Infrastructure Project Opportunities For Chinese Construction And Energy Companies In Israel

Author:Mr Simon Weintraub, Daniel Green and Micha Tollman,
Profession:Yigal Arnon & Co
 
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Israel's Infrastructure and Energy Sectors provide many opportunities to Chinese construction & energy companies, as evident in several leading Chinese construction companies' successful performance of major Israeli infrastructure projects.

Below we provide you with a brief snapshot of past projects performed by Chinese companies in Israel and future opportunities for Chinese construction companies and financiers in Israel.

Infrastructure in Israel

Israel is set for a $32 billion infrastructure spending boost, offering attractive opportunities with plentiful deal flow.

Israeli infrastructure key growth segments include local government authorities, defense industries, and private companies.

Most infrastructure assets are owned by the Israeli government which understands that attention to infrastructure is of fundamental importance to the successful economic growth of Israel. This is demonstrated in efficient government tenders for public-private partnerships as well as for strait government contracting. Additionally, the Israeli government takes a noteworthy involvement in project risk allocation - providing safety nets to concessionaires, such as the assumption of demand risk and other guarantees. Additionally, the government of Israel realizes that foreign companies may be deterred by Israel's geo-political situation, and therefore the Israeli government provides forms of safety nets in the event of war, terror, and other hostile activity. Such safety nets include the government's assumption of the senior debt upon the occurrence of such events.

The level of infrastructure in Israel is insufficient and Israel is still in the process of building and improving its infrastructure, particularly in the area of public transportation, and mainly in the major cities, though also in the electricity delivery system. For many projects, Israel looks for outside help, soliciting international tenders and partnerships, and the coming years will see many opportunities, specifically relating to, highways, railways, energy, off shore gas, and water.

The attached Infrastructure for Growth plan 2017 released by the Israeli Government, shows its multi-year program for infrastructure development which includes a list of 147 infrastructure and energy projects valued at ~$30 million and above totaling approx. ILS 116 billion, whose construction shall begin in the years 2017-2021. The projects presented in the list are projects which are already in progress as well as projects which are budgeted or approved by the government. There are also several projects that have not yet been approved, but have been examined financially, and there is high probability that they will be implemented in the next 5 years. The majority of these projects are transport projects which include several PPP's such as: the Tel Aviv Light Rail Green Line (ILS 20 billion), and the Tel Aviv Light Rail Purple Line (ILS 8.6 billion), and the fast lanes for Road 2 and for Road 20.

The list of projects will provide your clients and affiliates an...

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