Three Israeli companies recently acquired 1.4 GW of European energy projects

Israeli companies in the renewable energy sector are rapidly consolidating their position in the European market, at a time when the continent is going through one of the largest energy transformations in its modern history, according to an article published by the Calcalist website, which shows that, in the last two weeks, three Israeli companies - Econergy, Prime Energy and Sunflower - have signed transactions for the acquisition of energy projects in Europe, with a cumulative capacity of approximately 1.4 gigawatts (GW), the total value of the operations could reach around 575 million euros. Beyond the impressive financial dimension, these transactions confirm a much broader strategic trend: Israel is expanding its influence in the European energy system through massive investments in renewable energy production and energy storage infrastructure.

Roy Shavit, an energy analyst, told the cited source: "Israeli companies find a large market in Europe, with portfolios of projects in advanced stages of development or already generating revenue, mandatory renewable energy targets and the possibility of signing long-term contracts for the sale of electricity. Moreover, an Israeli company can buy in Europe not only installed megawatts, but also local teams, licenses, grid connections, portfolios of future projects and a growth platform in countries such as Spain, Germany, Italy, Poland and France.”

This reality turns the European continent into fertile ground for Israeli companies looking for new growth engines. Unlike the Israeli market, where territorial resources are limited, Europe offers access to vast portfolios of projects in various stages of development, mature energy infrastructure and well-developed financing mechanisms. Moreover, European decarbonization policies and ambitious climate goals generate constant demand for new renewable generation capacities.

Econergy is one of the most relevant examples of this expansion strategy. The company, already active in Italy, Romania, Poland, Germany and the United Kingdom, has decided to expand its presence in France by acquiring a local operator specialized in wind energy. The transaction, valued at 135 million euros, concerns a company that owns 134 megawatts (MW) of operational installations, 34 MW of projects under construction and 147 MW of projects at an advanced stage of development. In total, the French company's portfolio amounts to approximately 800 MW. According to Econergy's estimates, the assets already operational and the projects to be connected to the grid will generate revenues of 26-29 million euros and an EBITDA of 20-22 million euros as early as 2027. Upon completion of the entire portfolio, additional annual revenues could reach 61-67 million euros, while annual EBITDA is estimated at 49-55 million euros.

In parallel, Prime Energy has made its aggressive entry into the European market through an investment in Spain, following the merger with the renewable energy division of the Lahav group. The Israeli company has signed a memorandum of understanding to take over a 62.5% controlling stake in a Spanish company that develops and operates projects in Spain, Italy and Germany. The structure of the transaction is large and foresees phased investments that could reach 350 million euros. The Spanish company already owns a grid-connected power plant with a capacity of 82 MW, as well as 13 additional projects under development, with a total capacity of approximately 400 MW. Even more impressive is its energy storage portfolio, consisting of 79 projects totaling up to 29 GWh. Of these, projects with a capacity of 350 MW and associated storage of 6.7 GWh are expected to be ready for construction by the end of 2028.

Sunflower, for its part, has strengthened its position in Spain through a euro90 million transaction for the acquisition of a portfolio of photovoltaic projects with a capacity of 137 MW. The assets include 85 MW of installations already connected to the grid and generating revenue, while the remaining capacities are due to come into operation in the immediate future. Furthermore, the company estimates that there is additional potential for the development of storage facilities with a capacity of around 500 MW. Following this operation and other projects under negotiation, Sunflower estimates that it will triple its installed capacity by the end of the year, from around 94 MW to almost 300 MW.

The phenomenon is not limited to the three companies involved in the recent transactions. Other major Israeli groups, such as Enlight, Energix, Nofar Energy and Doral, already have significant presences in European markets. Last month, Nofar Energy signed an agreement to develop 860 MWh of storage capacity in Romania, while Tralight submitted a $165 million bid to take control of a European company that owns projects with a total capacity of 2.5 GW and storage systems with 3.8 GWh. Doral also recently completed the acquisition of control of Zephyrus, which operates facilities in Poland with a capacity of 257 MW.

Israeli investors' interest in Europe is also fueled by the geopolitical and economic context. According to Israeli analyst Roy Shavit, "Europe is still in the midst of a major energy transition, with a desire to reduce dependence on gas and oil imports, a mandatory target of at least 42.5% of total energy consumption coming from renewable sources by 2030, and a growing demand for electricity from data centers, industry, electrification of transport and heating systems.”

Russia's invasion of Ukraine has dramatically accelerated this transformation. While renewable energies were previously viewed primarily through the lens of climate objectives, they are now considered essential elements of European energy security. "Renewable energies and storage systems are no longer perceived as just environmental or regulatory tools. They have become an integral part of Europe's energy security concept,” explains the IBI analyst.

Another key element of this new phase is the explosion of investment in energy storage. As solar and wind power gain increasing weight in the European energy mix, production volatility increases, and storage systems become indispensable for the stability of the electricity grid. For this reason, a large part of the recent transactions do not only target classic photovoltaic plants, but also include storage systems or a significant potential for their development.

At the same time, the financial conditions in Europe create additional opportunities for Israeli investors. The increase in interest rates and the difficulties encountered by many European developers have generated an acute need for capital.

"Following the increase in interest rates and the pressure exerted on energy developers in Europe, many local players need capital to bring projects to the Ready to Build or commercial operation stage,” says Roy Shavit, for the cited source. In these conditions, Israeli companies benefit from an important competitive advantage due to their access to capital markets and experience in developing energy projects. "They get a significant shortcut compared to developing projects from scratch, and the sellers receive the capital needed to continue developing other projects. This is also why we are seeing a shift from the acquisition of a single project to the acquisition of entire platforms of activity,” concludes the Israeli energy analyst.

Overall, the offensive of Israeli companies on the European energy market can no longer be seen as a simple series of one-off investments. It is a long-term expansion strategy, which aims to integrate into the continent's energy infrastructure and capitalize on an energy transition estimated at hundreds of billions of euros.