Bank Hapoalim will lead a financing package of about NIS 5 billion for the construction of the Kesem power plant, a major new gas-fired station that is expected to help meet Israel’s growing electricity demand in the second half of 2029.
The project is being developed by Shamir Energy Group, Kibbutz Givat Hashlosha, Hezi Kugler, Alon Polishuk, and Clal Insurance. The group has been working on the initiative for many years and has now signed agreements for the senior debt financing. With the completion of the deal, Shamir Energy Group further consolidates its position as a significant private power producer in Israel’s electricity market.
The Kesem power plant will be located in the north-eastern section of the Kesem Interchange. It will be built as an advanced combined-cycle (CCGT, H-class) facility using Siemens technology. Given its strategic importance to Israel’s energy system, the government has designated the project “vital infrastructure.”
Once operational, the station is expected to help secure power supply to the Tel Aviv metropolitan area (Gush Dan) and additional regions, and to address the expected electricity shortfall later in the decade.
According to the developers, the plant will be among the most efficient in Israel and will reduce polluting emissions compared with older fossil-fuel units in the system.
Bank Hapoalim to lead financing for Kesem power plant
Under the financing structure, Bank Hapoalim will provide approximately NIS 3 billion in loans, with the remainder supplied by a syndicate comprising Mizrahi-Tefahot Bank, the First International Bank of Israel, and Meitav Investment House.
The debt framework will be denominated in euros. Bank Hapoalim said the deal reflects its leading role in national infrastructure financing, in general, and in the conventional energy sector, in particular, relying on expertise built over many years by the bank’s project-finance and infrastructure teams.
“Bank Hapoalim is proud to lead the financial close for the Kesem Energy power station, which has been defined by the government as vital to the energy sector and to securing continued electricity supply in central Israel,” said Shmulik Arbel, deputy CEO and head of the business division at Bank Hapoalim.
“The Kesem Energy power plant is a central project in Israel’s future energy market, ensuring energy continuity for the economy and forming an important pillar in the country’s growth strategy. This significant, groundbreaking transaction was arranged by the national infrastructure and project-finance sector within the business division, led by Lior Mantzur. I see great importance in leading this field as part of a multi-year strategy for developing national infrastructure, strengthening Israel’s backbone, and implementing the government’s plans and needs, especially these days,” Arbel added.
Shamir Energy Group is a leading player in Israel’s energy market and holds a 53% stake in the Kesem power station. The group also owns 33% of the Alon Tavor power plant, an 830-megawatt facility that recently completed the construction of a new peaker unit. In addition, the company is initiating, developing, and building renewable-energy projects totaling about 410 megawatts of solar power and roughly 2 GWh of storage (its share), as well as waste-to-energy projects using biogas technology.
The developers were advised on the deal by Beta Finance, led by Sagi Ben Simon and Yigal Kokoshkin, and by attorney Ori Mandel of Erdinast, Ben Nathan, Toledano & Co. The lenders were advised by attorneys Jonathan Finklestone, Guy Kles, and Tal Bignitz of Meitar Law Offices, and by financial adviser Amnon Alon of Variance.