Partnership is expected to transform the Israeli electricity market
TEL AVIV, Israel, Sept. 06, 2023 (GLOBE NEWSWIRE) -- Enlight Renewable Energy (“Enlight”, NASDAQ: ENLT, TASE: ENLT.TA) and Electra Power (TASE: ELCP.TA) are pleased to announce the execution of a memorandum of understanding (“MOU”), outlining the formation of a joint venture to market and supply clean energy to residential consumers and small businesses in Israel.
Electra Power is a leading company in the residential Israeli gas market, possessing a well-established marketing, distribution, and customer service infrastructure that serves approximately 400,000 residential and commercial customers across the country. Enlight is a leading Israeli renewable energy producer with a strong local and global presence across solar, wind and battery energy storage projects.
The Israeli electricity market will open to competition in January 2024, allowing independent suppliers and distributors of energy to compete for the first time with the incumbent Israeli Electricity Company. Electra Power and Enlight are poised to leverage each of their competitive advantages in the Israeli market to establish a leading supplier of clean energy to residential customers.
Electra Power has been pioneering the initial commercial launch of electricity supply to households since early 2023. Tens of thousands of new residential customers have embraced this change, benefiting from diverse and cost-effective power options. With full market liberalization beginning at the start of 2024, Enlight’s partnership with Electra Power will enable both companies to expand the demand base for cheap and clean electricity amongst Israeli consumers.
As per the MOU, Electra Power will hold a 65% stake in the joint venture, with Enlight owning the remaining 35%. The JV will be jointly managed by both companies. Enlight will also have the option to increase its ownership by an additional 5%, contingent upon achieving certain future investment objectives. The parties have also committed to a minimum of renewable energy generation volume that each will contribute to marketing to the JV’s clients. The establishment of the partnership is subject to completion of definitive agreements and regulatory approval from the Israel Competition Authority.
Chen Melamed, CEO of Electra Power:
"The signing of this memorandum of understanding marks a significant milestone in our journey to supply clean energy to residential consumers in Israel. We are also pleased to partner with Enlight, a leading player in the renewable energy sector in Israel, which will enable us to deliver clean energy to tens of thousands of households in Israel. In just a few months, we've secured substantial renewable generation from key industry players, showcasing confidence in Electra Power's electricity supply platform. These agreements align with our strategic plan to establish ourselves as an innovative and customer-centric energy and electricity supply company."
Gilad Yavetz, CEO of Enlight:
"The Israeli electricity market is evolving, ushering in a new era of competition with the Israel Electricity Company for the direct supply of electricity to consumers. This move empowers Israeli households to access the country’s abundant solar resources and choose cheaper and greenhouse gas-free electricity. Enlight has decided to enter this strategic market, which generates an annual turnover of approximately NIS 10 billion in the residential sector alone, and Electra Power was the natural choice as our partner for this venture given their extensive reach to hundreds of thousands of households, billing capabilities, and a strong track record of delivery in customer service. Both companies share a common vision of revolutionizing competition in the Israeli electricity sector. In the realm of supply to industrial and large corporate customers, which accounts for around NIS 20 billion annually, Enlight will continue its independent operations, complementing our comprehensive supply strategy in the Israeli market."
About Enlight Renewable Energy
Founded in 2008, Enlight develops, finances, constructs, owns, and operates utility-scale renewable energy projects. Enlight operates across the three largest renewable segments today: solar, wind and energy storage. A global platform, Enlight operates in the United States, Israel and 9 European countries. Enlight has been traded on the Tel Aviv Stock Exchange since 2010 (TASE: ENLT) and completed its US IPO (NASDAQ: ENLT) in 2023. Learn more at enlightenergy.co.il.
About Electa Power
Electra Power (formerly Supergas) was established in 1953 and acquired by the Elco group in 2019. The company markets and distributes natural gas to approximately 400,000 private customers and 5,000 businesses. In the past two years, Electra has initiated small natural gas-powered cogeneration plants. In 2023, Electra Power began providing electricity at affordable prices to the domestic market, attracting tens of thousands of new customers.
Forward-Looking Statements
Information provided in this press release may contain statements relating to current expectations, estimates, forecasts, and projections about future events that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this press release, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to Enlight's plans, objectives and expectations for future operations and are based upon its management's current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. Actual future results may differ materially from those projected as a result of certain risks and uncertainties and other risks described under "Risk Factors" as described in Enlight’s annual report on Form 20-F filed with the Securities and Exchange Commission (“SEC”) on March 30, 2023, and in Enlight’s subsequent quarterly reports on Form 6-K and annual reports on Form 10-K that are filed from time to time with the SEC and TASE. These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.
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