# Presentation: 678785

## The Israel Electric Corporation Ltd.

- The Israel Electric Corporation Ltd.

- April 2006

## Installed Generating Capacity Growth ( MW )

**14,878**

## ?

***2006***

***2007***

***2008***

***2009***

***2010***

**1.2010**
**Wind**
** ****100 **** MW**

**9.200****8**
**Steam Add****.**
**CC-HaifaB**
**139**** ****MW**

**6.2008**
**Steam Add****.**
**CC-HaifaA**
**139**** ****MW**

**9****.2005**
**Steam Add. CC- Eshkol**
**141**** ****MW**

**6.2007**
**Steam Add. CC- Alon Tavor**
**135**** ****MW**

**9****.2006**
**Steam Add****.**
**CC-GezerA**
**136**** ****MW**

**4****.2006**
**CC-Hagit**** **
**359**** ****MW**

**12****.2006**
**Steam Add****.**
**CC-GezerB**
**136**** ****MW**

**1.200****9**
** ****Solar Plant**
** ****100**** ****MW**

**7.2008**
**Steam Add****.**
**CC-Zafit**
-  **126**** ****MW**

**3.2008**
**IPP**
**Dorad**
**400**** ****MW**

**9****.****2008**
**IPP**
**Dorad**
**400**** ****MW**

**1****.****2010**
**CC-IPP** **354  ****MW**

**4****.****2009**
**CC-IPP**
**350  ****MW**

**7****.****2008**
**IPP**
**Hadera**
**200 **** ****MW**

**Repowering**
**2x****360****  ****MW**
**   ****(Net Increase****       ****(290 MW**

**7.2006**
**CC–Zafit**
**Phase 1-GT**
**228****  ****MW**

**8.200****7**
**CC–HaifaA****   **
**Phase 1-GT**
**238**** ****MW**

**11.200**
**CC–HaifaB**
**Phase 1-GT**
**238**** ****MW**

**10.2007**
**Wind**
** ****50**** ****MW**

**12.2005**
**CC****–****G****ezer****B**
**Phase 1-****GT**
**236**** ****MW**

**9.2005**
**CC****–****GezerA**
**Phase 1-GT**
**236**** ****MW**

**?**

**?**

**?**

**?**

_**Generation Expansion Plan for the Period   2005-2010**_

## Slide 4

## IEC’S FINANCING

- -_Financing is needed for the development plan of the electricity system_
- -Internal resources
- -Israeli banks
- -Israeli capital market-Notes
- -International capital market-Notes
- -ECA’S- EXIMBANK,HERMES,COFAS ETC.
- -OPIC

## ECA

- EXPORT CREDIT AGENCY

- All _ECA’s_ (like EXIMBANK) targets are to support local industry by providing export financing for goods and services.
- Such financing serves the exporter and the buyer.
- _OPIC_ supports U.S. exporters,fosters economic development in new and emerging markets and supports U.S. foreign policy.
- IEC has utilized both EXIMBANK and OPIC facilities.

- ECA’s - General

- _EXIM_-$ hundreds millions have been borrowed and fully repaid.
- $ hundreds millions have been borrowed and are still open.
- Main financing is for power plants – 12 years repayment after a grace period of 4-5 years.
- _OPIC_- $ 250 m’ for natural gas pipeline – 15 years repayment after  5 years grace period.

- IEC’s Experience

- Advantages for IEC –
- Long term financing.
- Relative-Cheap financing.
- Money on time – no negative carry.
- New market – competition with local financing market.
- International activity which creates added value to the company and the State of Israel.
- Development of the company and the State.
- Creates added value to the business cooperation with foreign suppliers.

- ADVANTAGES

## EXIMBANK-OPIC

- _EXIMBANK_
- US content financing
- US flag vessels are required
- A State guarantee is required/not required
- Up front exposure fee

- _OPIC_
- All financing
- All vessels
- A State guarantee has been required
- On going yearly insurance fee

## OPICISRAEL ELECTRIC CORP. LTD.

- NATURAL GAS PIPELINE

## THE PROJECT

- -Offshore pipeline (mainly)
- -Estimated cost - $ 250 m’
- -Constraction period – 2 years
- Local/foreign goods and services

## Slide 13

## OPIC

- CITIBANK’S General information
- State  guarantee - unknown
- Total cost and terms were unknown

## CHOOSED LENDER

- After checks  –
- CITIBANK has been choosen

## PRELIMINARY INFORMATION TO OPIC

- -General information concerning IEC.
- -General  information concerning the project.
- -Government  involvement
- -US investor (lender)

## FURTHER INFORMATION

- Investments to be made
- _ENVIRONMENTAL IMPACTS –STUDY_
- Investments  to be insured
- Loan duration
- Economic/other contributions  of the project
- Employment-workers rights/safety
- Health and safety
- Revenues  of the local government
- Any new technology

## INGL

- -IEC is the project manager and the funds provider in this specific project.
- -The pipeline is the state’s property  which will be operated by INGL.
- -As a consequence INGL  participance  was necessary.

## ACTUAL 

- -GOVERNMENT GUARANTEE – FEES/WORDING
- -OPIC INSURANCE PREMIUM–FEES/WORDING
- -TRUST – US CITIZEN
- -LEGAL DOCUMENTS – HUGE ! A LOT OF PARTICIPANTS
- -LOAN TERMS – INTEREST –FIX/FLOATING  RATE,DURATION,GRACE PERIOD ETC.
- -L/C OR DEPOSIT IN ADVANCE
- -ENVIRONMENTAL STUDY – WORLD BANK GUIDELINES !
- -PRECONDITIONS FOR SIGNATURE
- -PRECONDITIONS FOR DISBURSEMENTS-DOZENS CERTIFICATES/PAPERS !
- -LEGAL OPINIONS INCLUDE US COUNSEL LEGAL OPINION

- OPIC/EXIMBANK – an added value to Israel and IEC.
- Additional capital market which provide long term financing.
- “Push” the israeli market to reduce spreads.
- Creates international involvement.

- SUMMARY

- _Financing skill._
- _International_ financing skill.
- International _legal_ skill.
- Reports.
- ....._”Consumes” time and “learning curve” in order to meet all requirements._

- NEEDS

## Last but not least

- A message to those people who wish to _start _the process :
-  A GOOD DEAL IS NEVER
-       EASY
- 						BUT               																				           AN EASY DEAL IS NEVER GOOD.

## THANK YOU