Bezeq enters power supply market

Telecommunications company Bezeq and Generation Capital are forming a joint venture to produce and supply electricity for homes and small businesses.

Telecommunications company Bezeq (TASE: BEZQ) and infrastructure investment fund Generation Capital (TASE: GNRS) have announced a memorandum of understanding (MOU) on collaboration between Bezeq and Generation Capital subsidiary PowerGen in forming a company jointly owned in equal parts to supply electricity to domestic and small business customers.

The MOU comes at a time when Dalia Energy Companies (TASE: DLIA) is nearing the financial closing of its purchase of the Eshkol power station in Ashdod for NIS 9 billion, a deal that will end Israel Electric Corporation’s monopoly status in the power production segment, as called for in the 2018 power industry reform. Bezeq and Generation Capital’s joint venture will face stiff competition from major players such as Hot, Partner, Electra, Pazgaz, Amisragas, and Cellcom.

The venture’s target is 400,000 customers by the end of 2030, by which time, according to consultancy BDO, the market share that is expected to switch to Israel Electric Corporation’s competitors will be worth some NIS 10 billion.