Israel Infrastructure Rehabilitation Plans in Wake of Israel-Hamas War
Israel’s Infrastructure Rehabilitation to Focus on Energy, Housing and Environment
On October 7, 2023, terrorist organization Hamas initiated an unprecedented attack on Israel, which led to Israel launching a counteroffensive against Hamas named “Operation Swords of Iron”, or the “Israel-Hamas War”.
While the war is focused primarily around the Gaza strip area (south of Israel), a wider regional conflict intensified with other Iran-proxies. This includes increased attacks by Lebanese terrorist organization Hezbollah (north of Israel), and, more recently, by Yemen’s Houthi rebel movement who is attacking international cargo ships in the Red Sea (who it claimed were linked to Israel).
As a result of the war, hundreds of thousands of Israeli citizens in northern and southern Israel were evacuated from their homes, and significant damage was done to infrastructure. This market intelligence report focuses on the Israeli government’s infrastructure plans for southern Israel, and specifically around the Gaza Envelope, a district bordering the Gaza Strip, and one of the areas most impacted from the war, both in human casualties and damage to infrastructure.
As part of the Israeli government’s efforts to rehabilitate the Gaza Envelope area, it renamed it as the “Revival District”. Other than the symbolic rebranding of its name, the Israeli government also appointed a new directorate in charge of its rehabilitation and approved an unprecedented budget of NIS 18 billion (~$5 billion) for this purpose.
While the government directorate is still shaping its 5-year work plan, some preliminary objectives and priority sectors were already identified in Government Decision #1127 of December 10, 2023, and in initial reports published by relevant ministries (such as the Ministry of Energy & Infrastructure, and the Ministry of Environmental Protection).
Below is a non-exhaustive list of priorities defined to date which U.S. companies may be able to succor:
Energy – a few weeks after the war started, the Israeli Ministry of Energy published a preliminary report mapping its vision for the Revival District. The report focuses on three key objectives:
a. Promoting energy independence and stability by enabling the region to function as a standalone “electric island”, through developing local renewable energy projects, energy storage and micro-grids. The Ministry quoted a goal of 5GW renewable energy production by 2030.
b. Fostering clean, sustainable, and net-zero energy building, through green buildings, energy efficiency, waste to energy recycling, wastewater treatment plants, and charging stations for electric vehicles.
c. Positioning the region as an R&D and innovation hub, with a focus on clean energy and supporting technological industry such as manufacturing of solar panels, batteries, bio-fuels, EV’s, etc.
Housing – most of the Revival District residents have been evacuated from their homes and are living in temporary residences such as hotels or campervan sites. The Israeli government is looking to rebuild the damaged homes and repair the infrastructure as soon as possible. As a short-term solution, the government procured and is likely to procure more prefabricated houses. Other than housing, residents in the area need shelters to protect themselves from rocket attacks (note: while by law all new buildings in Israel are required to include a shelter, this is even more crucial for cities adjacent to the Israeli borders). Further, the Israeli government is considering modifying the specifications for shelters in the area to also serve as safe rooms, so as to enable protection not only from rockets but also from invasion of terrorists.
Environment – the Ministry of Environmental Protection published a long-term strategy entitled “Green South”. This strategy includes large scale projects such as green building, transitioning to zero landfill of municipal waste, establishing new waste sorting and recycling plants (including waste-to-energy and agricultural waste), treatment of contaminated lands, and more. The Ministry’s plan is estimated to cost NIS 130 million (~$35 million USD), of which NIS 84 million is already approved.
As mentioned, the above is only a preliminary overview of the government’s plans. In Q1 of 2024 a more detailed work plan will likely be released, including international tenders.
Top five reasons why U.S. companies should consider exporting to Israel:
- U.S.-Israel Free Trade Agreement (FTA), signed in 1985.
- The U.S. is Israel’s single largest trading partner. The Israeli business sector and government are highly receptive to U.S. products and services.
- Israel is the second largest trading partner for the U.S. in the Middle East.
- Despite regional geopolitical challenges, Israel has a stable, strong economy.
- Israel has a thriving innovation ecosystem and is a global leader in the number of startups outside of Silicon Valley.
U.S. companies with relevant experience are encouraged to contact the U.S. Commercial Service in Israel for additional information: Naama.Altman@trade.gov.