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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(Jurisdiction of incorporation or organization) |
(Company Registration No. 201406588W)
4911 (Primary Standard Industrial
Classification Code Number) +65 6351 1780 |
Not Applicable (I.R.S. Employer Identification No.) |
Title of Each Class
|
Trading Symbol
|
Name of Each Exchange on Which Registered
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Large accelerated filer☐
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Non-accelerated filer ☐
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Emerging growth company
|
U.S. GAAP ☐
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Standards Board ☒ |
Other ☐
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1 | |||
A. |
1 | ||
B. |
1 | ||
C. |
1 | ||
ITEM 2. | 1 | ||
A. |
1 | ||
B. |
1 | ||
ITEM 3. | 1 | ||
A. |
Reserved | 1 | |
B. |
1 | ||
C. |
1 | ||
D. |
1 | ||
ITEM 4. | 59 | ||
A. |
59 | ||
B. |
59 | ||
C. |
144 | ||
D. |
144 | ||
ITEM 4A. | Unresolved Staff Comments | 144 | |
ITEM 5. | 144 | ||
A. |
165 | ||
B. |
171 | ||
C. |
184 | ||
D. |
185 | ||
E. |
187 | ||
F. | 187 | ||
ITEM 6. | 187 | ||
A. |
187 | ||
B. |
190 | ||
C. |
190 | ||
D. |
193 | ||
E. |
193 | ||
ITEM 7. | 194 | ||
A. |
194 | ||
B. |
194 | ||
C. |
195 | ||
ITEM 8. | 195 | ||
A. |
195 | ||
B. |
195 | ||
ITEM 9. | 195 | ||
A. |
195 | ||
B. |
195 | ||
C. |
195 | ||
D. |
196 | ||
E. |
196 | ||
F. |
196 | ||
ITEM 10. | 196 | ||
A. |
196 | ||
B. |
Constitution | 196 | |
C. |
209 | ||
D. |
209 | ||
E. |
209 | ||
F. |
216 | ||
G. |
216 | ||
H. |
216 | ||
I. |
216 | ||
J. |
216 | ||
ITEM 11. | 216 | ||
ITEM 12. | 217 | ||
A. |
217 | ||
B. |
217 | ||
C. |
217 | ||
D. |
217 |
• |
“CPV” means the CPV Group (i.e., CPV Power Holdings LP, Competitive
Power Ventures Inc. and CPV Renewable Energy Company Inc.), a business engaged in the development, construction and management of power
plants running conventional energy (powered by natural gas) and renewable energy in the United States, which was acquired in January 2021
by CPV Group LP, an entity in which OPC indirectly holds a 70% interest; |
• |
OPC Energy Ltd. (“OPC”), an owner, developer and operator
of power generation facilities in the Israeli and United States power markets, in which Kenon has an approximately 55% interest;
|
• |
Qoros Automotive Co., Ltd. (“Qoros”), a Chinese automotive
company based in China, in which Kenon, through its 100%-owned subsidiary Quantum (as defined below), has a 12% interest; and |
• |
ZIM Integrated Shipping Services, Ltd. (“ZIM”), an Israeli
global container shipping company, in which Kenon has an approximately 21% interest. |
• |
“Ansonia” means Ansonia Holdings Singapore B.V., a company
organized under the laws of Singapore, which owns approximately 62% of the outstanding shares of Kenon; |
• |
“Chery” means Chery Automobile Co. Ltd., a supplier to and
shareholder of Qoros; |
• |
“IC” means Israel Corporation Ltd., an Israeli corporation
traded on the Tel Aviv Stock Exchange, or the “TASE,” and Kenon’s former parent company; |
• |
“IC Power” means IC Power Ltd., formerly IC Power Pte. Ltd,
a Singaporean company and a wholly-owned subsidiary of Kenon; |
• |
“Inkia” means Inkia Energy Limited, a Bermuda corporation,
which was wholly-owned subsidiary of IC Power. In December 2017, Inkia sold all of its Latin American and Caribbean businesses and has
since been wound up; |
• |
“Inkia Business” means Inkia’s Latin American and Caribbean
power generation and distribution businesses, which were sold in December 2017; |
• |
“Kallpa” means Kallpa Generación SA, a company within
the Inkia Business. Kallpa was owned by Inkia until December 2017; |
• |
“Majority Qoros Shareholder” means the China-based investor
related to Shenzhen Baoneng Investment Group Co., Ltd. (“Baoneng Group”) that holds 63% of Qoros; |
• |
“our businesses” shall refer to each of our subsidiaries
and associated company, collectively, as the context may require; |
• |
“Quantum” means Quantum (2007) LLC, a Delaware limited liability
company, a wholly-owned subsidiary of Kenon, which is the direct owner of our interest in Qoros; |
• |
“Spin-off” shall refer to (i) IC’s January 7, 2015
contribution to Kenon of its interests in IC Power, Qoros, ZIM and other entities, and (ii) IC’s January 9, 2015 distribution of
Kenon’s issued and outstanding ordinary shares, via a dividend-in-kind, to IC’s shareholders; and |
• |
“Tower” means Tower Semiconductor Ltd., an Israeli specialty
foundry semiconductor manufacturer, listed on the NASDAQ stock exchange and the TASE, in which Kenon used to hold an interest until June
30, 2015. |
• |
“availability factor” refers to the number of hours that
a generation facility is available to produce electricity divided by the total number of hours in a year; |
