Israel Begins Construction on 5.6 Billion Shekel Sorek Power Plant

Construction of the new Sorek power plant is set to begin following the completion of its financial closure, adding approximately 850 megawatts to Israel's electricity generation capacity with an estimated investment of 5.6 billion shekels. The project, slated for commercial operation by November 2029, will be located near the Sorek desalination plants and the Shafdan facility in the central Gush Dan region. It aims to address surging electricity demand driven by population growth and economic expansion. The financing package of roughly 4.8 billion shekels is led by Mizrahi Tefahot Bank and Israel Discount Bank, with participation from First International Bank of Israel, Migdal, Meitav, and Menora Mivtachim.

The concession is held by Edbtec and Menora Mivtachim, with Keystone Power joining through a convertible loan for a 40 percent equity stake, pending regulatory approvals. The project secured a 25-year operational franchise following a tender won in December 2024, where Edbtec and Menora submitted an availability tariff of 3.18 agorot per available kilowatt, undercutting the next closest bid by 25 percent. However, due to existing transmission grid limitations by the Israel Electric Corporation, the plant will initially be entitled to availability payments for 670 megawatts.

To mitigate global supply chain bottlenecks, major generation equipment including gas turbines was ordered from Siemens Energy over a year ago. The combined-cycle plant will operate at high efficiency and lower fuel consumption. Furthermore, the developers secured a 15-year natural gas supply agreement with Energean, valued at approximately 1.4 billion dollars for up to 7.7 billion cubic meters. Ministry of Energy and Infrastructure Director-General Yossi Dayan emphasized that the Sorek facility is a vital step in strengthening Israel's energy security and ensuring reliable supply for the central region.