German engineering conglomerate Siemens has agreed to acquire a 40 percent stake in Israeli solar power plant developer Arava Power.
Siemens is to invest $15 million of equity in the firm, through its investment company Siemens Project Ventures.
Arava Power is the market-leading developer of solar power plants in Israel. Siemens said its investment will enable Arava to develop the first commercial solar farms in Israel, which will be located between the southern Dead Sea and the Red Sea. Following the investment, Siemens will handle the project management, engineering and construction of Arava’s new photovoltaic plants.
Siemens and Arava Power have signed a framework agreement to build solar plants with a total output of 40 megawatts. The first of these projects will be the development of a 4.9 megawatt plant at Kibbutz Ketura in Israel’s southern desert.
Arava Power is a subsidiary of Global Sun Power G.P. and was established in 2006. It has around 20 employees.
Israel is looking to meet around 10 percent of its energy needs with renewable energy plants by 2020.
In 2008 Siemen’s environmental technologies business represented around a quarter of the group’s revenue, or €19 billion. The company said it intends to increase this to €25 billion by 2010.
Siemens is one of a number of companies involved in a study into the DESERTEC initiative, a proposed project to develop vast solar plants in the Sahara desert to supply a significant portion of Europe’s electricity. The cost of the scheme, which has been earmarked for completion by 2050, could top $560 billion.