Israel's national water company Mekorot announced on Wednesday that it is acquiring the municipal wastewater treatment plants serving Ashkelon and Netivot. Officials say the move will help clear a major obstacle to housing development and economic growth in southern Israel.

The acquisition follows a government decision approved at the end of 2025 that allows Mekorot to expand its role in the wastewater treatment sector. The company stated that the step targets longstanding infrastructure bottlenecks that have slowed urban development and delayed new housing projects in parts of the country.

Mekorot plans to expand and upgrade the facilities over the coming decade with investments estimated at approximately NIS 500 million. The improvements are expected to increase treatment capacity and support future development in the region.

Government reports and findings by the State Comptroller have highlighted insufficient wastewater treatment and transmission infrastructure as a barrier to housing development. Assessments indicate that roughly 120,000 housing units nationwide have been delayed due to limitations in wastewater treatment capacity, especially in areas with rapid population growth.

Israel leads globally in wastewater reuse, with more than 80 percent of treated wastewater recycled for agricultural purposes. Officials have noted, however, that expansion of treatment facilities has not kept pace with development needs in several regions.

The government and the Water Authority identified gaps in the construction, financing, and operation of large-scale wastewater treatment facilities, leaving some critical infrastructure projects without sustainable solutions. Mekorot's entry into the field is expected to provide greater certainty for projects, accelerate implementation, and offer local authorities a long-term operational framework.

Mekorot already operates in the wastewater sector through its subsidiary Mekorot Initiatives, which manages treatment facilities in Carmiel and Ashkelon. The company also runs water and wastewater systems at the Shafdan wastewater treatment complex in Rishon LeZion, serving more than 20 local authorities in central Israel.

The expansion in Ashkelon and Netivot aligns with a broader strategy of managing the entire water cycle, from water production and distribution to wastewater treatment and the reuse of reclaimed water for agriculture and environmental purposes.

The announcement took place during a signing ceremony attended by Energy and Infrastructure Minister Eli Cohen, Energy Ministry Director-General Yossi Dayan, Netivot Mayor Yehiel Zohar, Ashkelon Mayor Tomer Glam, Water Authority Director-General Yehezkel Lifshitz, Mekorot Chairman Moshe Shimoni, Acting Mekorot CEO Danny Sofer, Mekorot Initiatives Chair Tami Cohen, Acting Mekorot Initiatives CEO Barak Gerber, and Mei Ashkelon Water Corporation CEO Shay Hazut.

The development of these wastewater treatment facilities will improve the quality of life for residents of Netivot and Ashkelon and enable the construction of thousands of additional housing units, Cohen said. This forms part of a plan approved to invest more than NIS 40 billion over the next two years in upgrading and developing infrastructure throughout the country. Investment in infrastructure and the energy sector will increase economic growth, create jobs, and benefit all Israeli citizens.

Dayan described the project as a strategic initiative for southern Israel. The expansion of the wastewater treatment facilities in Ashkelon and Netivot is a strategic move that will remove a significant barrier to the development of southern Israel, enable the advancement of thousands of housing units, and strengthen regional growth, he said. The project follows the policy of Energy and Infrastructure Minister Eli Cohen to strengthen water and energy infrastructure as a foundation for regional development, expand housing supply, and reinforce Israel's periphery.

Lifshitz called the agreement an important day for Israel's water sector. The entry of Mekorot into the field of wastewater treatment plant development will enable accelerated urban growth and infrastructure upgrades in cities across the country, he said.

Acting Mekorot CEO Danny Sofer said the project reflects the company's broader role in national infrastructure management. A modern water sector does not end with water supply; it also includes treatment, reuse, and infrastructure management at the highest level, Sofer said. Mekorot's experience in operating complex systems on a national scale enables us to bring reliability, efficiency, and advanced integrated management to the wastewater sector. Mekorot is a national company with a public mission to support the activities of the state and local authorities, including by removing development barriers and creating sustainable urban growth.

Netivot Mayor Yehiel Zohar said the city's wastewater treatment facilities had become a key obstacle to further growth. The main obstacle to Netivot's continued rapid development was the upgrading of its wastewater treatment facilities, Zohar said. With the signing of this agreement with Mekorot, a solution has been found that will enable the continued marketing and construction of the city. I would like to thank Minister Eli Cohen for his initiative and for advancing this issue.

Ashkelon Mayor Tomer Glam, who also chairs the Mei Ashkelon Water Corporation, said the agreement would support the city's long-term development plans. This is an important strategic move that will ensure Ashkelon's continued rapid development while maintaining advanced, reliable, and high-quality water infrastructure for residents, Glam said. Cooperation with Mekorot will allow us to continue investing in urban development and improving residents' quality of life through responsible, long-term planning.