Israel taps local firm IDE in desalination tender over Hong Kong rival

Israel on Tuesday chose local company IDE Technologies over a Chinese-linked rival to build the country's largest desalination plant to tackle shortages in one of the most water-scarce parts of the world.

IDE competed for the tender against Hutchison Water, whose main investor is Hong Kong's CK Hutchison Holdings. Israel's main ally, the United States, which is uneasy about Chinese involvement in Israeli critical infrastructure, had expressed its misgivings about Hutchison's bid.

The project, to be financed by a consortium of banks including Bank Leumi, Germany's KfW, and the European Investment Bank, will increase Israel's desalination capacity by 35% and lower water costs, the government said in a statement. U.S. Secretary of State Mike Pompeo, during a visit to Israel this month, told public broadcaster Kan that Chinese participation in Israeli infrastructure and communications systems could jeopardize cooperation with the United States. He did not specifically reference the desalination plant.

The reverse osmosis plant, the largest of its kind in the world, will be built in Soreq in central Israel near an airbase that hosts U.S.-Israeli missile tests. The Middle East is one of the world's driest areas and experts believe climate change, together with regional conflicts, will make the situation worse.

The Soreq plant is expected to come online in 2023, with a production capacity of 200 million cubic meters of water a year, and it will be the sixth desalination plant Israel has built along its Mediterranean coast. Hutchison Water did not immediately respond to a request for comment.

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