Nofar Acquires 47.5% Stake in Potential Reindeer Power Plant Valued at NIS 1.8 Billion

Nofar has finalized a deal to purchase a 47.5% stake in the Reindeer power plant, located in southern Sharon, from Phoenix and five private owners. The transaction involves NIS 711 million paid to Phoenix and NIS 144 million to the private businessmen. The Reindeer plant is still in the planning stages and has not yet secured financial closure or critical agreements such as gas supply contracts.

This acquisition coincides with a share swap deal between Generation Fund and Rafek Energy, where Generation will hold 52.5% of the plant and Nofar will own the remaining shares. Nofar is also expected to sign an option agreement with Generation to acquire full ownership of Reindeer if required by regulators.

These transactions occur amid Generation Fund's major NIS 4.45 billion acquisition of Shikun & Binui Energy, one of the largest in Israel's electricity market. Regulators, including the Electricity Authority and the Competition Authority, are concerned about market concentration and are encouraging competition and separation of powers. Consequently, Generation and Rafek are exchanging stakes in joint power plants to reduce overlap: Rafek will acquire MRC (Alon Tavor), and Generation will take full ownership of Reindeer.

Despite the high valuation for a plant not yet operational or fully approved, Nofar is optimistic about Reindeer's prospects due to Israel's strong electricity demand and delays in expanding the competing Dorad plant. If the share swap does not satisfy regulators, Generation plans to sell its remaining Reindeer shares to Nofar at the same valuation, potentially making Nofar the sole owner of this gas-powered conventional plant. Nofar primarily operates in renewable energy but would thus hold 100% of a conventional gas plant.

This series of deals reflects ongoing shifts in Israel's energy sector amid regulatory scrutiny and market consolidation efforts.