• |
“BCM” means a billion cubic meters of natural gas, a unit
of energy, specifically natural gas production and distribution; |
• |
“Carbon capture” technology refers to a set of chemical processes
that are designed to capture CO2 from the exhaust gas stream of a fossil fuel power generation or industrial process, often referred to
as point source carbon capture technology; the primary goal of this technology is to reduce the release of CO2 into the atmosphere;
|
• |
“COD” means the commercial operation date of a development
project; |
• |
“distribution” refers to the transfer of electricity from
the transmission lines at grid supply points and its delivery to consumers at lower voltages through a distribution system; |
• |
“EA” means Israeli Electricity Authority; |
• |
“EPC” means engineering, procurement and construction;
|
• |
“Energean” means Energean Israel Ltd which holds 100% interest
in Karish and Tanin gas fields. |
• |
“firm capacity” means the amount of energy available for
production that, pursuant to applicable regulations, must be guaranteed to be available at a given time for injection to a certain power
grid; |
• |
“Gat Partnership” means Alon Energy Centers—Gat Limited
Partnership, a limited partnership that holds interests in the Kiryat Gat Power Plant; |
• |
“Gnrgy” means Gnrgy Ltd.; |
• |
“GW” means gigawatt; |
• |
“GWh” means gigawatt per hour (one GWh is equal to 1,000
MWh); |
• |
“Hadera Energy Center” means OPC Hadera’s boilers and
a steam turbine. The Hadera Energy Center currently serves as back-up for the OPC-Hadera power plant’s supply for steam; |
• |
the “IEC” means Israel Electric Corporation, a government-owned
entity, which generates and supplies the majority of electricity in Israel, transmits and distributes all of the electricity in Israel,
acts as the system operator of Israel’s electricity system, determines the dispatch order of generation units, grants interconnection
surveys, and sets spot prices, among other roles; |
• |
“Infinya” means Infinya Ltd. (formerly Hadera Paper Ltd.),
an Israeli corporation; |
• |
“installed capacity” means the intended full-load sustained
output of energy that a generation unit is designed to produce (also referred to as name-plate capacity); |
• |
“IPP” means independent power producer, excluding co-generators
and generators for self-consumption; |
• |
“Karish Reservoir” refers to the Karish and Tanin natural
gas fields situated in the Mediterranean Sea offshore Israel and are owned and operated by Energean; Karish reservoir is estimated to
contain 1.41 tcf of gas and 317 Mboe, the Tanin field is estimated to hold 921 bcf of gas and 171.7 Mboe; |
• |
“Kiryat Gat Power Plant” or “Kiryat Gat” means
a combined-cycle power plant powered by conventional energy with installed capacity of 75 MW located in the Kiryat Gat area, which began
commercial operation in November 2019; |
• |
“kWh” means kilowatt per hour; |
• |
“Mboe” means one thousand barrels of oil equivalent;
|
• |
“Minimum Price” means the minimum price of gas in USD set
forth in gas purchase agreements between Tamar Group and each of OPC-Hadera and OPC-Rotem based on a natural gas price formula described
in the agreements that may be affected by generation component tariff; |
• |
“MW” means megawatt (one MW is equal to 1,000 kilowatts or
kW); |
• |
“MWdc” means megawatts, direct current; |
• |
“MWh” means megawatt per hour; |
• |
“Noga” means Noga – Independent System Operator Ltd,
which acts as the System Operator company; |
• |
“capacity” or “installed capacity” means, with
respect to each asset, 100% of the capacity of such asset, regardless of OPC’s ownership interest in the entity that owns such asset;
|
• |
“OPC-Hadera” is an Israeli corporation, in which OPC has
a 100% interest; |
• |
“OPC-Rotem” means O.P.C. Rotem Ltd., an Israeli corporation,
in which OPC Israel has an 100% interest; |
• |
“OPC Israel” or OPC Holdings Israel Ltd, is an Israeli corporation
which owns and operates OPC’s businesses in Israel, in which OPC holds an 80% interest; |
• |
“OPC Power” means OPC Power Ventures LP; |
• |
“PPA” means power purchase agreement; |
• |
“Samay I” means Samay I S.A., a Peruvian corporation;
|
• |
“Sorek 2” means OPC Sorek 2 Ltd.; |
• |
the “System Operator” has the meaning as defined in Section
1 of the Israeli Electricity Sector Regulations (Private Conventional Electricity Producer), 2005 entrusted by the Israeli government
to manage and operate Israeli electrical grid; currently Noga acts as the System Operator; |
• |
“Tamar” means Tamar reservoir, a gas field located 90 km
west of Haifa, Israel with estimated reserves of natural gas of approximately 13.17 tcf or approximately 373 BCM; the gas field is owned
