MOTI FRIEDMAN Chairman of Israel Electric Corporation

United World
Israel will be celebrating this coming May its 60th anniversary. Over these 60 years, Israel, from a desert with orchards, has become a world center for innovation and entrepreneurship. What does this anniversary truly mean to you and to your company?

Mr. Moti Friedman

It's not only Israel's sixtieth birthday, but also IEC's 85th birthday. The story of Israel and the story of IEC are intertwined. Since 1948 we have been a mutual miracle. IEC began generating power at a capacity of 70 megawatts and today we generate more than 11,500 MW. The generation of electricity is in correlation to the growth of a country; I do not believe there is another country in the world that has seen such massive economic growth. For me, sixty years is a point on a continuous line, at which Israel will look back at our fantastic past and look forwards towards a great future. Regarding our situation, I am optimistic of our future. It is not just a sixtieth anniversary but a very special and unique one.

United World
IEC has been around for many years and has helped in building Israel. In your opinion how integral a role has IEC played in the development of the state of Israel?

Mr. Moti Friedman

All economic development in Israel is dependant on electricity. Water can be stored in tanks, but electricity requires a developed infrastructure and a consistent supply to the customer. If you are interested in our view of the future, we have many interesting prospects that will provide Israel with remarkable R&D products. At IEC, we have over one hundred PHDS dealing with inventions and innovations. At the moment we provide Israel with traditional energy but we think that in a few years we might lose some of our market share to new companies in the field. On the other hand, we will gain market share by being a leader in the renewable and clean energy field. We look forward to taking part in new technology initiatives. First we would check feasibility, and then provide them with our facilities as a beta site lab. This way, they can see how there invention can be implemented on a large scale. I believe that serious players in the field of green energy should contact us about a future partnership.

The next step is not to just to lead clean energy in Israel but also to take it out to the world. The education and the academic level in Israel are promising. Our universities are in the top tier in the world in our sector. The other factor that makes us a serious force is our experience. Many of our engineers come from central and eastern Europe, speak a wide range of languages and know a variety of cultures. These advantages assist us in enlarging our international activities.

Another great advantage we have is that being a government owned company, enables us to maintain a large engineering division. Today the world is facing a great boom in energy so the importance of a reliable engineering division rises. However, we are one of the rare examples of a utility company which kept of the entire electricity chain - including projects execution - in house.

There are only three or four large generation equipment manufacturers. Alstom, which is one of the largest, hired IEC to design six units of coal power plant in South Africa. They chose us because our department is highly experienced.

Clean energy is now used mostly by pioneers. Our main advantage is that we have the abilities to gain experience. In Asia and Africa, you cannot find much green energy. Once those trends arise they will look for suitable solutions and find them in Israel.

United World
What role do you think you will play in influencing the international community?

Mr. Moti Friedman

We did not invent electricity production and thus we cannot lead the world in traditional electricity, but I see Israel as a leading country and us as a leading company in the field of clean energy. Clean energy and especially solar energy are our gateways into global leadership in the energy sector. I cannot provide you with details about partnerships and joint ventures' but I am certain that any competent businessman will see the benefits of joining forces with IEC on these issues.

United World
You mentioned that your competition will increase as your market share decreases, how much of your growth will stem from renewable energy?

Mr. Moti Friedman

This is a general prediction, but I believe that in the energy business 10 years is tomorrow morning, and I think that IEC will have more than 10% of its production in clean energy. Under the planned reform in israel's energy market, IEC will be transformed into a group of companies dealing with generation, transmission, distribution, engineering and projects. I believe that at the end, the newly formed electricity companies will create a strong basis of cooperation between the public sector and the private sector.

In that regard, we learn how to create partnerships in Israel and around the world so that one would find us as partners in other countries. We are negotiating with potential partners in certain countries throughout the world, and in a few years we will be active in the international market, and not just on the Israeli one.

United World
What benefits will Israel and IEC gain from becoming more global?

