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Pensions funds to build power stations for leasing to IEC

By David Hayoun

Globes Online, 3 Apr 03 16:52

Sources inform “Globes” that a revolutionary plan is emerging, under which pension funds would invest several billion dollars in the coming years to build power stations for Israel Electric Corporation (IEC). Israel’s leading pension funds, the government, and IEC have been holding negotiations on the matter. IEC’s financial crisis is behind the plan.

Under the plan, the pension funds would invest the money, and IEC would build and operate the power stations under a lease agreement with the pension funds. Outgoing Ministry of National Infrastructures director general Yair Maayan, confirmed the plan to “Globes”. Minister of Finance Benjamin Netanyahu appointed Maayan as the social economic cabinet secretary this week.

Maayan said the plan had been discussed with IEC CEO Jacob Razon, and the pension funds were enthusiastic. IEC said in response that Adv. Prof. Joseph Gross proposed the plan to the IEC on behalf of the pension funds.

IEC recently claimed that lacked the financial resources to carry out its development plans for the coming years, which includes investing several billion dollars to build power stations. IEC has NIS 40 billion in liabilities and NIS 10 billion in assets. The international rating companies consequently downgraded IEC’s credit rating.