Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Infrastructures Ltd. has signed an memorandum of understanding (MOU) with clothing manufacturer Nilit Ltd. to build a 48-megawatt cogeneration power station at the company's premises in Migdal Ha'Emek for $46 million. Construction of the power station is subject to obtaining financing.
Delek Infrastructures set up a subsidiary, IPP Delek Ramat Gabriel Ltd., in which it owns a 57% stake, for this project. The rest of IPP is owned by Sigma Epsilon Power Engineering Ltd. and Adi Energy Ltd.
For Delek Infrastructures, the deal represents expansion of its power plant construction business. Last year, the company signed a contract to build the Delek Ashkelon power station for the Ashkelon desalination plant, in which Delek Group is a partner.
Delek Group also owns 53% of natural gas supplier Yam Thetis, giving Delek an incentive to enter the power station construction business, since it can also provide the fuel for them. Delek Group sold its 20% in private electricity provider Dorad Energy Ltd. when it rejected Delek's request to increase its stake in the company. The Public Utilities Authority (Electricity) would not allow a natural gas supplier to be a partner in a private power company as well.
Senior officials at the Ministries of Finance and National Infrastructures are pleased by Delek Group's expanding electricity business. The officials noted that because of Delek Group's high financial standing, the project would probably go ahead.
Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008