Mr. Moti Friedman

The chief benefits for IEC are economic benefits, and the state of Israel as the key shareholder of IEC will also enjoy those benefits. When you open Israel and Israelis to the world you gain the opportunity for Israelis to work outside Israel and give them an incentive to come back. It is recommended for the state of Israel to have Israeli companies sending Israelis overseas, rather than to have them headhunted by foreign players. Eventually, having Israeli companies go international will keep more of our young talent here. If we do not have this infrastructure, we will lose our young talented professionals to the US and other countries. From a Zionist point of view it is better for the Israeli companies to become more international.

United World
Privatization is a major step towards serious growth and for the next giant leap in any economy. I know that the ports have plans for the next ten years, what are your plans for privatization?

Mr. Moti Friedman

We are one step behind the ports in that sense. A year ago you could not even talk in our premises about privatization. I think that things have changed over the last year due to internal changes and efforts invested by us, by the government and by the union, with whom we had many differences a year ago. Today we have constant talks about many highly sensitive issues.

I believe that in the last year we have begun talking with our unions about a reform and I will quote the unions. A year ago they did not want to hear about reforms and today they say publicly that change will happen, while promising their people that they will gain and profit from that change. that the details of that change we cannot yet reveal, but it is suffice to say that the main idea is to create a few generation subsidiaries and an independent system operator, separated from IEC, and giving a fair chance for new competitors. This way IEC will lose gradually the full control of electricity generation in Israel and will be one of the energy providers in Israel. A few years later, the government intends to help the generation companies to compete with each other as well as with the independent private producers.

United World
Do you see this competition as an opportunity for the company?

Mr. Moti Friedman

No, it is a challenge. The company is old, and in order to survive as a company we have to give up our monopoly but by doing that gaining the chance to compete outside of Israel. At the moment we are the Orwellian big brother but under the reform we will step out of this situation.

United World
What can up and coming companies gain from IEC?

Mr. Moti Friedman

As an experienced company we have much to offer to young companies, and many of them know and utilize this. In their early stages young companies buy our services, sometimes for equity which they can later buy back.

United World
Seeking new challenges to overcome, do you see international partnerships as a competitive advantage for you?

Mr. Moti Friedman

When we will decide to privatize our generation subsidiaries, we will find international partners that want to work with us. such as the generation equipment producers which I have mentioned earlier. I think that they would consider such partnership. To create an international partnership we will have to join forces in the world.

United World
It is always interesting for us to learn more about the personalities that we interview. What accomplishment are you most proud of in your business career?

Mr. Moti Friedman

My career always dealt with people. At IEC I have a great chance. It is one of the largest organizations in Israel. It is very old fashioned and that opens many opportunities. In four years we can go through three or four generational developments. I believe that as soon as all the troubles in the region settled down and peace negotiations will begin and the reformed IEC will be able to seize many opportunities for growth in the region. Our current predicament is that of an island, cut off from the emerging markets of the middle East to which we have much to contribute and gain from. On the other hand, proximity and even partnerships with the large energy sources providers can open new and interesting avenues of cooperation that would strengthen the peace in return..

On a different note, this sector has been led by a public sector people, but today the leaders here are private sector people. Our CEO's entire career was in the private competitive business, and even in the government most of the new young leaders come from the private sector. Therefore, the newly found understandings and the shared values of business and profitability will lead the entire Israeli economy forward.

United World
What is a key message you would like to send to our readers about IEC?

Mr. Moti Friedman

IEC's history and future prove That anything is possible if one is willing to dedicate himself to a cause for motives that go beyond personal gain, that change is always an opportunity to be relished and not be afraid of, and that at the bottom line, it's all about people and not, for example, technology. These are people that innovate, that create visions and inventions and these are people that implement them. So I would offer the readers the same words which I constantly offer to my colleagues at IEC: "With unity and faith we shall succeed".

United World
Thank You for this interview.