Luzon's solution for the Dorad 2 deadlock: shutting down turbines to enable construction
Amos Luzon has proposed to the Electricity Authority that three turbines at the Dorad 1 power station be shut down to comply with market share regulations and unblock the Dorad 2 project. Meanwhile, the Luzon Group is selling 20% of its stake in the station to the Meitav investment house.
In an attempt to resolve the deadlock delaying the approval for the construction of the Dorad 2 power station, Amos Luzon proposed at a hearing at the Electricity Authority to stop the operation of three turbines at the Dorad 1 power station.
Dorad 1 has a capacity of 840 megawatts generated by 12 turbines. Adelteq, owned by Uri Adelsburg and holding 18.75% of Dorad 1 shares, would exceed the 20% national electricity production threshold by 200 megawatts with the new station. As this is a prohibited limitation, the Electricity Authority halted the approval process for Dorad 2. Luzon proposed shutting down three turbines to reduce output by 210 megawatts, ensuring Adelteq meets the required threshold. The Authority is currently reviewing the proposal.
Another obstacle is the sharp increase in rent demanded by the state-owned EAPC (Eilat Ashkelon Pipeline Company) for the land on which the station is built, rising to 120 million shekels annually from less than 4 million shekels. Dorad's owners object, and EAPC, holding 37% of Dorad 2 shares, is effectively blocking the project.
Amos Luzon, who controls 33.75% of Dorad shares through Dorad Energy, is suffering from the delay. Yesterday, the Luzon Group announced an agreement to sell 20% of its shares in the subsidiary Luzon Energy to the Meitav investment house, based on a 4.4 billion shekel valuation for the station. Meitav will acquire a 6.75% stake in Dorad for 223 million shekels. A memorandum of understanding has been signed, with due diligence to follow.
Additionally, Harel and Clal Insurance may join the deal, provided that the financial closing for Dorad 2 is achieved. Luzon raised commercial securities from Clal and Meitav to finance the purchase of Alumey's share six months ago; the delay has contributed to a 32% drop in the Luzon Group's value over the past three months. However, Dorad remains optimistic that approvals and financial closing with Bank Hapoalim will be secured by year-end. A turbine purchased from General Electric is scheduled to arrive in Israel in 2030, making the approval of the second station essential.
