Israel must double infrastructure investment

“In the coming decade investment in infrastructure in Israel will need to be doubled,” Shmulik Arbel, deputy CEO and head of Corporate Banking at Bank Hapoalim said at the opening of his remarks at the “Globes” Infrastructure of the Future conference, held in collaboration with Bank Hapoalim. “Today, annual investment in infrastructure amounts to NIS 40-50 billion,” he added.

According to Arbel, the stock of capital and infrastructure in Israel is 35% of GDP, while in other developed countries it is some 20% higher. “This is a gap of NIS 300-350 billion of infrastructure that is lacking in comparison with the developed countries,” he said.

Arbel went on to say that in the past few years Israel has invested 2-3% of GDP in infrastructure annually. “If you only compare the rate of investment, we are not very different from the rest of the world,” he said, but added that it was necessary to take population growth into account. “By 2050, Israel’s population is expected to grow by about 40%, while in other countries the rate will be about 18%. When you start from lower capital stock and you grow faster, investment at a level similar to that of other countries won’t close the gap.”

Arbel said that one of the most important and complicated aspects was planning and permits. “This is a complicated process that includes municipalities, environmental factors, and many considerations, and is one of the greatest barriers to advancing projects,” he said, adding that planning large projects such as the Metro was inherently long and complicated.

He also said that decision making on infrastructure projects required long-term vision, and that sometimes it was a matter of decisions the results of which would not be seen during the term of office of the decision makers, which made promoting the projects difficult.

In addition, Arbel stressed the need for leadership that would expedite processes, alongside the activity of developers and sources of finance. He said that a large group of developers was active in Israel, and that in recent years new business groups had entered the field of infrastructure that were not active in it before.

On the financing aspect, Arbel said that the banks and financial institutions were active in financing infrastructure, and that this was the kind of investment that suited the institutions. “On the financing side there is no problem,” he said, adding that there would be enough money to finance the infrastructure projects.

As for execution, Arbel said that there were companies in Israel that had carried out infrastructure projects over the years and had acquired experience. He said workers “will come”, and that the state had opened up quotes of foreign workers for various industries.

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He added that if the scale of investment was doubled, “foreign contractors will probably also come here” as they had in the past, some of them companies that had not operated in Israel previously, which would assist in carrying out complex infrastructure projects such as the Metro.

On technology, Arbel said that it was providing infrastructure projects with a “following wind.” He said that the number of startups in areas to do with infrastructure had risen in recent years, particularly in energy.

He also pointed out that technological development had an impact on the amount of investment required and the speed at which projects could be carried out. “If at one time I would invest a certain sum to produce 100 megawatts, today with the same sum it’s possible to produce 1,000 megawatts,” he said.

Arbel also commented on data centers, and said that they had become part of infrastructure. Unti a few years ago, he said, data centers were considered to belong to the world of services, but that they had now fully become an infrastructure element. He described them as “main transport arteries for data” with significant demands for energy and computing power, and said that in the past two years there had been a rise in activity surrounding them. He said that we should now be ready for centers to be inseparable from infrastructure and treat them accordingly.

The conference is in collaboration with Bank Hapoalim and is sponsored by Pelephone, Yes, Doral, Netivei Israel National Transport Infrastructure Company, CAF, Bazan Group, Ratio Energies, NTA Metropolitan Mass Transit, Generation Capital, and Moriah Jerusalem Development Corporation, with the participation of Israel Electric Corporation.

Published by Globes, Israel business news – en.globes.co.il – on January 28, 2026.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.