Siemens, the German industrial giant, is investing $15 million in Arava Power, the Israeli market leader in developing solar power plants.

The agreement signed at Kibbutz Ketura in the Arava tod secures Siemens with a 40 percent stake in the company. Arava Power develops, builds and operates photovoltaic plants in Israel.

"This investment is another consequential step in further strengthening our green and sustainable technologies," said Peter Löscher, President and CEO of Siemens AG. "Thanks to its intensive sunshine and steadily growing demand for energy, Israel is an ideal location for further developing our solar business."

The equity investment will make it possible to build Israel's first commercial solar farms - to be located in the region between the southern Dead Sea and the Red Sea.

The investment is also aimed at constructing the solar fields with a significant proportion of Siemens know-how, delivering technology, e.g. inverter and transformers, ensuring new projects for the group.

As Engineering Procurement Construction (EPC) contractor, Siemens will handle project management including engineering and construction of the photovoltaic plants.

Overall, Siemens has concluded a framework agreement to build solar plants with a total output of 40 megawatts (MW). The first project will be the construction of a plant with an output of up to 4.9 MW at Kibbutz Ketura, in the southern desert of Israel. Additional photovoltaic plants are already being planned for the Negev and Arava deserts and Israel's aim is to meet around ten percent of its total energy needs with renewable energy plants by 2020.

Arava Power, the Israeli development company, was founded in 2006 and is headquartered at Kibbutz Ketura/Eilat. The company, with some 20 employees, is a subsidiary of Global Sun Power G.P. Ltd.

Siemens is investing in Arava Power through its equity investment company Siemens Project Ventures GmbH (SPV).

"This is the most comprehensive foreign investment to date for an Israeli solar energy firm," said Johannes Schmidt, CEO of the Equity & Project Finance unit of Siemens Financial Services. "Through its early and extensive engagement in the field, Arava Power has developed into Israel's leading solar energy company. Siemens will be supporting local solar projects with our full range of technologies, know-how and finance."

The equity investment in Arava Power Company is a further move to strengthen the Siemens Environmental Portfolio. In fiscal 2008, Siemens' environmental technologies generated revenue of nearly €19 billion, roughly one-quarter of the company's total. By 2010, the company intends to increase the share of environmental technologies to around €25 billion.

"Siemens is the ideal partner for Arava Power and our property partners for winning over others interested in producing solar energy in Israel," said Jonathan Cohen, CEO of Arava Power. "Our strategic partnership will make it possible for our country to reach its ambitious goals of clean air and renewable energy even faster."

Siemens announced in July that it is participating in the Desertec industrial initiative. Siemens is developing here together with other industrial companies on a technological and financial concept for providing clean power for Europe from solar-thermal power plants in the Sahara and wind farms in northern Africa and transporting it to Europe.

Founded by a group of visionaries at Kibbutz Ketura and founded in 2006, Arava Power, seeks to supply 10% of Israel's electricity needs with the development of solar energy plants with Kibbutzim, Moshavim and other land owners, especially in the south of Israel. Arava Power is a pioneer in solar power in Israel with agreements with land owners and is the first and only solar developer in Israel with a commercial solar license, appropriately-zoned land and a building permit to construct a solar field. The company is owned by Global Sun Partners a partnership with Kibbutz Ketura and American Investors led by the company President Yosef Abramowitz. The chairman is Ed Hofland and the Vice Chairman is David Rosenblatt, and the three are founders of Arava Power.