Netanyahu, a Billionaire’s Startup - and the Funding of a Big Gaza Water Project

Michael Mirilashvili’s Watergen firm was given access by Netanyahu to UN Secretary General Guterres

Gazans go to great lengths to get water during an ongoing water crisis.
AP / Khalil Hamra

Watergen, a company controlled by Israeli-Georgian billionaire Michael Mirilashvili, made a presentation to the UN secretary general at an event hosted by Prime Minister Benjamin Netanyahu. This was at a time when the company was looking for financing for an ambitious project designed to supply water to the residents of the Gaza Strip, as part of a contract it had with an international organization. Mirilashvili’s son Yitzhak is a controlling shareholder of Israel’s Channel 20, which is an open and prominent supporter of Netanyahu.

A week and a half ago, TheMarker ran an extensive story about Watergen, which has developed a technology that enables the condensing of water from air vapors. This water can then be used for drinking. The company has received a particularly warm reception from Netanyahu, with a raft of business opportunities coming its way thanks to the prime minister. This included the chance to present its technology to UN Secretary General Antonio Guterres when he visited Israel in August.

The Water-Gen "atmospheric water generator"

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It now turns out that at the same time Watergen was being presented to Guterres, it was under contract with the Shuruq initiative, a project sponsored by the Middle East Quartet (consisting of the United Nations, United States, European Union and Russia) and also involving an ambitious plan to provide drinking water to Gaza. Apparently, the meeting with Guterres was intended not only to allow him a peek at the wonders of Israeli technology. The presentation delivered by Watergen under Netanyahu’s auspices was an attempt to raise money for a concrete project, with a timetable and clear business plan, potentially costing $100 million.

As reported by TheMarker, in the presentation, Watergen’s executive chairman Maxim Pasik noted that he had approached the secretary general in writing, asking that the United Nations consider running a joint project in Gaza, through the UN Relief and Works Agency for Palestine refugees.

A thousand of the company’s devices will solve the problem, Pasik claimed in his presentation to Guterres and Netanyahu. How much does one unit cost? asked Netanyahu. $120,000, Pasik replied. The prime minister grabbed a pen and paper, scribbled something down and said: That’s $120 million. Pasik added that this could completely solve Gaza’s water problem.

The Shuruq initiative is a non-profit organization founded by Kito de Boer, who headed the office of the Middle East Quartet’s mission office. Shuruq (sunrise in Arabic) was intended to promote a public-private partnership, recruiting private entrepreneurs and capital to solve the serious infrastructure problems in Gaza and the West Bank. The deal between Watergen and Shuruq was signed in early 2017. Sources reached by TheMarker confirmed that the establishment of the link between Watergen and Shuruq was facilitated by the Quartet and Israel’s Foreign Ministry. The Quartet and Shuruq were interested in maintaining a low profile over this connection, concerned perhaps about negative public opinion among Palestinians who would not view giving business to an Israeli company favorably.

Michael Mirilashvili.

In presentations and other documents, Shuruq dubbed the project Air2Water, and Watergen was mentioned only as an example of companies developing the technology for condensing air vapor for drinking purposes. The documents specify that the project would be carried out through the granting of franchises to local Gaza entrepreneurs. From a presentation obtained by TheMarker, it is not clear whether the project’s long-term vision was to supply drinking water for all of Gaza’s residents, but from Pasik’s comments it is clear that this was Watergen’s goal. Pasik was given access by Netanyahu to Guterres at the same time that Watergen and Shuruq were trying to find a funder for the project.

Antonio Guterres
Andrew Harrer/Bloomberg

Another document states that “this initiative concords with the official Palestinian water policy” (it’s not clear if this refers to Hamas or Palestinian Authority policies). The presentation adds that Shuruq intends to conduct a pilot program at a hospital and a school in Gaza, something that requires coordination with the Hamas government in Gaza.

Coordination with Israel is also required for this project. The document also notes that government approval is required for bringing the necessary materials into Gaza, meaning permits from Israel, which imposes restrictions on such materials out of concern that items such as metal will ultimately be used for terrorist attacks against Israel. As far as is known, the project never proceeded beyond the pilot stage. Watergen would not provide details, but said: “We did not ask Netanyahu for anything.”

Arye Kohavi.
Eyal Toueg

The prime minister provided the following response for this article: “There are those who produce water from air and others who manufacture only hot air. TheMarker is again presenting only partial and slanted information, trying by force to connect imaginary dots. Again they aren’t reporting that in those meetings and in other forums, the prime minster often proudly presents many Israeli companies that have produced technological and imaginative breakthroughs, showcasing them as examples of exceptional Israeli entrepreneurship and inventiveness.”

Arye Kohavi, the founder and CEO of Watergen, responded: “In a survey conducted by the Economy Ministry in honor of Israel’s 70th anniversary, Watergen was chosen as one of the nine greatest inventions in the country’s history. This choice is in addition to a host of praise given the company by leading global magazines. The reason is simple: the innovative technology in producing water from air is unique in its ability to very effectively provide drinking water, at a very low cost. That is why Israel’s leaders and senior officials take pride in our technology in international forums. In that regard, we should note that we never approached the prime minister or any of his people with any requests, neither directly nor indirectly.”