Subscribe to Print Edition | Fri., June 06, 2008 Sivan 3, 5768 | | Israel Time: 02:56 (EST+7) web haaretz.com   Back to Homepage Rosner's Domain Diplomacy Defense Jewish World Opinion National Print Edition Advertising Books Peres Conference Business Real Estate Easy Start Travel Week's End Anglo File

Israeli real estate firm buys solar energy empire by Madrid for NIS 163 million By Michael Rochvarger Tags: gelats, Israel, solar energy  The Israeli real estate and construction firm Gelats has reported a huge deal in Spain, agreeing to buy a 72,600-square-meter solar energy park under construction in the Cuenca Region 150 km from Madrid. Gelats, through a subsidiary, will pay 32 million euros for the park, or about NIS 163.4 million, including VAT and additional expenses. The deal is a culmination of the company's earlier announcement that it was considering business opportunities in solar energy. Gelats plans to cover 70% to 85% of the deal though bank financing, and the rest from its own resources. The company notes that although the money has not yet been raised, it does not expect to run into problems because financing for this type of project is common in Spain. Advertisement The deal was closed after Spanish legislation that will require electricity providers to buy electricity from companies that use photovoltaic technology, which generates power from solar rays. The requirement is applicable to companies that have received all necessary licensing and completed their hookup to the electricity grid by September 28 this year. The transaction will be similar to a Build-Operate-Transfer (BOT) agreement, where management and operations are carried out by the private sector and include government financing. At the solar energy park acquired by Gelats, the energy produced will be sold at a set rate of 0.45 euros per kilowatt for 25 years, and at 0.36 euros per kilowatt for an unlimited period thereafter. The rates are subsidized by the Spanish government. The estimated cost of producing such electricity is only 0.08 euros per kilowatt. The solar energy park is designed to produce 3.84 megawatts of electricity per hour, designated for sale to Spanish utility Union Fenosa, generating a steady annual income of 2.8 million euros. With an investment of about 32 million euros for the purchase of the park, the deal reflects a steady annual return on investment of about 9%, similar to that of income-earning properties. Bookmark to del.icio.us   Terrorist donuts U.S. Arabs irate over criticism of celebrity cook's kaffiyeh. All the way to hell Rosner's blog: It's Obama's good intentions that pro-Israel activists fear.

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