MISHOR ROTEM: Israel's biggest private power plant, running on gas from the Tamar field, opened on Tuesday, the first in a government plan to break up the state-owned electricity monopoly.
OPC Rotem, built in Israel's southern Negev desert for about 2 billion shekels ($567 million), produces 440 megawatts of energy, or about 6 percent of total national demand.
Nearly all the rest is generated by state-owned Israel Electric Corp (IEC), and the government wants to change that.
"Our goal is to have private production account for more than 40 percent (of total production) so we can have real competition," Energy Minister Silvan Shalom said at the plant's ribbon-cutting ceremony.
"And private energy producers are starting to gather." The plant runs on natural gas that comes from the Tamar field, one of two huge discoveries made off Israel's coast in recent years.
Since Tamar came online in March, replacing more expensive fuels like diesel and fuel oil, Israel has been saving about a billion shekels a month, Shalom said.
Israeli conglomerate Israel Corp, which through its subsidiary IC Power is the main stakeholder in OPC Rotem, has said it is looking to sell part of its 80 percent share. French group Veolia owns the remaining 20 percent.
Shlomo Gigi, OPC Rotem's vice president of operations, said one of the reasons IC Power is looking to sell some of its stake is to raise funds to build a second plant of a similar size.
"The preferred option is to build it here, where we have all the infrastructure," he said. IC Power has invested over $2 billion in recent years, mainly in power generating projects in Latin America.
Israel Corp has said it plans to spin off some of its assets in a new, listed company in a bid to boost the value of its core businesses and attract a broader range of investors. IC Power would be one of the assets held by the new company.
Veolia, which also has stake in a desalination plant and a refuse derived fuel plant in Israel, is looking to double the size of its operations in the country in the next five years or so, the CEO of Veolia Israel told Reuters.
"We are today about 1.5 billion shekels, and it will double. That is in the energy, water and environmental sectors," said Ronen Starkman.
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