Siemens (NYSE: SI) is investing $15 million in Arava Power Company, an Israeli developer of solar power plants.
An agreement was signed Thursday, securing Siemens a 40% stake in the company.
Arava Power develops, builds and operates photovoltaic plants in Israel.
“This investment is another consequential step in further strengthening our green and sustainable technologies,” said Peter Lo?scher, President and CEO of Siemens AG. “Thanks to its intensive sunshine and steadily growing demand for energy, Israel is an ideal location for further developing our solar business.”
Siemens said the equity investment will make it possible to build Israel’s first commercial solar farms–to be located in the region between the Dead Sea and the Red Sea.
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 10% 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.
In February, The Jerusalem Post reported that Arava planned to build an 80-MW photovoltaic power plant.
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