Bank Leumi Warns Israel Lags a Decade Behind in Infrastructure Development
Bank Leumi Corporate Division Head Liat Shov stated at a national infrastructure conference that Israel lags a decade behind in modern infrastructure, risking economic growth unless 429 billion shekels in planned projects are rapidly executed.
Israel is lagging roughly a decade behind in modern infrastructure development, a gap that must be closed to secure future economic growth, according to Liat Shov, Head of the Corporate Division at Bank Leumi. Speaking at the National Infrastructure Conference hosted by Bank Leumi and Calcalist, Shov emphasized that traffic congestion is merely a symptom of a much deeper economic challenge.
Shov noted that while extensive construction works—including road paving, light rail projects, and national initiatives—are visible across the country, the economy remains in a perpetual state of catching up rather than anticipating demand. State plans currently advance over 200 projects exceeding 429 billion shekels across transportation, energy, water, and other national infrastructures, representing one of the most significant investment opportunities in Israel's recent history.
Highlighting the Gush Dan Metro project—estimated at approximately 177 billion shekels, or about one-third of total state infrastructure investments—Shov pointed out its transformative potential. Ministry of Finance and Ministry of Transportation estimates suggest the project's annual economic benefit could reach roughly 34 billion shekels by 2040, demonstrating that infrastructure spending generates long-term economic value.
The Energy Challenge and AI Growth
Beyond transportation, Shov addressed the surging demand for electricity driven by the global artificial intelligence revolution. Data centers, cloud systems, and AI applications require massive, stable electricity supplies. Although a national energy plan targets 26 gigawatts of renewable energy by 2035—more than four times the level expected at the end of 2025—and includes a 20 billion shekel investment to upgrade the electricity grid by 2030, plans alone are insufficient.
Execution pace remains a critical hurdle, constrained by prolonged planning and licensing procedures, regulatory complexities, fragmented authorities, and coordination difficulties between government bodies. Shov argued that success should no longer be measured by approved plans or allocated budgets, but by projects actually launched, completed on time, and their tangible economic contribution to the market.
A Collaborative Economic Model
Overcoming these barriers requires a tripartite model uniting the state, the business sector, and the financial system. The state must establish national priorities, regulatory certainty, and remove obstacles; the business sector contributes entrepreneurship and execution capabilities; and the financial system provides long-term financing solutions. Synchronizing these three pillars is essential to accelerate Israel's transition from planning to execution over the coming decade.