and operated by the Tamar Group consisting of Isramco Negev 2 Limited Partnership, Chevron Mediterranean Ltd., Tamar Investment 1 RSC
Limited, Tamar Investment 2 RSC Limited, Dor Gas Exploration Limited Partnership, Everest Infrastructure Limited Partnership and Tamar
Petroleum Ltd.; |
• |
“tcf” means trillion cubic feet, a volume measurement
of natural gas; |
• |
“Title V” refers to a United States federal program designed
to standardize air quality permits and the permitting process for major sources of emissions across the country. which requires the Environmental
Protection Agency (“EPA”) to establish a national, operating permit program; |
• |
“transmission” refers to the bulk transfer of electricity
from generating facilities to the distribution system at load center station in which the electricity is stabilized by means of the transmission
grid; |
• |
“Tzomet” means Tzomet Energy Ltd., an Israeli corporation
in which OPC has a 100% interest; |
• |
“Veridis” means Veridis Power Plants Ltd which owns 20% of
OPC Israel; OPC and Veridis are party to a shareholders’ agreement which governs the relationship between OPC and Veridis in OPC
Israel; and |
• |
the “War” refers to a deadly attack by the Hamas terrorist
organization on communities in the Gaza Strip in the southern part of Israel on October 7, 2023 and the military actions that followed.
|
• |
“cooperation agreements” means one or more vessel sharing
arrangements, swap agreements and slot sharing arrangements; |
• |
“LNG” means liquified natural gas; |
• |
“strategic alliance” means a more extensive type of cooperation
arrangement and is longer-term than a strategic cooperation. It involves cooperation arrangements and usually includes all of ZIM’s
East/West routes, such as Asia-Europe, Asia-Med, Cross Atlantic and Trans Pacific; |
• |
“strategic cooperation” means a more extensive type of cooperation
arrangement, generally being longer term and involving more trade routes. It involves some joint planning mechanism, but joint planning
is less extensive as compared to a strategic alliance. A strategic cooperation can take the form of one or a combination of cooperation
arrangements; and |
• |
“TEU” means twenty-foot equivalent unit. |
• |
our goals and strategies; |
• |
the strategies, business plans and funding requirements of our businesses;
|
• |
expected trends in the industries and markets in which each of our businesses
operate; |
• |
our tax status and treatment and expected status and treatment under
relevant regulations; |
• |
our share repurchase program; |
• |
our treasury activities; |
• |
statements relating to litigation and arbitration; and |
• |
critical accounting estimates and the expected effect of new accounting
standards on Kenon; |
• |
with respect to OPC: |
• |
OPC’s and CPV’s strategy; |
• |
the expected cost and timing of commencement and completion
of development and construction projects and projects under development, as well as the anticipated installed capacities and expected
performance (e.g., efficiency) of such projects, including the required license and approvals for the development of and financing for
projects; |
• |
expected macroeconomic trends in Israel and the US, including the expected
growth in energy demand; |
• |
potential new projects and existing projects; |
• |
gas supply agreements; |
• |
dividend policy; |
• |
expected trends in energy consumption; |
• |
regulatory developments; |
• |
anticipated capital expenditures, and the expected sources of funding
for capital expenditures; |
• |
projections for growth and expected trends in the electricity market
in Israel and the US; |
• |
the gas supply arrangements; and |
• |
the impact of the War. |
• |
with respect to Qoros:
|
• |
statements relating to the agreement to sell Kenon’s remaining
interest in Qoros to the Majority Qoros Shareholder; and |
• |
statements with respect to the litigation and arbitration relating to
Qoros. |
• |
with respect to ZIM: |
• |
expectations regarding general market conditions; |
• |
expectations regarding trends related to the global container shipping
industry, including with respect to fluctuations in vessel and container supply, industry consolidation, demand for containerized shipping
services, bunker and alternative fuel prices, charter and freights rates, container values and other factors affecting supply and demand;
|
• |
plans regarding ZIM’s business strategy, areas of possible expansion
and expected capital spending or operating expenses; |
• |
anticipated ability to obtain additional financing in the future to fund
expenditures; |
• |
expectation of modifications with respect to ZIM’s and other shipping
companies’ operating fleet and lines, including the utilization of larger vessels within certain trade zones and modifications made
in light of environmental regulations; |
• |
