JERUSALEM (Reuters) - Israel's national water company signed a financing agreement to build a desalination plant, which officials said could allow drought-ridden Israel to export water to its neighbors upon completion in 2013.
Israel's ADL, a subsidiary of state-owned Mekorot, will build and operate the plant in the coastal city of Ashdod for 25 years, supplying 100 million cubic metres of desalinated water annually, the Finance Ministry said in a statement on Tuesday.
Israel is two-thirds arid and to avoid further depleting its fresh water sources it has become a world leader in desalination and wastewater recycling.
The new Ashdod plant will join four other desalination facilities that to provide, by the end of 2013, 85 percent of the country's household water consumption.
"In the coming years we will be able to return water to nature and even sell water to our neighbors," said Infrastructure Minister Uzi Landau.
ADL secured funding for the project from Israel's Bank Hapoalim and the European Investment Bank (EIB), the statement said.
The Finance Ministry had previously put a 1.5 billion shekel ($400 million) price tag on the plant, which will use reverse-osmosis to desalinate seawater from the Mediterranean, and said it will supply water at a cost of 2.4 shekels per cubic meter.
(Reporting by Ari Rabinovitch; Editing by Mike Nesbit)