Zorlu, Partner Get $273 Million Loan for Israel Power Plants

Zorlu Enerji Elektrik Uretim AS (ZOREN), an electricity producer in Turkey, and its partner Edeltech Ltd. of Israel signed a 1.1 billion-shekel ($273 million) loan accord today with Bank Leumi Le-Israel Ltd. (LUMI) to finance two plant projects in the Jewish state.

Repayments on the loan, which has a maturity of 18 years and annual interest of 5.75 percent, will start after the natural gas-fired plants are completed in the second half of 2014, Zorlu said in a statement to the Istanbul Stock Exchange today. The companies will meet 20 percent of the investment from their equity, it said.

“Zorlu Holding has investments exceeding $1 billion in Israel,” Ahmet Nazif Zorlu, chairman of Zorlu Holding, said in an e-mailed statement.

The Ramat Negev power plant, which will have a capacity of 120 megawatts, will cost 766 million shekels and the 55-megawatt Ashdod will be built for 355 million shekels, according to the statement. M+W Israel Ltd. will plan and build the plants while Zorlu O&M Enerji Tesisleri Isletme & Bakim AS will operate them and provide maintenance.

Zorlu Enerji Elektrik cut its stakes in Ramat Negev Energy Ltd. and Ashdod Energy Ltd. to 42 percent each from 51 percent last week while Edeltech’s stake rose to 58 percent in each company, Zorlu said on Aug. 7. In return, Zorlu raised its stake in Solad Energy Ltd., which is building a 100-megawatt power plant in Israel, to 42 percent from 26 percent as Edeltech cut its stake.

Dorad gas-fired power plant project, Zorlu Enerji Elektrik’s biggest investment in Israel with an 800-megawatt capacity, is programmed to start operations next year, the company said.

Zorlu Enerji rose 0.9 percent to 1.12 liras at the 5:40 p.m. close in Istanbul, the biggest increase since Aug. 3. The main market index gained 0.7 percent.

To contact the reporter on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net

To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net;

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