China still winning major Israeli infrastructure deals

At a time when the Western world, and the US in particular, are striving to break away from ties with China in the field of strategic infrastructure, Chinese companies continue to participate in the construction of huge projects critical to the Israeli economy.

Dalia Energy recently signed planning, procurement and construction agreements with three Chinese companies, CHEC, HEI and THCC, for the construction of two power plants. The agreements include the construction of the Dalia 2 power plant at the Tzafit site, with a NIS 3.8 billion budget, and the Eshkol Avshel power plant at the Eshkol power plant site, with a NIS 3.3 billion budget.

On government tenders, a process is underway in which investments by Chinese companies are examined by the Foreign Investment Review Committee, which has blocked several investments by Chinese companies in Israel in recent years. However, they have found a back door to enter investments in critical facilities by signing agreements with private companies, such as Dalia.

China Harbor, part of the consortium that won the construction of the two Dalia power plants was previously disqualified from the tender to build a refinery port in Haifa. After Israel Ports Co. took this step “for national security reasons,” the Chinese appealed to the courts. Last year, a judge in the Tel Aviv District Court explained that he intended to rule against China Harbor and dismiss the petition that was presented to him. The Chinese company subsequently withdrew the petition to avoid a ruling.

Dalia’s ventures are not the first for China Harbor in the energy sector. Complaints were also raised about the company’s involvement in the construction work of the Kesem power plant, but at that time the National Security Council found no problems with the project. “The foreign company is not establishing or operating the plant but rather performing contract work for the builder (work estimated to be very small in scope compared with the project),” the National Public Works Department wrote in response to a request from the Rosh Ha’Ayin Municipality.

Against the global trend

There are also strategic infrastructures that have already been built with Chinese assistance. For example, in February 2025, the Kochav Hayarden pumped storage power plant, which was built with an investment of NIS 2 billion, began operations. PowerChina was the contractor and builder of the project. At the same time, there are Chinese companies that hold ownership: PMEC holds 33.3% of the Alon Tavor power plant, alongside Israeli partners Mivtach Shamir and Rapac.

All this clearly contradicts the global trend of taking into account the Chinese threat. About a month ago in the US, CBS’s 60 Minutes program aired, in which US Gen. Tim Haugh former commander of Cyber Command and head of the National Security Agency (NSA) and head of the Central Security Service (CSS) until last April, warned that China “is targeting not only the US military and industry, but also Americans in their homes.” He described how Chinese state-owned companies are present in US power plants, water purification facilities, hospitals, and media.

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Not a single word about China

Last week Minister of Energy and Infrastructure Eli Cohen responded to a question submitted by MK Moshe Tur-Paz (Yesh Atid) on China. “The State of Israel is a free market economy that wants there to be competition in all construction of infrastructure facilities. We are of course working with everyone,” Cohen said, without the word “China” appearing in his answer.

“Despite this, and I am not referring to any specific country, there is a body in the National Security Council that is responsible for examining foreign investments, and in any instance where there is concern that that entity has interests that could harm the national security of the State of Israel, then we forward the request, and any request for the construction of a power plant, which is an essential, strategic facility, reaches the National Security Council, is examined there, and without specifying cases of companies or projects or countries, there have been cases where projects have been stopped in the past.”

Published by Globes, Israel business news – en.globes.co.il – on November 16, 2025.

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