Keystone Wants to Unlock Value—Here’s How

Keystone has transformed into a major infrastructure powerhouse in just five years, spanning multiple high-growth sectors, including transportation (Egged), traditional and renewable energy, and telecommunications. Now, the fund's leadership believes it is time to capitalize on its accumulated assets, aiming to double equity to 4 billion ILS by 2030.

“The big news is that Keystone, after an impressive five to six years of expansion and building a strong portfolio, is shifting towards enhancing the value of its assets. There’s tremendous untapped potential within our existing holdings—not just in terms of tangible improvements but also through increasing cash flow from these assets, which enables internal reinvestment,” explains Navot Bar, CEO of Keystone, in an interview with Bizportal.

Strategic Shift: Five Dedicated Platforms

As part of its new strategy, Keystone is restructuring into five dedicated platforms: energy, transportation, real estate, renewable energy, and telecommunications. Perhaps its most well-known asset is Egged, Israel’s largest public transportation operator.

“In Egged, we are pursuing two key value-enhancing initiatives. First, we are transferring all real estate assets into a dedicated subsidiary, shifting them toward real estate-oriented development. Until now, these properties were used for transportation-related purposes, such as bus depots and garages, but many of them have higher-value potential. For now, Egged continues to use these sites, but our goal is to repurpose them for their optimal use,” Bar explains.

“The second major initiative is expanding Egged’s operations internationally. Egged has two significant international arms in the Netherlands and Poland, operating hundreds of employees and millions of kilometers annually. In 2024, we doubled our operations in the Netherlands, generating over 1 billion ILS in revenue. We have a strong presence and experience, and we plan to expand further.”

Further Expansion in Europe?

"Absolutely. We’re actively working on it. Just as last year we won more and more contracts, we are continuing to bid on tenders—not just in the Netherlands and Poland, but also in neighboring countries that can benefit from the proximity to our existing depots and infrastructure. Egged is growing and evolving."

Unlocking Value in Power Stations

Keystone’s second major pillar is its power station portfolio, which includes Ramat Hovav, IPM, Hagit, and the upcoming Sorek plant. According to Bar, there’s a strong potential for value creation, both from optimizing current assets and leveraging additional opportunities.

"Our power plants have delivered strong profitability since we acquired them, leading to a significant increase in their valuation. For example, we entered a project with Edeltec, which won the Sorek power station tender. We provided financing that will eventually convert into equity ownership, making us the plant's owners. This is an example of internal development—leveraging our own ecosystem rather than competing for external assets. Internal development also delivers higher returns compared to acquiring existing infrastructure," says Bar.

עוד תכניות

Similarly, IPM power station has two layers of value creation:

Increasing private sales: Currently, only 15% of the electricity generated at IPM is sold to private customers, while the rest goes to the national grid. Keystone has the regulatory approval to increase private sales, which can be completed within 6-12 months. Since private sales are significantly more profitable, this could boost margins substantially.

Building a data center on-site: IPM has 30 acres of unused land, where Keystone plans to develop a data center. This strategy allows the same asset to generate additional revenue streams, leveraging both the existing power infrastructure and the available land to create synergistic infrastructure projects.

Telecom Expansion Still in Early Stages

Keystone’s telecommunications division is still in its infancy, without major revenue-generating assets yet. However, the company has already embarked on an ambitious fiber-optic project, building a subsea cable running from India to Italy, passing through Saudi Arabia, Jordan, and Israel.

"This project is not just an engineering and economic opportunity but also a major geopolitical milestone," Bar explains. "We anticipate that in the coming months, as regional developments unfold, this project will gain even more momentum."

With a focus on asset optimization, strategic expansion, and internal development, Keystone is betting that its shift toward value unlocking will transform its financial trajectory—and double its equity by 2030.