Nofar and Cellcom Energy turn storage into an NIS 820 million electricity contract before financing is closed
The 100MW and 500MWh agreement gives Nofar Israel a 15-year revenue path and gives Cellcom Energy a private supply source. The financial-statement path still runs through construction, market-model assignment, daily availability and binding financing after the Leumi memorandum was extended to July 31.
The agreement between Nofar Israel and Cellcom Energy changes how investors should read private storage in Israel. Nofar Israel, 81.25% held by Nofar Energy, agreed to make expected storage capacity of 100MW and 500MWh available and supply stored electricity to Cellcom Energy for 15 years from each facility's supply start. Cellcom Energy, held equally by Cellcom and Meshek Energy, receives a private supply source for its electricity retail business, while Cellcom and Meshek provide limited parent guarantees for part of the obligations. The headline number, about NIS 820 million, is both a net revenue path for Nofar Israel and a payment path for Cellcom Energy over the life of the agreement. This is therefore not just another renewable-project backlog filing. It connects a storage asset, a private electricity supplier and project finance. The current read is stronger than a generic electricity-demand thesis because there is a signed agreement, defined capacity, a 15-year term and parent guarantees. Cash is still not in the statements: the facilities are expected to operate in 2027-2029, each facility may require financial close, and on the same day Nofar extended its memorandum with Bank Leumi for Israeli portfolio refinancing until July 31, 2026 without signing a binding agreement.
The contract links storage assets, a private supplier and parent guarantees
Nofar Israel will develop, connect and operate standalone storage facilities in Israel. Under the agreement, it will make the required storage power and capacity available to Cellcom Energy each day for discharge during peak hours, and Cellcom Energy will purchase stored electricity up to the contracted capacity. The price is set as a discount to the generation component, subject to a contractual minimum price, so the agreement is not a generic energy sale. It is built around storage availability in hours when electricity is more valuable.
Cellcom Energy has a different role. It does not own the storage facility. It purchases electricity and uses it as supply for its household and business customers. That is why the agreement is a cross-company subject: Nofar Israel has to build and finance the asset, Cellcom Energy has to supply customers at a commercial margin, and Cellcom and Meshek Energy stand behind part of the payment obligations through limited parent guarantees that may be suspended if Cellcom Energy meets certain financial covenants.
| Party | Economic action | What needs to appear next |
|---|---|---|
| Nofar Israel | Builds and operates storage facilities, and sells stored electricity for 15 years | Grid connection, facility availability, actual revenue and financial close by facility |
| Cellcom Energy | Buys electricity at a discount to the generation component and sells to customers | Customer volumes, supply margin and collateral around purchases |
| Cellcom and Meshek Energy | Equal ownership of Cellcom Energy and limited parent guarantees | Parent exposure and covenant compliance that may reduce guarantees |
NIS 820 million is revenue for Nofar Israel and a purchase commitment for Cellcom Energy
Nofar estimates aggregate net revenue from electricity sales over the agreement term, with indexation, at about NIS 820 million. In Cellcom and Meshek Energy's filings, the same number appears on the other side of the transaction as expected payments by Cellcom Energy over the agreement life. That matters. A reader who sees only the revenue headline may miss the two-sided economics. Nofar Israel has to generate revenue and availability. Cellcom Energy has to turn purchases into customer sales while preserving margin after electricity prices, market tariffs, collateral and operating expenses.
The context at Cellcom and Meshek makes this sharper. By the end of 2025, the electricity supply activity already had meaningful revenue for its stage of development, but operating profitability was still thin. The new agreement adds a long-term supply source, not guaranteed profit. For the transaction to create value at Cellcom Energy, it has to increase electricity volumes sold to customers, preserve an effective discount against the generation component, and manage guarantees and collateral without making growth a burden on the parent companies.
At Nofar, this is also not immediate parent-level revenue. Nofar Israel owns the asset and sells the electricity, while Nofar Energy owns 81.25% of Nofar Israel after Clal joined as a partner. The right reading is not NIS 820 million flowing directly into Nofar Energy's revenue line. It is a project-level revenue path that depends on ownership structure, operating start, facility availability and financing terms.
By July 31 Nofar has to turn the Leumi memorandum into a binding agreement
On the same day as the electricity-sale contract, Nofar updated the memorandum with Bank Leumi for refinancing of up to NIS 2.4 billion. The memorandum was extended to July 31, 2026, and no binding agreement has been signed. Nofar says final financing terms will be set only if a binding agreement is signed after negotiations, due diligence and required approvals, and there is no certainty that such an agreement will be signed.
The link between the two filings does not mean Leumi's financing necessarily funds the specific facilities in the Cellcom Energy agreement. The Leumi memorandum relates to a broader Israeli project portfolio, including debt refinancing, capital extraction from operating assets and upgrades of existing assets. Its importance is different: it shows that Nofar's Israeli platform is moving from backlog and construction into a stage where financing structure determines how much cash remains after debt, investments and asset upgrades. When the electricity contract itself states that each facility may be subject to financial close, the Leumi extension becomes part of the financing-risk read.
In plain terms, the contract improves future revenue quality, while financing will determine the pace at which that revenue can become cash. Another delay, or failure to sign a financing agreement, does not cancel the Cellcom Energy contract, but it makes the timetable and return on capital harder to read. A binding financing agreement would give investors a clearer frame for cost, leverage and Nofar Israel's ability to operate the assets without increasing pressure at the parent level.
The next reports need to show revenue, margin and facility availability
This agreement strengthens the private-storage thesis because it links a project, an electricity supplier and potential end customers. It also creates a clearer set of data points to track. At Nofar, investors need to see grid connection, assignment of the facilities to Cellcom Energy under the market-model regulation, first supply in 2027, daily availability and revenue recognition. At Cellcom and Meshek, the reports need to show whether the new supply source actually increases electricity volumes and margin, not only purchase obligations and guarantees.
The main risk is that the market treats NIS 820 million as if it were cash already generated. The contract is signed, the counterparties are public and the commercial frame is clearer than a generic renewable-energy story, but the accounting and cash effect will arrive only after construction, connection, availability and financing. The current read is therefore high-monitoring relevance, not an early declaration of success. Until the reports show first revenue, supply margin and financing close, the most important point is not the size of the number, but how it is split among Nofar Israel, Cellcom Energy, Cellcom and Meshek Energy.
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