Doral and Empa Project $150 Million Annual Revenue Forecast

Doral and Empa have projected annual revenues of approximately $150 million from their joint server farm project in Har Tuv, near Beit Shemesh. The facility, expected to reach full capacity by 2030, is also forecast to generate about $100 million in operating profit before depreciation and amortization, and $80 million in free cash flow annually. This projection comes amidst a market where the Israel Electric Corporation has halted new server farm connection applications to the national grid.

The Har Tuv project, situated on 27 dunams of land owned by Nadav B. Logistics Group, will have a planned IT capacity of 74 megawatts, with a grid connection commitment of 96 megawatt-amperes to be supplied in stages. The landowner has an option to become a partner in the project, holding between 5% and 30% equity.

This is the first project for the Doral-Empa joint venture, established earlier this year. The Israel Electric Corporation's 140-day freeze on new applications, which ended in early December, was due to an overwhelming number of requests. The company had warned it was struggling to cope with the influx, which added approximately 19,000 megawatts to an existing backlog of 8,000 megawatts, creating a theoretical demand of about 27 gigawatts.

The Har Tuv facility already has a connection commitment, exempting it from the freeze. Future applicants will await the Electricity Authority's December decision on issues including local power generation, infrastructure cost sharing, and regional priorities. The race for server farm sites in Israel is now largely focused on land with existing or secured grid connections.

Empa, holding a 50% stake, reported the revenue forecast in shekels as approximately 450 million shekels annually before operational and financing expenses, and around 300 million shekels in FFO (Funds From Operations). Server farms are described as income-generating assets with long-term leases, predictable operating costs, and few large tenants, similar to real estate investments.

The projected revenue is contingent on several conditions, including a final commitment from the system operator for the full power connection, completion of construction phases, and finalization of the lease agreement with the landowner within four years of the original contract date. Doral's stock saw a 5% increase following the announcement, reaching a market value of approximately 12.4 billion shekels.