Israel Infrastructure National Private-Public-Partnership Projects

Government of Israel’s Approach to PPP 

The State of Israel faces a notable gap in infrastructure investment relative to its GDP compared to other similar countries (such as the OECD). Israel is consistently among the highest of OECD member countries in population growth rate. In a few years, it is projected to become one of the most densely populated countries in the world. In 2040, 13.2 million people are expected to live in Israel, compared with 9.3 million in 2024. In order to respond to population growth and close its chronic gap in infrastructure investment, it is estimated that an annual investment of approximately 4-5% of GDP will be required until 2035, compared to only 2.5-3% today.

Accordingly, Israel is embarking on an ambitious expansion of investment across many sectors including transportation, energy, water and waste treatment. These tenders tend to attract both domestic and international bidders, who often partner and bid as a consortium, especially in areas where Israel still lacks sufficient local experience.

PPP projects have become increasingly prevalent in Israel in the last two decades. Some of the PPP models implemented in Israel include Private Finance Initiative (PFI), Build, Operate, Transfer (BOT), and Build, Own, Operate (BOO). There are currently 18 PPP projects operating, 5 under construction, and 16 under evaluation and tender phase. The total value of PPP projects under operation and construction is NIS 52 billion (approximately $14.5 billion).

The regulatory framework for PPP project procurement stems primarily from Israel’s Mandatory Tenders Law No. 5752-1992 of 1992 and its Regulations No. 5753-1993 of 1993. The government of Israel has also issued Decision 3012 of September 3, 2017, regarding the multi-annual Infrastructure Development Program in Israel, which broadly outlines considerations when adopting PPP as a method to implement projects and applies to infrastructure projects with an estimated construction cost of more than NIS 250 million (approximately $70 million).

Israeli Government Offices Leading PPP Projects
 

The Ministry of Finance’s Infrastructure and Project Division, part of the Accountant General Department, leads the development of most of Israel’s PPP projects. The division will normally chair the inter-ministerial tendering committees. 

Other relevant stakeholders include ministries such as the Ministry of Transportation or Ministry of Energy, for example, who sit on some of the inter-ministerial committees for projects that fall under their respective industries. Similarly, state-owned companies such as NTA Metropolitan Mass Transit System Ltd are the lead for specific projects under their jurisdiction, such as the Tel Aviv Metro project. 

Roadmap of National PPP Projects
 

Multiple national PPP tenders are expected to be published in the coming years, with a focus on transportation, energy, water, and environment. Below is a list of some of the largest tenders in the pipeline that are currently in the pre-tender and under-evaluation stage:

• Tel Aviv Metro Project (estimated $40 billion)
• New International Airport(s) (estimated $ 1.5-2.5 billion)
• Waste Treatment (by 2033 9 new Waste-to-Energy facilities, estimated $1 billion)
• Emek Hefer Desalination Facility (up to 400 MCM, largest desalination facility in Israel)
• Yavor LPG Storage Facility (and additional LPG and Petroleum Distillates Storage Facilities)
• PV and BESS projects
• Beer Sheva LRT
• Congestion Tax
• New Prison Compound 

Next Steps

Contact U.S. Commercial Service Israel for additional information regarding projects in the pipeline: Naama Myers Altman, Commercial Specialist: Naama.Altman@trade.gov.