Netafim Announces Agreements With Etanalc From Brazil to Supply Smart Irrigation Systems and Related Services for the Largest-Ever Drip Irrigation Sugar Cane Cultivation Project

TEL AVIV, Israel - The Value of the First Phase of the Project is More Than 150 Million
Dollars

- Ofer Bloch, President & CEO: “This agreement, implemented during a
global financial crisis, indicates that there is still an incentive to invest
in mega agricultural projects using advanced technology”

Netafim, a global leader in providing smart water solutions
for agriculture, concluded an agreement with Etanalc, pursuant to which
Netafim will be the sole provider of irrigation equipment and related
services for the world’s largest drip irrigation project. The project
includes production of both Ethanol and electricity from cultivation of sugar
cane. The total development cost of the first phase of the project is over
900 million dollars. The project is located in the Brazilian State of
Tocantins, in northern-central Brazil. The first phase of the project, which
includes the first cluster of 3 mills, is scheduled for completion by 2011.
The total area of the project will cover over 300.000 hectares of land for
the cultivation of sugar cane, in various phases, reaching a total of 12
mills

Sempra Energy Trading LLC previously concluded an “off-taking”
agreement with Etanalc S.A.. under which, Sempra will purchase the Ethanol
produced by the project for sale to its international markets, over a period
of 20 years.

According to the agreement signed in Brazil, Netafim will be
the sole provider of all irrigation systems for the Etanalc project. In
addition, Netafim’s agronomists and engineers will provide on-going support
for the duration of the project.

Netafim is a world leader in providing dedicated solutions for
irrigation of bio-energy crops. Its main activity in the bio-energy crops is
focused in Latin America, Africa, India and south-east Asia.

According to sources in Brazil, Netafim - through is Brazilian
subsidiary - was selected because of its strong local infrastructure in
Brazil, its specialization in sugar cane crops, ability to provide turnkey
solutions and its comprehensive support services to its customers.

About Netafim:

Netafim (www.netafim.com) is the global leader and the
largest company providing smart water solutions for agriculture. The
company’s main activity focuses today on large-scale irrigation projects,
greenhouses, and bio-fuel crops. The company’s sales for 2008 exceeded 600
million dollars.

About Etanalc

Etanalc is a unique Brazilian enterprise headed by Mr. Aureo
Luiz de Castro, a Brazilian contractor and entrepreneur. Etanalc has a strong
management team which includes Mr. Joel Mendes Renno, previously Chief
Executive Officer and Chairman of the leading Brazilian energy company -
Petrobras.

Contact:

Yaniv Rosenberg
Netafim P.R
+972-50-4488962
yaniv@rcspr.co.il

Source: Netafim Ltd.

Contact: Yaniv Rosenberg, Netafim P.R, +972-50-4488962, yaniv at rcspr.co.il