Oil Report

Israel group gets financing for desalination plant

TEL AVIV, May 22 (Reuters) - The H2ID group said on Thursday it has completed an agreement to receive 1.5 billion shekels ($450 million) in financing for a desalination plant in Israel from a consortium of foreign banks.

The European Investment Bank will provide 50 percent of the financing, while Calyon, the investment banking arm of French bank Credit Agricole CAGR.PA, and Portugal's Banco Espirito Santo ESTL.LU will split the rest.

The desalination plant, to be built in the coastal town of Hadera, will provide 100 million cubic metres of drinking water a year at a cost of 2.56 shekels per cubic metre.

Israel already has another two desalination plants which produce a combined 130 million cubic metres.

National Infrastructure Minister Binyamin Ben-Eliezer said he will submit a plan to the government on Sunday to increase the annual amount of water desalinated to 750 million cubic metres.

In late 2006 H2ID, which consists of Housing and Construction Holding Co HUCN.TA, Israel's biggest construction company, and IDE Technologies, won a tender to build the 1.5 billion shekels plant. IDE is jointly owned by Israel Chemicals ICL.TA and the Delek Group DELKG.TA conglomerate. ($1 = 3.335 shekels) (Reporting by Tova Cohen, editing by Will Waterman)