the expected benefits of cooperation agreements and strategic partnerships;
|
• |
formation of new alliances among global carriers, changes in and disintegration
of existing alliances and collaborations, including alliances and collaborations to which ZIM is not a party to; |
• |
anticipated insurance costs; |
• |
beliefs regarding the availability of crew; |
• |
expectations regarding ZIM’s environmental and regulatory conditions,
including changes in laws and regulations or actions taken by regulatory authorities, and the expected effect of such regulations;
|
• |
beliefs regarding potential liability from current or future litigation;
|
• |
plans regarding hedging activities; |
• |
ability to pay dividends in accordance with ZIM’s dividend policy;
and |
• |
expectations regarding ZIM’s competition and ability to compete
effectively. |
ITEM 1. |
Identity of Directors, Senior Management and Advisers
|
A. |
Directors and Senior Management |
B. |
Advisers |
C. |
Auditors |
ITEM 2. |
Offer Statistics and Expected Timetable |
A. |
Offer Statistics |
B. |
Methods and Expected Timetable |
ITEM 3. |
Key Information |
A. |
Reserved |
B. |
Capitalization and Indebtedness |
C. |
Reasons for the Offer and Use of Proceeds |
D. |
Risk Factors |
• |
OPC had $1,530 million of outstanding indebtedness and OPC’s proportionate
share of debt (including accrued interest) of CPV associated companies was $839 million, and |
• |
ZIM had outstanding indebtedness (mostly lease liabilities) of approximately
$5.9 billion. |
• |
minimum equity; |
• |
debt service coverage ratio; |
• |
limits on the incurrence of liens or the pledging of certain assets;
|
• |
limits on the incurrence of debt; |
• |
limits on the ability to enter into transactions with affiliates, including
us; |
• |
limits on the ability to pay dividends to shareholders, including us;
|
• |
limits on the ability to sell assets; and |
• |
other non-financial covenants and limitations and various reporting obligations.
|
• |
Transaction Risk—exists
where sales or purchases are denominated in overseas currencies and the exchange rate changes after our entry into a purchase or sale
commitment but prior to the completion of the underlying transaction itself; |
• |
Translation Risk—exists
where the currency in which the results of a business are reported differs from the underlying currency in which the business’ operations
are transacted; |
• |
Economic Risk—exists where
the manufacturing cost base of a business is denominated in a currency different from the currency of the market into which the business’
products are sold; and |
• |
Reinvestment Risk—exists
where our ability to reinvest earnings from operations in one country to fund the capital needs of operations in other countries becomes
limited. |
• |
economic volatility; |
• |
unfavorable changes in laws or regulations; |
• |
fluctuations in revenues, operating margins and/or other financial measures
due to currency exchange rate fluctuations and restrictions on currency and earnings repatriation; |
• |
unfavorable changes in regulated electricity tariffs; |
• |
import or export restrictions or other trade protection measures and/or
licensing requirements; |
• |
costs and risks associated with managing a number of operations across
a number of countries; |
• |
issues related to occupational safety, work hazard, and adherence to
local labor laws and regulations; |
• |
adverse tax developments; |
• |
geopolitical events such as military actions; |
• |
changes in the general political, social and/or economic conditions in
the countries where we operate; and |
• |
the presence of corruption in certain countries. |
ITEM 4. |
Information on the Company |
A. |
History and Development of the Company |
• |
an approximately 55% interest in OPC, an owner, developer and operator
of power generation facilities in the Israeli and US power market; |
• |
an approximately 20.7% interest in ZIM, a large provider of global container
shipping services; and |
• |
a 12% interest in Qoros, a China-based automotive company. |
B. |
Business Overview |
• |
Israel. OPC
manages its activities through OPC Israel, in which OPC holds 80%, with the remaining 20% held by Veridis. OPC is engaged in generation
and supply of electricity and energy to private customers and to Noga (the System Operator) and the development, construction and operation
of power plants and energy generation facilities using natural gas and renewable energy in Israel. |
• |
Renewable Energy
in the U.S. in which OPC (through its 70% interest in CPV Group) is engaged in the initiation, development, construction and operation
of power plants using renewable energy in the United States (solar and wind) and supply of electricity from renewable sources to customers;
and |
• |
Energy Transition in the U.S.
