NewMed Energy has struck a memorandum of understanding (MoU) with Enlight Renewable Energy on developing projects in the Middle East and North Africa.
NewMed, previously Delek Drilling, said it had signed the agreement on August 14 on entering the renewable energy industry. The company said it would work on a fixed three-year term on plans, including solar, wind and energy storage.
The focus of operation would be target countries such as Egypt, Jordan, Morocco, the United Arab Emirates, Bahrain, Oman and Saudi Arabia.
NewMed CEO Yossi Abu said the plan was in line with a strategy set out six months ago. “Just as we have brought the gas revolution to the countries of the region, so we will strive to bring the renewable energy revolution, together with our partner, Enlight Energy,” he said.
NewMed CEO Yossi Abu is taking a personal stake in the transaction. NewMed will have a 33.33% stake in the plans. Enlight and CEO Abu will hold the remaining stake via a company. Enlight will have a 70% stake and Abu 30%. Abu’s share of investments will come from Enlight, via a non-recourse loan.
The partners will use their connections to promote the joint venture, including through Abu’s “active personal involvement”. Enlight will hold control during construction and operation.
For the plan to go ahead, the parties to the MoU will have to reach a definite agreement.
NewMed will provide up to $100 million, it said.
Israeli stock exchange TASE changed listing rules in 2021, allowing oil and gas companies to invest in renewable energy. These investments, the exchange said, should “contribute to higher returns and reduced risk”.
TASE requires oil and gas companies planning to move into renewables to put the matter to a shareholder vote.
Gilad Yavetz, CEO of Enlight. said there an opportunity had emerged in recent years, that started with natural gas.
“We believe that the structure of the joint venue utilises the parties’ diverse and complementary capabilities, which we expect will create significant synergies. Our partnership has the unique potential of delivering large-scale renewable energy operations across the region”.
Enlight began operations in 2008, with a focus on greenfield solar projects in Israel. The company now has projects in 12 countries. It acts as both project developer and independent power producer (IPP). It entered the US in 2021.
Updated at 4:25 pm with comments from both CEOs.