Arava Power’s SUNRAY project begins commercial operation

The project marks Arava’s first foray into the US, which was developed with Israel’s leading oil and gas retailer, Paz Group, and funded in partnership with Israeli insurance company, Menora Mivtachim, at a total cost of US$330 million.

Project SUNRAY spans an area of approximately 1200 acres and is leased for a cumulative period of 50 years. It includes over 500 000 solar panels and is expected to produce 515 GWh/y of electricity. The result will prevent the emission of 225 000 t of carbon dioxide and provide clean electricity to 43 000 homes in the San Antonio area each year. The SUNRAY project sells 50% of the generated electricity under a 12-year power purchase agreement, and the remaining half is sold on the merchant electricity market in Texas.

“Project SUNRAY is the result of great partners and collaboration with tremendous institutions from the United States, Israel and globally. For Arava Power Company, this isn't just about breaking new ground in the US – it's about demonstrating the power of our platform from development through asset management over our history and across geographies,” said David Rosenblatt, Co-Founder of Arava Power. “Arava Power's first project in the US is a testament to our commitment to quality work and represents the growth we are undertaking.”

Rosenblatt co-founded Arava Power in 2008 with Ed Hofland.

Arava Power and Paz Group began developing the SUNRAY project in 2021, after acquiring it from OCI Energy. They completed financial closing in 2023 and as of last month, finished the construction work and received approval for commercial operation.

“We succeeded in developing our first US project under extremely challenging market conditions,” added Ilan Zidkony, CEO of Arava Power “Over the past few years, our team had to contend with regulatory upheavals, an almost unprecedented inflationary environment, and a complex financing landscape. Our company is proud of this achievement and are grateful for the confidence of top-tier partners and financiers. The commercial operation of SUNRAY is a key milestone in Arava Power’s US vision, with a portfolio of projects in various stages of development totalling 1.3 GW across the US.”

The project raised US$215 million in construction financing fully underwritten by Nomura Securities International, Inc. and US$70 million in senior debt, provided by a consortium led by Nomura and including Bank Ha’poalim and BHI (the US arm of Ha’poalim). Morgan Stanley serves as the Tax Equity partner in the project and together with an additional investor made an investment of approximately US$150 million.

“Nomura is pleased to support Arava and Paz Group as they enter the US mar-ket and assist in working towards achieving a carbon-free grid,” commented Vinod Mukani, Global Head of Nomura Infrastructure and Power Business (IPB). “Enabling capital formation for these infrastructure assets, along with supporting developers like Arava and Paz Group through multiple parts of the transaction lifecycle from inception to term conversion, is a core part of Nomura’s strategy. We are excited to see this project move forward.”

Alain Halimi, Managing Director, Nomura’s IPB, concluded: “Nomura is pleased once again to support Arava Power, Paz and Menora for the swift construction and term conversion of the SUNRAY project in Texas. We are privileged to play a leadership role in this important and groundbreaking financing for the project.”

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