Tel Aviv-listed engineering and technology company Afcon Holdings has secured a USD 24 million contract to build battery-based energy storage systems in Israel, marking a significant expansion into the rapidly growing energy storage sector. The project will deliver a total capacity of approximately 45 megawatts and represents the company's strategic move to strengthen its position in renewable energy and grid stability solutions.

Project Details and Timeline

The energy storage project will be carried out by a wholly owned subsidiary of Afcon and is expected to reach completion in the second half of 2026. The battery-based systems will be installed at multiple sites across Israel, with the contract including both maintenance and warranty services as part of the comprehensive agreement.

The 45-megawatt capacity represents a substantial undertaking for the company as it seeks to establish itself as a major player in the energy storage market. The systems will contribute to Israel's energy infrastructure by providing storage solutions that support grid stability and accommodate the integration of renewable energy sources.

Strategic Growth Initiative

CEO David Hareli characterized the contract as "another significant step in deepening our activity in the energy storage sector." He emphasized that the company has identified energy storage as a key growth engine, stating, "We see enormous potential in this field and view it as one of the group's key growth engines over the coming decade." Hareli expressed the company's ambitions to expand beyond this initial contract, indicating that Afcon aims to "capture a meaningful share of this developing market." The CEO's comments reflect the company's broader strategy to expand its footprint in the energy storage sector as global demand continues to rise.

The timing of this contract aligns with increasing global demand for energy storage solutions, driven by the expansion of renewable energy and the growing need to stabilize power supply systems. Afcon has positioned itself to capitalize on these market trends through its focus on storage solutions and renewable energy technologies.

Financial Strengthening Measures

Alongside announcing the new energy storage contract, Afcon reported significant progress in debt reduction efforts. The company has repaid approximately USD 15.53 million in Series D bonds, representing part of a broader initiative to reduce overall debt levels and lower financing costs. CEO Hareli highlighted the financial implications of this debt reduction, stating that "reducing the group's debt from its own financial resources demonstrates its financial strength."

This debt repayment strategy appears designed to improve the company's financial position while pursuing growth opportunities in the energy storage market. The ability to reduce debt using internal financial resources while simultaneously securing major new contracts suggests the company is operating from a position of financial stability as it expands into new market segments.

Company Background and Market Position

Afcon Holdings trades on the Tel Aviv Stock Exchange and provides engineering and technology solutions across multiple sectors, including energy, infrastructure, communications, and defense. The company has increasingly focused its strategic direction on renewable energy, storage solutions, and electric vehicle charging as part of its long-term growth strategy. This diversified approach positions Afcon to serve various aspects of the evolving energy landscape, from traditional infrastructure projects to cutting-edge renewable energy and storage technologies.

The company's expansion into energy storage represents a natural evolution of its existing capabilities in engineering and technology solutions. The energy storage contract demonstrates Afcon's ability to compete for substantial projects in emerging technology sectors while maintaining its established presence in traditional engineering and infrastructure markets. The company's strategic pivot toward renewable energy and storage solutions reflects broader industry trends toward sustainable energy infrastructure and grid modernization.

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