Ashdod losses take the shine off Mekorot IPO revival

Published February 8th, 2018

After a lengthy delay, Israel’s Government-owned Corporations Authority has revived a plan to move ahead with the partial privatisation of state bulk water supplier Mekorot.

Initial approval of the sale of a minority stake was granted back in October 2014, and Israel’s Energy and Water Resources Ministry – which oversees Mekorot – has now made it clear that it has no objections in principle to the plan to sell off a stake in the water company.

Despite this, Energy and Water Ministry director general Udi Adiri suggested that Mekorot should first raise funds through a bond issue, which would require it to report results on a quarterly basis.

At present, Mekorot’s results are issued annually: in 2016, it reported a loss of $59.6 million on revenues of $1.157 billion. The loss was attributed to problems with the Ashdod desalination plant, and this is expected to lead to even higher losses in 2017.