Arava Power Update

Posted on June 23, 2014

Dear Friends and Founders,

We are pleased to bring you news of a significant event for Arava Power.  The Phoenix Holdings Group in Israel, one of the leading financial institutions with more than 60 billion NIS under management, has signed an agreement to invest $15 million in Arava Power.  The closing is expected to take place over the next several months once government approvals are obtained. This transaction is significant in many ways for Arava Power’s future.  Most significantly, the transaction accomplishes the following:

  • Replaces Siemens as an equity holder with Phoenix (the majority of the investment is going to Siemens for this equity stake);
  • Represents Phoenix’s desire to invest more in infrastructure by using Arava Power as a platform company in photovoltaics; and
  • Provides Arava Power with an in-country partner that is motivated and able to help finance Arava Power’s future pipeline of projects.

Moreover, this transaction is being done without dilution to the Global Sun Partners, LP stake in Arava Power.  In the short-term, the effect is primarily to position Arava Power for our next stage of growth;  while in the long-term, Arava Power is now able to compete more aggressively in whatever regulatory framework is ultimately established by the government for the next chapter of the Israeli solar industry. This transaction is the culmination of more than a year of work and complex and challenging negotiations.  It is a critical achievement to ensure our opportunities in the future.  We will soon send you a notice for our annual limited partners meeting.  We will be happy to discuss this transaction and more at that time. In the meantime, please find below the English language translation of the press advisory issued today in Israel. Shine on, David, Ed, Howie & Yosef

June 22, 2014

Phoenix acquired Siemen’s part and invested $15M in the Solar Energy Company Arava Power    This is the first step of more a extensive plan to invest in Israeli infrastructures   Today, (Sunday) Phoenix signed an agreement to acquire Siemen’s (Siemens Project Ventures GmbH) part in the solar energy company, Arava Power, and to further invest. The scope of the transaction, via Amitim and Nostro funds, stands at 15 million dollars, hence defining Phoenix a substantial partner in the company. Within the transaction framework Phoenix is expected to receive a double digit IRR on its investment.   Roee Yakir, CEO, Phoenix Investments and Finance: “Phoenix’s investment in Arava Power is an additional step of a more extensive plan to invest in infrastructures, which is intended to broaden investment portfolios and generate predictable cash flow, characterized by relatively low correlation for economic turnover. PV solar energy is a unique subdivision in the field of renewable energies which, beyond contributing to the environment by producing clean electricity, benefits from stable cash flows reinforced in long term power sales agreements. Arava Power is a worthy partner with proven abilities in initiating solar projects of the broadest scope among the current players active in the field. This investment opens numerous opportunities for Phoenix for additional partnerships in the field of solar energy alongside the leading player in the industry”.   Ed Hofland, Chairman, Arava Power Company: “We at Arava Power are grateful to Phoenix for its trust throughout the entire process and we are positive that this transaction, together with Phoenix, will enable Arava Power to invest in and develop many more projects in the energy field. Furthermore, we would like to thank Siemens for five years of true partnership during which we built a strong infrastructure of solar projects producing some 100MW of green energy throughout the Negev and the Arava”.     On behalf of the Arava Power Company the transaction was led and managed by: Ed Hofland (a member of Kibbutz Ketura which is a principle investor in the company) and David Rosenblatt (Co-founder and Vice Chairman); Eran Litvak, CFO; Adv. Orit Marom, Shibolet  and Adv. Einat Davidson. Phoenix was accompanied by Mark Phillips and Limor Hudir, HFN; Ziv Haft Accounting and Plenergy Engineering.     Phoenix Insurance is the main branch of Phoenix Holdings Group. The company deals in all branches of insurance: General insurance, health insurance, life insurance and long term savings and financial services.   Arava Power is the leading solar energy company in Israel and pioneer in solar fields. It was the first solar energy company to launch a ground-based solar field in Israel, Ketura Sun,  in 2011. Last month Arava Power launched 6 additional solar fields in the Negev and Arava that together will produce 36MW of clean electricity.  The company has begun construction of a large-sized solar field, also in Kibbutz Ketura, on 600 dunams, which will produce 40 MW.   For additional details: Arad Media – Irit Radia/Michal Hadar – 03-7693333, 054-6699311/02 UNIK – Irit Nachmani – 054-6687006

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