Mizrahi-Tefahot and Discount Lead 5 Billion Shekel Sorek Plant Financing
Mizrahi-Tefahot and Discount Bank will lead a 5 billion shekel financing deal for the Sorek power plant. Adaltac and Menora Mivtahim are developing the 630-900 MW facility, slated to begin operations in 2029.
Mizrahi-Tefahot and Israel Discount Bank are set to lead one of the largest infrastructure financing agreements in Israel in recent years, providing 5 billion shekels for the construction of the Sorek power plant. The plant will be built by Adaltac, headed by Uri Adelsberg, and Menora Mivtahim, with the Keystone investment fund potentially joining the developers at a later stage.
The financing package was led by Ofir Mordar, head of the Corporate Division at Mizrahi-Tefahot, and Hila Eran-Zik, head of the Corporate Division at Discount Bank. Several institutional entities will join the two banks, most notably Migdal Insurance, whose investment division is led by Erez Migdali, and the Meitav investment house, headed by Guy Mani. Notably, Israel's two largest banks, Bank Leumi and Bank Hapoalim—traditionally a dominant player in infrastructure financing—are not included in the syndicate.
In December 2024, Adaltac and Menora won the tender to construct the Sorek power plant, which is slated to begin operations in 2029. In such transactions, developers typically provide equity amounting to 20% of the construction costs. The Keystone fund, managed by Gil Deutsch, Roni Biram, and Navot Bar, was involved in the deal, providing equity financing estimated at 300 to 400 million shekels.
Plant Details and Financial Structure
Under the financing terms, once the facility becomes operational, the company will be permitted to convert a portion of the loans into equity rights, representing 40% of capital rights and 49% of voting rights, subject to approval from the Electricity Authority and the Israel Competition Authority. The Sorek power plant will be erected near the Shafdan wastewater treatment facility and the Sorek desalination plants, with a capacity ranging between 630 and 900 megawatts.
Adaltac will construct and operate the facility for a period of 25 years, after which ownership of the plant will revert to the state. The consortium submitted a winning availability tariff bid of 3.18 agorot per kilowatt-hour. An availability tariff is typically paid to ensure the immediate readiness of units to generate power in accordance with Israel's electricity demands, independent of the energy tariff itself. This mechanism provides a stable revenue stream that offers security to financing institutions.
Adaltac currently stands as the largest private electricity energy company in the country, though it risks losing this title to Generation Capital if the latter secures regulatory approval from the Electricity Authority to acquire Shikun & Binui Energy. Meanwhile, the infrastructure financing sector remains highly competitive, highlighted by Bank Hapoalim's recent commitment of 5 billion shekels to the Ksam power plant project and its earlier backing of the Dalia 2 plant.
