Nofar Energy buys 47.5% stake in Reindeer power station
Nofar Energy acquires a 47.5% stake in the Reindeer power station for NIS 855 million, with a complex ownership structure involving Generation Capital and Rapac, amid regulatory concerns over market concentration.
Nofar Energy is acquiring a 47.5% stake in the Reindeer power station, located in the southern Sharon region of Israel. The company will pay Phoenix Finance NIS 711 million and an additional NIS 144 million to five private owners, totaling NIS 855 million. The power station has not yet been built and has not secured financing or a gas supply agreement. This deal is part of a broader swap between Generation Capital and Rapac, which will leave Generation with 52.5% of Reindeer, while Nofar holds the remainder. Nofar also has an option to purchase the entire station if required by regulators. The transaction coincides with Generation Capital's acquisition of Shikun and Binui Energy for NIS 4.45 billion, one of the largest deals in the electricity production market. Regulators, including the Electricity Authority and the Competition Authority, are concerned about concentration and are encouraging competition. To address this, Generation and Rapac are selling each other shares in joint power plants: MRC (Alon Tavor) goes to Rapac, and Reindeer goes to Generation. If the swap is not approved, Generation may sell its remaining shares to Nofar at the same valuation of NIS 1.8 billion. A peculiar condition in the deal stipulates that if Nofar acquires full ownership, Powergen (Generation's energy company) will control Reindeer until commercial operation, then ownership alternates every five years, with veto rights for both parties. This structure appears designed to meet regulatory requirements without ceding actual control.