Dropouts Threaten Viability of Israel’s Ashelim Solar Tender

Negev desert

Is the sun setting on Israel’s plans to build solar power plants at Ashelim in the Negev Desert? (image via inisrael.com)

Clal Industries and BrightSource Industries are the latest companies to drop out of the competition to build two solar energy plants at Ashelim, in Israel’s Negev desert. The $1 billion tender to supply some 2% of Israel’s electricity is now in jeopardy, according to reports published in the Globes business daily yesterday.

Clal Industries had planned to partner with Spain’s Abengoa Bioenergy SA in a joint venture for the Ashelim project. In a notice to the Tel Aviv Stock Exchange yesterday, Clal explained that it had decided to abandon the joint venture “in part because of the commercial risks from the tender’s terms, and in view of the conditions in global capital markets.”

Globes also attributes the cancellation to “internal differences of opinion” between Clal and Abengoa, and notes that Israel’s Ministry of Finance hopes that Abengoa will carry on alone.

Earlier in the much-delayed process, it was thought that at least four or five teams would compete for the tender.  But if Abengoa does not continue, only two bidders will remain: a consortium of Siemens and Shikun u’Binui, and a consortium of Solar Millennium, Minrav Holdings, and Electra.

This would put the future of the tender at risk, according to Globes, “since in a tender with only two bidders competing to construct two power plants it will be extremely difficult to prevent price fixing between the bidders and to hold a genuine tender process.”

The BrightSource-Veolia team recently decided to withdraw from the tender competition, though it has yet to officially inform the tenders committee of its decision to drop out, Globes reports, citing “sources.”

New influx of cash for BrightSource

Meanwhile, BrightSource Energy, the parent company of BrightSource Industries, has raised $150 million in a fourth round of funding. The additional financing will be used to support the company’s 2,610 megawatts in contracts to build 14 solar power plants in the U.S. by 2016, as well as to advance the company’s international expansion plans.

Alstrom, which lost to Siemens in a bid to acquire Solel last year, is one of the new investors in this round of financing and has pledged to invest up to $55 million.

:: Globes

Read more about BrightSource:

Meet BrightSource’s Arnold Goldman
BrightSource Solar Expands on Coyote Land in Nevada

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