Mivtach Shamir Energy Enters Server Farm Race with Jordan Valley Option
Translated & summarized from Bizportal by baba
Mivtach Shamir's energy division has secured a ten-year option to develop a 100 MW server farm on 106 dunams in Kibbutz Ashdot Yaakov Meuhad, Jordan Valley. The deal allows Shamir Energy to plan, finance, and build the facility, with the potential for electricity generation or storage. This strategic move aligns with a limited government allocation for new server farms, where demand far exceeds supply, and leverages Shamir Energy's existing power generation expertise.
The story in 6 lines · by baba
- Mivtach Shamir Energy secured a 10-year option for a 100 MW server farm in Kibbutz Ashdot Yaakov Meuhad.
- The project covers 106 dunams in the Jordan Valley, with potential for electricity generation or storage.
- The deal is part of a limited government allocation of 1,300 MW for new server farms by 2030.
- Demand for server farm connections far exceeds the available allocation, creating a competitive environment.
- Shamir Energy's existing electricity generation experience is seen as an advantage for the project.
- The agreement's realization depends on multiple approvals from the kibbutz, Shamir, and regulators.
Mivtach Shamir's energy arm is entering the server farm sector, signing a ten-year exclusive option agreement with Kinneret Industrial Parks Association. The deal allows Shamir Energy to develop a project of approximately 100 megawatts (MW) of IT capacity on land in Kibbutz Ashdot Yaakov Meuhad, located in the Jordan Valley.
The agreement, reported by Esadot Itanim which holds a stake in the association, covers about 106 dunams. Shamir Energy will have the right to initiate, plan, finance, and construct server farms, electricity generation or storage facilities, or a combination thereof, at its discretion. During the option period, the group is responsible for feasibility studies, government approvals, detailed planning, building permits, and financial closure. Upon final approval, Shamir Energy can exercise the option for a 24-year and 11-month land use permit. The association could become a partner, holding up to 18% of a dedicated corporation if it contributes proportional equity.
This move comes as the Electricity Authority has allocated 1,300 MW of new connections for server farms by 2030, a figure significantly lower than the 27,000 MW requested by developers. Each new facility is capped at 200 MW, with developers required to provide a substantial financial guarantee. Shamir Energy's existing experience in electricity generation, including a stake in the Alon Tavor power station and a natural gas plant project, positions it favorably to meet requirements for backup and self-generation capabilities.
The land in Ashdot Yaakov has historical ties to electricity generation, being near the site of Pinhas Rutenberg's first hydroelectric power station in the region, which operated from 1932 until the 1948 War of Independence. The agreement is contingent on approval from one of the association's members within 90 days. Esadot Itanim noted that the project's realization is uncertain and depends on Shamir, the kibbutz, and regulators. Detailed negotiations for a final agreement are expected within 180 days of government approval.
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