The Ministry of Finance Publishes Interim Recommendations to Support the Energy Sector in the Development of Data Centers in Israel
An interministerial task force established to formulate a comprehensive policy response for the development of computing infrastructure supporting artificial intelligence, while safeguarding the resilience and stability of the national electricity system, has published its interim recommendations
Israeli Ministry of Finance, Budget Department, Jerusalem, February 19, 2026
The Budget Department at the Ministry of Finance released today (Thursday) interim recommendations stemming from the work of the interministerial task force examining the energy requirements of data centers.
The task force includes representatives from the Ministry of Finance, the National Artificial Intelligence Directorate, the Ministry of Energy, the Electricity Authority, the Israel Innovation Authority, the Ministry of Environmental Protection, and the Planning Administration. Its objective is to develop a balanced policy that reconciles the physical infrastructure needs of the artificial intelligence sector with the requirements of the electricity sector, which constitutes a critical service for the Israeli economy.
The primary goal is to enable the natural growth of the data center industry while maintaining strict standards for the stability and reliability of Israel’s national electricity system.
Among the key recommendations are prioritizing the establishment of data centers outside central Israel, shortening planning and permitting processes in designated priority areas, and preventing speculative electricity connection requests that congest the power grid.
The report’s findings highlight a significant challenge: a standard data center (50 MW) consumes electricity equivalent to that of a residential neighborhood comprising approximately 10,000 housing units. While the construction of data centers typically takes only a few years, the development of electricity generation and transmission infrastructure requires between 10 and 12 years.
In light of this gap, the task force recommends designing incentives to encourage the geographic dispersion of data centers, thereby bringing electricity consumption closer to centers of solar energy generation.
Key Interim Recommendations:
- Energy Parks: Examining the possibility of directing data center development to designated zones, including national priority areas, through the promotion of statutory infrastructure by the state.
- Geographic Dispersion: Encouraging the establishment of data centers used for model training, characterized by high energy consumption but lower sensitivity to latency, outside central Israel, where land and energy availability are greater.
- Green Tracks: Creating preferential planning and electricity connection conditions for data centers located in areas with higher electricity availability.
- Efficient Queue Management: Establishing rules to prevent speculative “first-come, first-served” electricity reservations that block genuine technological entrepreneurs.
- Improved Service for Data Centers Developers: Publishing a transparent grid congestion map and issuing guidance to shorten response times for grid connection surveys in priority areas.
Maharan Frosenper, Director of Budgets at the Ministry of Finance, stated:
““The State of Israel must prepare for a rapid increase in demand for computing infrastructure, but this must be done responsibly and with long-term planning. The interim report points to the need for a policy that encourages geographic dispersion and proactive state involvement in planning designated zones for data centers, in order to safeguard the reliability of the electricity sector and the interests of the overall economy. We do not dictate where developers should locate, but we do create a clear preference for those who choose to strengthen the periphery and make more efficient use of the electricity grid.”
As the process continues, the interministerial task force will carry out an in-depth economy-wide cost–benefit analysis. A senior forum will convene monthly to monitor the implementation of the recommendations and to advance a government decision on the matter.