennium AG (FRA:S2M) (Erlangen, Germany).

The inter-ministerial tenders committee, headed by Hezi Kugler, Director General of the Ministry of National Infrastructures, and Avi Dror, Deputy Accountant General of the Ministry of Finance, is in the process of reviewing the bids. In addition to securing the right to produce solar energy, the winner of the contract will also received a 1,000-acre site from the government for the project at no additional cost. Upon completion, the two projects will cater to between 2% and 2.5% of Israel's energy requirements and contribute toward the nation's target of generating 10% to 20% of electricity from solar power by 2020. The Ministry of National Infrastructures has designated Negev as a preferred area for developing renewable energy projects.

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