Siemens Investing $15M in Israeli Solar Power Company Arava

30 August 2009

Siemens is investing US$15 million in Arava Power Company, the Israeli market leader in developing photovoltaic power plants. The investment gives Siemens a 40% stake in the company.

The investment is aimed at constructing the solar fields with a significant proportion of Siemens know-how, delivering technology, e.g. inverter and transformers, ensuring new projects for the group. As Engineering Procurement Construction (EPC) contractor, Siemens will handle project management including engineering and construction of the photovoltaic plants.

Overall, Siemens has concluded a framework agreement to build solar plants with a total output of 40 megawatts (MW). The first project will be the construction of a plant with an output of up to 4.9 MW at Kibbutz Ketura, in the southern desert of Israel. Additional photovoltaic plants are already being planned for the Negev and Arava deserts and Israel’s aim is to meet around ten percent of its total energy needs with renewable energy plants by 2020.

Arava Power, the Israeli development company, was founded in 2006 and is headquartered at Kibbutz Ketura/Eilat. The company, with some 20 employees, is a subsidiary of Global Sun Power Ltd. Siemens is investing in Arava Power through its equity investment company Siemens Project Ventures GmbH (SPV).

The equity investment in Arava Power Company is a further move to strengthen the Siemens Environmental Portfolio. In fiscal 2008, Siemens’ environmental technologies generated revenue of nearly €19 billion, roughly one-quarter of the company’s total. By 2010, the company intends to increase the share of environmental technologies to around €25 billion.

Siemens announced in July that it is participating in the Desertec industrial initiative. Siemens is developing here together with other industrial companies on a technological and financial concept for providing clean power for Europe and Africa from solar-thermal power plants in the Sahara and wind farms in northern Africa.

Announced on 13 July, Desertec Industrial Initiative (DII), developed by the TREC Initiative of the Club of Rome, describes the perspectives of a sustainable power supply for all regions of the world with access to the energy potential of deserts. In addition to Siemens, the founder companies of the DII, whose regional focus is on Europe, the Middle East and North Africa (MENA), are: ABB; Abengoa Solar; Cevital Deutsche Bank; E.ON; HSH Nordbank; MAN Solar Millennium; Munich Re; M+W Zander; RWE; and Schott Solar.