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After years of dead-end discussions, the tender for a solar power station at Ashalim in the Negev is off to a start.

The inter-ministerial tenders committee will publish the prerequisites for tender participants Friday. The government is expected to issue two separate tenders for the estimated $650 million project.

The international tender will be held for the construction and operation of two thermo-solar power stations with a production capacity of 80-125 megawatts, or 2% of Israel's electricity production, on a buy-own-transfer (BOT) basis.

This is the second large-scale solar energy project announced this week, after Arava Power publicized plans for an extensive photovoltaic power station in the southern Arava with a capacity of up to 500 megawatts. This private initiative is contingent upon the financial liability of operating the station - in other words, the price that the Electric Corporation will pay for the electricity produced.

Knowledgeable sources say that a disagreement between the finance and infrastructure ministries over construction of an additional station utilizing photovoltaic technology has also been resolved, and the tenders committee will issue separate prerequisites for the estimated $60 million tender for this station by the end of March.

The third station will have a production capacity of about 15 megawatts.

The tenders committee, headed by senior deputy accountant general Avi Dor, is expected to include prerequisites of experience in construction operation and maintenance of solar powered stations, in addition to financial capability.

Competitors that meet these prerequisites will be invited by the committee to submit offers.

As reported in recent months, the tender has attracted a great deal of interest from leading energy firms worldwide. Representatives of most of these have already visited Israel to review details of the upcoming tender. Israeli companies are expected to participate in the project, mainly in the capacity of construction contractors.

The tenders are a realization of the promise made by National Infrastructures Minister Benjamin (Fuad) Ben-Eliezer to produce 2,000 megawatts of renewable energy by the year 2020.

"The solar tender at Ashalim is a keystone in the ministry's policy to introduce renewable energy sources into Israel" Ben-Eliezer said Wednesday, speaking from Washington where he is attending a conference on renewable energy.

The tender will lead Israel into an era in which the use of renewable energy and reduction of pollutants will be necessities, he explained.

Treasury accountant general Shuki Oren said that this constitutes the largest ever public-private partnership (PPP) tender issued by the state in the energy sector.

"In light of the success of other PPP projects, and with the lessons learned, this is the most suitable mechanism for such a complex project" added Oren.