One of the biggest desalination plants to be built in Sorek

On completion of the plant, the desalinated water will constitute over 65% of Israel’s domestic water consumption.

(Communicated by the Finance Ministry International Affairs Department)

Today, the financing agreement was signed for the construction and operation of the seawater desalination plant in Sorek. The plant, with an output of 150 million cubic meters per year and a cost of approximately USD 400 million, is expected  to be the second largest in the world. SDL, the project company, which is owned  by IDE Technologies (51%) and Hutchison Water International Holdings Pte. (49%)  was chosen by the Finance Ministry’s Inter-Ministerial Tenders Committee for Seawater Desalination as the winner of the tender for financing, planning, building and operating the plant in Sorek. The plant, whose construction will be completed in 2013, is the fourth BOT (Build-Own-Transfer) project to be built in cooperation with  the private sector. It will operate using reverse osmosis technology. The plant constitutes a global achievement in light of its record output and the low price of  the desalinated water, just NIS 2.01 per cubic meter, representing a significant saving for Israel’s water sector.

The construction of the facility in Sorek is another step in the implementation of the Ministry of National Infrastructures and Government Water and Sewage Authority’s emergency plan for Israel’s water sector, which was established by the Government  Decision Number 3533 of June 2008, which set a desalination target of at least 750 million cubic meters by no later than the year 2020.

The desalination plant, which will cover an area of 100 dunams, will be based on advanced membrane desalination technology enabling a savings in costs and a reduction in energy consumption. The plant, whose construction began some months ago, will produce high-quality water that will be conveyed directly to the National  Carrier.

The construction of the plant in Sorek will have a major impact on Israel’s water sector, providing approximately 20% of Israel’s domestic water consumption and approximately 10% of its potable water consumption.

Minister of Finance Dr. Yuval Steinitz said that, "this is the fourth desalination plant built by the State in successful cooperation with the private sector. On completion of the plant, which is one of the world’s biggest desalination plants, the desalinated water will constitute over 65% of the economy’s domestic water consumption. This step will make a significant contribution to solving Israel’s water crisis. In addition, the investment in the project by international companies such as the EU’s European Investment Bank, and the financing provided by Israeli banks,  indicate that the local economy is strong, operates in accordance with international standards and attracts investments from international bodies."

Minister of Infrastructure Dr. Uzi Landau said that, "the Ministry of National Infrastructures’ efforts are bearing fruit and delivering results, and the one who will benefit from them is the Israeli citizen. We are fighting for every drop of water. From saving to reclamation of treated sewage for agriculture to the construction of desalination plants. As Mother Nature’s finance minister, I am proud to say that I am responsible for the fact that after a six-year drought, while our neighbors in the

Middle East are providing their citizens with water from tankers, the residents of Israel turn on their faucets and water comes out. This is a genuine revolution that is being spearheaded by the Ministry. The plant in Sorek will join the plants that we have already built in Hadera, Ashkelon and Palmachim, which are already desalinating a total of around 300 million cubic meters of seawater a year. We are proceeding with this tremendous momentum, but we must not forget that Israel is still in the midst of a crisis and an intensive desalination process is essential. Only a good winter next year and the continued rapid and massive construction of desalination plants and expansion of the existing plants can lead to the recovery of the water sector and take us out of the crisis. I intend to ensure that during the next three years we will add another 300 million cubic meters of water to the national desalination program, with the goal of achieving security for the State of Israel by means of its infrastructure facilities. I would like to take this opportunity to call on those private producers who are already negotiating with the Tenders Committee to take part in expanding the existing plants as quickly as possible."

Accountant General Shouky Oren noted that, "finalizing the financing of the Sorek desalination plant represents an important milestone in the creation of solutions for Israel’s water sector. The Sorek desalination plant is the fourth such BOT project in Israel, and the price that was obtained via the tender mechanism, NIS 2.01 per cubic meter, expresses the efficiency of the tender process and the successful implementation of sharing risks between the government and the private sector. In addition, the participation of international banks and companies in the project contributes to increasing competition and improving the local market."

Oded Fixler, (acting) Director General of the Water Authority said that, "this plant, the fourth in number, places the State of Israel – once again – at the global forefront in terms of water economics, and represents an important and essential step to basing Israel’s water sector on the principles of sustainable development. Israel’s water reserves are below the red line, agriculture is receiving a reduced quantity of water and Israel’s residents are being asked to continue their efforts to save water as a regular way of life. Streamlined use and intelligent management of the water sector will guarantee its growth for the benefit of all Israel’s consumers."

IDE Technologies CEO Avshalom Felber said that, "the major project in Sorek is progressing in accordance with the planned timetable, and its construction began some months ago, inter alia in order to supply some of the water before the contractual date, which is the end of 2012. Finalizing the financing today is another milestone in the execution of this project. We are pleased to join forces once again with EIB, the European Development Bank and, together with Bank Hapoalim and Bank Leumi, to provide the complex financing for the Sorek desalination project. The present success constitutes another vote of confidence in IDE, and the Sorek desalination plant is another in a series of its achievements in the construction of some of the world’s biggest and most advanced desalination plants, at the lowest desalination prices in the world. We believe that this project, along with the Hadera and Ashkelon plants, which are already supplying valuable water to the Israeli economy, represents another significant step in solving the country’s water shortage problem."

Hutchison Water CEO Amikam Cohen said that, "the construction of the Sorek desalination plant is a fascinating technological challenge, with the construction company mobilizing the best global technologies in order to supply Israel with water of excellent quality at a particularly low price. The unique status of the Hutchison Group in the global economy plays a key role in obtaining the financing that we are announcing today. Finalizing the financing is another step in making the Sorek desalination plant a flagship project in the global market. Hutchison Water is proud to contribute the experience, know-how and the capabilities of the company’s staff and of the global Hutchison Whampoa to this project. The plant that we are starting to build today in Sorek is a milestone in the activity of Hutchison Water and a milestone in the history of desalination in Israel.