The former regulator recruited by Tzahi Nahmias to fight the Electricity Authority

Mega Or, the logistics and data center company owned by Tzahi Nahmias, has hired Major General (res.) Sami Turgeman, former CEO of Noga, the national power system management company, as a consultant in recent months.

Turgeman is assisting the company at a critical time when it must request approvals from the Electricity Authority to build its data centers — a task that became more important for the company last July, when the Electricity Authority halted the distribution of licenses for 140 days. This was done in order to formulate a new approval method, after it had broadly approved numerous requests from data center developers, nearly half of them from Mega Or itself, according to estimates.

The temporary pause in license distribution is creating great uncertainty in the market and causing potential clients of data centers in Israel to reconsider entering the country; among other things, it also led to a decline of approximately 18% in Mega Or's stock. The company did not ignore the problem, noting in its second-quarter reports for the year that it is unable to estimate the impact of the Electricity Authority's decision on "projects that are under construction or in planning and promotion stages for which binding hosting agreements with end users have not yet been signed," but they claim that the agreements signed with clients — apparently the cloud companies Caruso or Google — are not expected to be materially affected by the decision.

Decisive months for developers

One of the largest deals made by Mega DC, Mega Or's data center company, could cost it dearly. Following the Electricity Authority's decision, there is uncertainty regarding the approval of its request for a 1-gigawatt connection for the site of the former Alliance factory, which it purchased in Hadera for about 1 billion shekels in cash. This is while the existing connection on the site allows for the establishment of a station that generates only 40 megawatts of electricity.

The coming months are expected to be decisive in how the Electricity Authority determines the way licenses will be allocated to developers, including the consideration of various criteria and how they will be reflected in the final decision — for example, an estimate of the ability to raise capital to purchase graphics processors or build data centers, financial robustness, and connections with clients such as Google, Amazon, and Microsoft, or neo-cloud companies like Nevius and Caruso. Turgeman, who served two terms as CEO of Noga, between 2018 and 2025, can certainly help Mega Or navigate the uncertain market.

Mega Or reported its results for the second quarter this month, with almost full occupancy and an increase in net operating income (NOI) of 25% to 117 million shekels, but a decrease in net profit — 252 million shekels compared to 426 million in the corresponding quarter; a sharp increase in net financial debt, which rose to 5.2 billion shekels compared to 1.3 billion at the end of last year, and a jump in working capital deficit from 123 million at the end of last year to 670 million in the second quarter.