Financing Agreement Signed to Build Ashdod Desalination Plant

Financing Agreement Signed to Build Ashdod Desalination Plant

The plant will produce 100 cubic meters of water annually

In the presence of the Minister of Finance, Dr. Yuval Steinitz, and the Minister of National Infrastructures, Dr. Uzi Landau, the Accountant General in the Ministry of Finance, Ms. Michal Abadi‑Boiangiu, and the Deputy Accountant General, Mr. Gil Shabtai, today signed a concession agreement with ADL Ltd. to design, build and operate a seawater desalination plant in the town of Ashdod, in order to produce 100 cubic meters of water annually. ADL, a subsidiary of Mekorot Development and Initiatives Ltd., will build and operate the plant for a period of 25 years. Project funding is being provided jointly by Hapoalim Bank and the European Investment Bank (EIB).

Based on reverse osmosis technology, the Ashdoddesalination plant will supply 100 cubic meters of water annually from the end of 2013, equivalent to 15% of Israel’s total domestic water consumption. This is the fifth desalination plant to be built in Israel, after plants in Ashkelon, Palmachim, Hadera, and the Soreq plant destined to start supplying water in 2013. All five plants combined are expected to produce 85% of total domestic consumption as of 2013.

 

TheAshdoddesalination plant, like the plants inAshkelon, Hadera and Soreq, will be based on a BOT contract under which the concessionaire undertakes to design, build and operate the desalination plant for a total period of 26.5 years, at the end of which the plant will be transferred to State ownership. According to the time schedules stipulated in the concession agreement, the company undertakes to complete the construction of the plant by December 2013, and to supply at least 50 million cubic meters by September 2013. The terms of the agreement also include financial incentives for completing construction ahead of time.

 

Minister of Finance, Dr. Yuval Steinitz, said that: “This is a historic agreement. We will reach a situation whereby 90% of the water inIsrael will be desalinated water. The step taken today sends a message that we are autonomous and not dependent on foreign entities. It is also important to stress that by today’s step we are committing to taking care of nature and even to returning water to nature. I am confident that the process that has started today will also keep the price of water in check for Israeli consumers.”

 

Minister of National Infrastructures, Dr. Uzi Landau, said that: “After many long years in which this issue has been in the works in the establishment, we can now recite the blessing for new beginnings. The ceremony could have been held two years ago, but what is important is the very fact that it has been held. Beyond these wonderful ceremonies, there are people in the field doing the work, with whom we are working on a daily basis – the Water Authority and Mekorot. We insisted that the plant be built by Mekorot because we believe that it is vital to have a State owned company involved in water desalination. 500 million cubic meters of the 600 million cubic meters of current water desalination is in the hands of the private market. Those who do not want us to be exclusively in the hands of the private market must ensure that the government, especially in the infrastructure arena, has an operational arm. We are on the brink of a revolution in which long-term planning and intelligent and systematic compliance with objectives will save the state vast amounts of water and money. In the coming years, we will be able to return water to nature and even to sell water to our neighbors.”

The Minister added: “WhileSyriais uprooting people from the land due to water shortages, inIsraellife is continuing as usual, despite seven drought-stricken years.”

 

The Accountant General in the Ministry of Finance, Ms. Michal Abadi-Boiangiu, drew attention to the fact that the desalination plant inAshdod is another BOT project, proof of the vast potential inherent in this approach in other fields that have traditionally been the prerogative of the State sector.

 

Last year, three other BOT projects were inaugurated: the Carmel Tunnel, the fast lane at the entrance to Tel Aviv, and the light rail transit system inJerusalem. Also, the financial closure for the Soreq desalination plant was signed last year.