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Siemens to invest $15 million in Arava Power

German industrial conglomerate Siemens AG said it will buy a 40 per cent stake in Israeli solar company Arava Power for $15 million.

business Updated: Aug 29, 2009 16:55 IST

German industrial conglomerate Siemens AG said Friday it will buy a 40 per cent stake in Israeli solar company Arava Power for $15 million (euro10.5 million).

Kibbutz Ketura-Eilat-based Arava Power develops, builds and operates photovoltaic plants in Israel and is considered the Israeli market leader, Munich-based Siemens said in a statement. Arava Power is a subsidiary of Global Sun Power Ltd, a partnership between the Kibbutz Ketura and American Investors.

The investment will contribute to Israel building the first commercial solar farms in the region between the Dead Sea and the Red Sea, Siemens said. Siemens will handle project management, including engineering and construction of the photovoltaic plants. So far the two companies have a project framework agreement for a total output of 40 megawatts.

The first project will be the construction of a plant with an output of about 5 MW at Kibbutz Ketura, in the south of the country, while additional photovoltaic plants are being planned for the Negev and Arava deserts. "This investment is another consequential step in further strengthening our green and sustainable technologies," Peter Loescher, Siemens' chief executive said in the statement. "Thanks to its intensive sunshine and steadily growing demand for energy, Israel is an ideal location for further developing our solar business."

Shares of Siemens were up about 1.2 per cent at euro60.94 in Frankfurt morning trading.