After receiving the building permit: The Eshkol Avshal project approaches financial closing
Dalia Energy's Eshkol Avshal power plant project is nearing financial closing. Financing parties have confirmed that the conditions precedent for the process have been met.
The project by Dalia Energy to build the "Eshkol Avshal" power plant is approaching financial closing, following the receipt of the building permit for the construction of the new production unit at the Eshkol complex. According to a report submitted to the Tel Aviv Stock Exchange, the financing parties have confirmed the fulfillment of the conditions precedent required for the continuation of the financing process. The project, with a capacity of approximately 850 megawatts, is expected to begin commercial operation in July 2029.
The next stage in the massive energy project is obtaining approval from the Electricity Authority for the financial closing and the approval of the tariff for the production unit — a process that Dalia Energy has already initiated with its application to the Authority. According to the company, the senior debt for the project amounts to approximately 5.2 billion shekels, with Bank Hapoalim acting as the senior debt arranger.
This is a project that Dalia has been promoting since it acquired the Eshkol site in Ashdod from the Israel Electric Corporation about two years ago, as part of the reform to open the electricity market to competition. The deal, valued at approximately 9 billion shekels, also included the right to build a new production unit at the same site.
Last May, Dalia reported that it had signed a financing package with Bank Hapoalim totaling approximately 5.7 billion shekels, which included approximately 5 billion shekels of debt for a period of 19.5 years, alongside bridge facilities and guarantees totaling approximately 700 million shekels. The funds from the initial drawdown of the deal were intended, among other things, to repay bridge loans totaling approximately 650 million shekels that Dalia used to purchase turbines from Siemens, as well as other loans totaling approximately 900 million shekels taken during the acquisition of the Eshkol site from the Israel Electric Corporation.
The new station will be operated using a gas turbine with Siemens' H-Class technology, and it is planned to be one of the largest production units in Israel. Dalia had already ordered the main systems for operating the station from Siemens even before the financing agreement was signed.
The new project is expected to benefit from a dedicated availability tariff throughout a 20-year license period. According to Dalia's report, the tariff it will receive stands at approximately 5.5 agorot per kWh. An availability tariff is a payment that the state pays to electricity producers for the availability of production units, even when they are not actually supplying electricity to the grid. The final tariff approval is currently on the desk of the Electricity Authority.
Eshkol Avshal is one of two large electricity production projects that Dalia is promoting simultaneously. In its other project, Dalia 2, at the Tzafit site, an additional production unit is planned with a capacity similar to the current one, of approximately 850 megawatts, with an estimated investment of 4–5 billion shekels. In Dalia 2, the availability tariff will be significantly lower than that expected for Eshkol Avshal, standing at 3.31 agorot per kWh for a period of 25 years from the start of its operation.
