Profiting From Israel’s Renewable Energy Boom

We’ve been tracking the flow of dollars and shekels into Israeli clean energy ventures for years now, looking for opportunities. This week, a multi-million dollar deal may have signaled the start of a profit chain reaction. Here’s how a few listed companies will benefit.

Israel Corp. is the New Jersey-sized country’s largest holding company, specializing in chemicals and fertilizers, but also diversified into energy, shipping, and transportation investments.

And as you know, companies from BP (BP) to GE (GE) are moving billions of bucks into renewable power and related technologies to get a leg up and out of the fossil fuel economy.

So it’s not surprising that in Israel, where I reported last year on a slew of start-ups in solar, desalination, cleantech and even algal fuel, the conglomerate Israel Corp is kicking off an investment spree.

HelioFocus, founded just a year ago in the Israeli town of Nes Tziona, got a more than $5 million shot in the arm this week from Israel Corp.’s renewable energy arm.

Israel Corp., for its part, has launched a division called IC Green Energy to spread money into lucrative renewable power ventures. As is the case with many Israeli start-ups, the science behind HelioFocus was incubated in the military’s high-tech training environment and in the Weizmann Institute of Science located in the country’s center.

These high-tech hotbeds led directly to the development of instant messaging, major biotech advances, and caused Intel to build its largest international R&D center just outside of Haifa in the north.

Perhaps most impressive, Israeli entrepreneur Shai Agassi is joining with national leaders in making Israel a pioneer in electric cars, with Project Better Place.

Israel Corporation Green Energy

So Major General (res.) Yom-Tov Samia is leading IC Green Energy by seeking out investment targets all around Israel’s booming green industry, tapping into Israel’s small-country, big-idea atmosphere…

Why is Samia going after HelioFocus? Well, in its short lifetime, HelioFocus has already made a name for itself by building systems that harness and convert concentrated solar power (CSP) into household electricity.

That short time to success is explained by the important business minds leading HelioFocus. Co-founder Sasson Somekh previously served as a senior manager at Applied Materials, and Weizmann Institute Professor Jacob Karni says HelioFocus’s technology has been in the works on campus since 1990.

From potential biodiesel and ethanol heavyweights like Algatech to solar companies such as HelioFocus, Maj. Gen. Samia has loads of Israel Corp.’s loot to dispense, and a plethora of local engineers and scientists are eager to attract IC Green Energy’s money and credibility.

But it won’t just be Tel Aviv-listed Israel Corp. that profits as HelioFocus and other Israeli renewable energy firms grow.

Capstone Turbine Corporation (CPST) leads the world in cleantech microturbine systems, and in late July Capstone and HelioFocus closed a deal for modified turbines that will run on concentrated solar energy.

Capstone has been a top gainer in the Alternative Energy Trader portfolio, as subscribers got in for just $1.50 a share. CPST is now trading at around $2.75 after rising as high as $4.32 this July, but AET readers are still sitting pretty.

As Capstone’s Executive Vice President Mark Gilbreth says of the HelioFocus partnership, “This combined system leverages existing Captone technology and continues to broaden the range of renewable fuels that are able to power our microturbines.”

With majority control now in the hands of Israel Corporation, more money should flow through HelioFocus to Capstone, and Capstone will benefit from the ongoing relationship with IC Green Energy.

IC Green Energy’s momentum will just continue to build as time goes on, and from Tel Aviv to Wall Street, we’re keeping an eye on the top stock plays that will ride that current of renewable energy investment flowing through Israel.

Subscribe by RSS Subscribe by Email