Discount Bank Finances Power Generation Expansion with $1.1 Billion Facility

Discount Bank has provided Power Generation, an energy arm of Generation, with a NIS 1.1 billion (approximately $300 million) financing package. This significant funding is earmarked for the development of over 20 new projects across Israel, primarily integrating solar power generation with electricity storage capabilities. The planned grid connections over the next two years are expected to nearly double Power Generation's current operational solar capacity.

The financing comprises two loan agreements totaling over NIS 920 million for the projects themselves, with an additional NIS 160 million in corporate credit lines from Discount Bank, bringing the total credit facility to NIS 1.1 billion. This funding supports more than 120 megawatts of solar installations and approximately 1 gigawatt-hour of storage capacity. This new wave of projects is substantial compared to Power Generation's existing 120.6 megawatts of solar assets and 30 megawatt-hours of storage.

The emphasis on storage is strategic, allowing Power Generation to store electricity produced during peak solar hours and sell it when demand and prices are higher. This is particularly valuable as Power Generation also operates in electricity supply, enabling better alignment between production and consumption times. All electricity generated and stored from these projects will be sold to Bezeq Generation, a joint venture between Power Generation and Bezeq, under a 20-year power purchase agreement.

This long-term contract provides a stable revenue stream for the projects and reduces reliance on fluctuating daily electricity prices. Bezeq Generation targets over 400,000 customers by 2030, fitting into Power Generation's strategy to cover the entire electricity value chain, from generation and storage to retail sales. Generation's investment in Power Generation was valued at approximately NIS 2.62 billion as of late June.

This expansion occurs as Power Generation is finalizing a major NIS 4.45 billion acquisition of Shikun & Binui Energy, pending regulatory approvals. If completed, this would significantly bolster Power Generation's position as a comprehensive energy platform. For Generation, whose stock has risen about 84% year-to-date, securing financing like this is crucial for its rapid development plans.