WESTERN GALILEE DESALINATION PLANT

The project will finance the design, construction and operation of a sea-water desalination facility, with production capabilities of 100 million m3 per annum to be located in Western Galilee, Israel.

The project iaims to ensure access to water, with significant climate change adaptation and mitigation impact, to address persistent droughts and increased demand for water in the country.

The project concerns the construction of a seawater reverse osmosis desalination plant under a Build Operate and Transfer contract in Israel. The project is a high priority water supply infrastructure aimed at ensuring access to water in one of the world's most water stressed region. The project will contribute to meeting the Bank's policy objectives of Sustainable Energy and Natural Resources as well as Climate Action and Environmental Sustainability. The project will address a number of market failures through positive externalities notably from public health benefits, the protection and replenishment of over drafted groundwaters and an increased resilience to extreme weather events. By providing sustainable and reliable access to water in Israel, the project is aligned with the Strategic Priorities of the European Neighbourhood Instrument (ENI) and the latest EU/Israel Action Plan, which aim, among others, at promoting cooperation between Israel and the EU in reducing water pollution, protecting water resources and increasing the re-use of water.

In terms of financial contribution, the EIB is expected to offer attractive and customised financing terms, which will increase the sustainability and ultimately lower the water desalination cost. The EIB loan contributes to the diversification of borrower's funding in terms of maturity profile, financier base as well as to the optimisation of the capital structure.

A combined environmental impact assessment for the proposed Western Galilee desalination plant has already been carried out by the promoter. The EIB shall ensure that it complies with the EIB's Environmental and Social standards and safeguards.

The project is procured under a public-private partnership (PPP) contract that includes a concession to build and maintain the facility for 25 years. The promoter has to ensure that implementation of the project will be done in accordance with the EIB's Guide to Procurement. The borrower of the proposed EIB loan is the PPP winning bidder.