Energiya Makes Headlines in Atlanta

By Trevor Williams

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In 2006, Yosef Abramowitz and his wife, a rabbi, brought their five kids to a southern Israeli kibbutz for a writing sabbatical.

Accosted by the blinding sun upon arrival, he instead got a bright idea that would lead to the first commercial solar farms in that country and - as of this month - in East Africa.

While solar energy seemed like a no-brainer inIsrael given its innovation culture, sunny climate and relative dearth of resources, its complex regulatory environment had gotten in the way. That’s in spite of the fact that Israeli company Luz (now BrightSource) helped develop the first solar farms in California in the 1980s.

Mr. Abramowitz and his team spent five years lobbying the Israeli government to untangle that web. Arava Power was born, raising four rounds of funding from friends and family - including some Atlanta investors - before Siemens put in $15 million.

Jerusalem-based Arava has built seven solar fields with $300 million in assets deployed and has plans for another $1 billion in projects over the next three years if delayed legislation comes through.

“What we specialize in is new markets. That’s what we do. We know how to de-risk and get the first fields done,” Mr. Abramowitz said.

After the first solar fields in Israel went up, representatives from 58 countries asked Arava for assistance in “greening their grids,” Mr. Abramowitz told Global Atlanta.

That led to the formation of the company’s international arm, Energiya Global, which is exporting its “battle-tested” business model around the world, starting with developing countries where some of the world’s poorest consumers pay the highest prices for the dirtiest energy sources.

Naturally that starts with Africa, a region where Mr. Abramowitz says U.S.-Israeli collaboration is poised to intensify in the coming years as both countries seek out new sources of growth.

In June, Mr. Abramowitz accompanied Foreign Minister Avigdor Liberman on a tour of Africa, where he pitched innovations from the “Start-Up Nation” as cures for some of Africa’s biggest economic hurdles.

"Only 3 percent of our trade is currently with Africa, and that’s about to change dramatically. We as a country are doing a pivot to Africa,” Mr. Abramowitz said.

The continent is home to six of the 10 fastest growing economies in the world, but some 600 million Africans still live without power.

“There’s no way to grow your economy out of poverty if you can’t generate education, health care, employment, and all of those are dependent on electricity,” Mr. Abramowitz told Global Atlanta in an interview at the America Israel Business Connector’s annual professional seminar in Atlanta.

There’s a change afoot in the global development community, he said.

“Finally, I think the NGOs are realizing that there’s not enough charity worldwide to scale solutions. They can find solutions, they can pilot solutions and they can do lots of good things, but there’s not enough money to electrify Africa as a nonprofit,” he said.

Governments are also taking a more strategic approach, as evidenced by last year’s launch of the Power Africa initiative and its revamp earlier this month at the U.S.-African Leaders Summit in Washington.

At the summit, leaders announced $12 billion more in funding from private sources and the World Bank, bringing the Power Africa total to $20 billion and upping its goal by 20 percent to serving 60 million Africans with power for the first time. Energy giant GEannounced that it would invest $2 billion in Africa by 2018.

An OPIC grant was key to getting an Energiya project in Rwanda off the ground. Launched this month as the first sub-Saharan solar field outside South Africa, the 8.5-megawatt project accounts for 8 percent of the country’s grid capacity.

Investors like Norfund, Norway’s sovereign wealth fund, are protected by U.S. and World Bank insurance policies. A power-purchase contract with the national utility will provide a fixed return, but it will also generate steady income over 25 years for the Agahozo-Shalom Youth Village, which provides medical care for 500 orphans of the Rwandan genocide.

That humanitarian angle is part of Energiya’s "quadruple bottom line,” Mr. Abramowitz said. In addition to making money, the company seeks to benefit the environment, bolster communities and project an image of Israel as an “emerging superpower of goodness” that exports solutions on the world’s most intractable humanitarian problems: water, medicine, energy and agriculture.

Burundi’s government has expressed interest in Energiya’s model, and the company is looking at other locations in East and West Africa, along with the Caribbean. It makes the most sense in places using expensive diesel, which Mr. Abramowitz calls “evil power.” In those places, grid parity - the point at which the cost of renewables per kilowatt hour equals that of traditional sources - comes much more quickly than the U.S., where energy is cheap and abundant. The U.S. has more than 3,300 megawatts of power per million people, compared to 91 in Africa.

But the U.S. is also a growing market, and Energiya USA has its focus on Southeastern states like North Carolina and Georgia.

In fact, ​it was two Georgians who made the decision to install solar panels on the White House in the 1970s,​ ​a move that ​​inspired Mr. Abramowitz about the symbolic power of solar. Now a mentor of Mr. Abramowitz, Atlanta-born Ambassador Stuart Eizenstat was the one who took the idea to then-President Jimmy Carter. ​

David Herskovits, CEO of Energiya’s U.S. arm, acknowledged that regulations toward renewables are still evolving in the U.S. Each state has its own policies, and sometimes multiple utilities create disparate markets within a state. The federal tax credit for residential solar is set to decrease to 10 percent from 30 percent in 2016, but with costs of panels decreasing and EPA limits on carbon coming into effect, companies are preparing for the day when grid parity makes solar a preferred choice.

Mr. Abramowitz said a true accounting of the cost of carbon can close the gap even further.

"I believe that it takes the global village to raise the solar revolution,” he said.

He called on the U.S. to lead in the transition to renewables, aided by Israeli innovations like the solar-powered robots that automatically clean the panels at Kibbutz Ketura, the location of Arava’s first solar field. The company also has methods for securing solar fields, which becomes more important in more volatile locations.

“We will commercialize Israeli innovations and bring them to the global markets. That will give us as a solar developer an advantage, and that will bring benefits to those states and countries that sign with us.”

Energiya is seeking investors from Atlanta and beyond.

http://www.globalatlanta.com/article/27125/israeli-solar-firm-shines-light-on-africa/

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