Nofar acquires 47.5% of Reindeer power plant at a 1.8 billion shekel valuation

Nofar Energy has signed an agreement with Phoenix and five private owners to acquire 47.5% of the Reindeer power plant in the Southern Sharon region. The transaction involves payments of 711 million shekels to Phoenix and 144 million shekels to private investors. The project has not yet been built and has not reached financial closing.

The deal coincides with an asset swap between the Generation fund and Rapac Energy. Following these transactions, Generation will hold 52.5% of the station, with Nofar holding the remainder. Nofar is also set to sign an option with Generation to purchase the entire Reindeer station if required by regulators.

This series of transactions follows the Generation fund's massive acquisition of Shikun & Binui Energy for 4.45 billion shekels. This deal has drawn scrutiny from the Electricity Authority and the Competition Authority, which are concerned about market concentration. To promote competition, Generation and Rapac are swapping shares in joint plants: MRC (Alon Tavor) will go to Rapac, while Reindeer will go to Generation.

Although the Reindeer station lacks gas supply agreements and financial closing, Nofar views the valuation as justified, citing the high demand for electricity in Israel and regulatory hurdles facing the expansion of the competing Dorad station.

Should the swap deal fail to satisfy regulators, Generation has prepared an option to sell its remaining stake in Reindeer to Nofar at the same 1.8 billion shekel valuation. If exercised, Nofar, primarily a renewable energy firm, would become the sole owner of the gas-powered plant.

Advocate Alon Ziv and his firm, Alon Ziv & Co., provided legal counsel to Phoenix for this transaction.