October 29, 2007 / 7:39 PM / in 10 years

INTERVIEW-Israel Corp eyes partners for electric car venture

By Michele Gershberg

NEW YORK, Oct 29 (Reuters) - The executives behind a new venture to build electric car recharging grids in cities worldwide are in talks with automakers and related companies to cooperate on the project and help reduce reliance on fossil fuel.

Shai Agassi, a former software products chief at SAP, and Idan Ofer, chairman of the Israel Corp (ILCO.TA) holding company, are leading the venture, called Project Better Place.

The project will create a grid of electric charging spots for cars at parking areas and battery exchange stations to prevent drivers from running out of electricity.

“We are already investing in alternative energies from the simple realization that we are depleting the planet’s resources,” Ofer told Reuters in an interview.

“There’s obviously good business reasons for it, but there is also a deeper understanding of what’s happening,” said Ofer, who serves as the venture’s chairman. “I see a lot of potential partners for us.”

The venture is in talks with companies like France’s Renault SA (RENA.PA), as well as others in China, Japan and elsewhere in Europe, Ofer said. Ofer did not provide details on other companies involved. A spokeswoman at Renault had no comment.

Israel Corp’s holdings span chemicals, energy, shipping and semiconductor companies.

Israel Corp said in August it planned to invest $100 million for 33 percent of the rights in the Better Place venture, toward a total of $200 million in financing sought for the project’s initial phase.

The venture said on Monday it had secured the additional financing from Morgan Stanley (MS.N), VantagePoint Venture Partners and investors such as Edgar Bronfman Sr. and James Wolfensohn. The project also is being supported by Israeli President Shimon Peres.


Agassi, who stepped down as the head of SAP’s (SAPG.DE) software products division in March, said he formulated the idea when asked in a leadership meeting what he could do to make the world a better place. He will serve as chief executive of the new entity.

“When you drive to the edge of a canyon, you have two choices,” he said, referring to the depletion of the world’s natural fuel resources. “We’re trying to build a bridge.”

Israel Corp. has a separate joint venture with China’s Chery Automobile Co., which will likely build electrical cars for the project. But the venture has no plans to create an Israeli manufacturing facility, Ofer said.

Israel offers an opportunity to test such a grid based on size and tax incentives already in place for cars with lower carbon emission rates, Agassi said.

But the aim is to test such grids in many countries, beginning in early 2008 and achieve significant saturation in its first markets within 10 years.

    “There are a lot of countries we are looking at that are transportation islands -- Singapore and the UK,” Agassi said. “You’ll see us in lots of different countries with lots of local partnerships. We’re not looking for an exclusive play.”

    On a separate note, Ofer said Israel Corp was satisfied with the performance of its majority-owned chemicals manufacturer Israel Chemicals Ltd (ICL.TA) and does not plan an overseas float to the Tel Aviv-listed company.

    “There’s no particular need for us to go to list in another country,” he said. “I think we’re getting enough interest in the company as it is from overseas buyers.”

    ICL shares have gained more than 64 percent since the start of the year on surging demand and prices for the potash and phosphates it produces.

    Israel Corp owns 52.2 percent of ICL, while Potash Corp of Saskatchewan (POT.TO) (POT.N) owns just over 10 percent. Shares of ICL rose 2.8 percent to 43.80 shekels ($11) on Monday. It has a market capitalization of $13.8 billion.

    ($1=3.98 shekels)

    (Additional reporting by Tova Cohen in Tel Aviv)

    ((Editing by Brian Moss; Reuters Messaging: michele.gershberg.reuters.com@reuters.net; michele.gershberg@reuters.com; +1 646 223 6185)) Keywords: ISRAELCORP VENTURE/

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