in which OPC (through its 70% interest in CPV Group) is engaged mainly in the initiation, development, construction and operation of conventional
energy power plants in the United States, which supply efficient and reliable electricity. All active power plants in this area of operation
are held through associates (which are not consolidated in OPC’s or our financial statements). |
Power plant/ energy generation
facilities |
Capacity(1) (MW) |
Method of presentation in the
OPC financial statements |
Location |
Type of project / technology
|
Year of commercial operation
| |||||
OPC-Rotem |
466 |
Consolidated |
Mishor Rotem |
Natural gas, combined cycle |
2013 | |||||
Tzomet(2) |
396 |
Consolidated |
Plugot Intersection |
Natural gas, open-cycle |
2023 | |||||
OPC-Hadera(3) |
144 |
Consolidated |
Hadera |
Natural–gas—cogeneration |
2020 | |||||
Kiryat Gat(4) |
75 |
Consolidated |
Kiryat Gat industrial park |
Natural gas, combined cycle |
2019 |
(1) |
As stipulated in the relevant generation license. |
(2) |
Reached COD on June 22, 2023. |
(3) |
Hadera holds the Hadera Energy Center (boilers and turbines located at the premises of
Infinya), which serves as back-up for steam generated by the Hadera power plant. Since the end of 2020, the turbine at the Hadera Energy
Center is not operating. |
(4) |
Purchased in 2023. |
As of December 31, 2023 |
As of December 31, 2022 |
|||||||||||||||||||||||
Entity |
Installed Capacity (MW) |
Net
energy generated (GWh)(1) |
Availability
factor (%)(2) |
Installed Capacity (MW) |
Net
energy generated (GWh)(1) |
Availability
factor (%)(2) |
||||||||||||||||||
OPC-Rotem
|
466 |
3,514 |
93.4 |
% |
466 |
3,285 |
90.5 |
% | ||||||||||||||||
Tzomet(3)
|
396 |
283 |
16.3 |
% |
— |
— |
— |
|||||||||||||||||
OPC-Hadera
|
144 |
939 |
90.7 |
% |
144 |
800 |
73.6 |
% | ||||||||||||||||
Kiryat Gat(4)
|
87 |
433 |
94.4 |
% |
— |
— |
— |
|||||||||||||||||
OPC Total
|
1,081 |
4,085 |
610 |
4,495 |
(1) |
The net generation is the gross production capacity during the year, less energy consumed
by the power plant for its own use. |
(2) |
The availability factor is the period during which the power plant was available for
electricity generation, including scheduled and non-scheduled maintenance work. |
(3) |
The commercial operation date of Tzomet is June 2023. Tzomet is a peaker plant.
|
(4) |
Since completion of the acquisition in March 2023. |
Power plants / energy generation
facilities |
Status |
Location |
||
Sorek 2 |
Under construction |
On the premises of the Sorek B seawater desalination
facility | ||
Energy generation facilities on the consumers’ premises
|
Various stages of development/construction(3)
|
On consumers’ premises across Israel
| ||
Hadera 2 |
Preliminary development |
Hadera, adjacent to the Hadera power plant
| ||
The Ramat Beka Solar Project |
Preliminary development |
Neot Hovav Local Industrial Council |
Plant |
Location |
CPV
Ownership Interest |
Field/
technology |
Installed Capacity
(MW) |
Year of commercial operation | |||||
Conventional
Energy Projects | ||||||||||
Fairview
|
Pennsylvania |
25% |
Conventional gas-fired, combined cycle |
1,050 |
2019 | |||||
Towantic
|
Connecticut |
26% |
Conventional gas-fired (dual fuel / two fuels),
combined cycle |
805 |
2018 | |||||
Maryland
|
Maryland |
25% |
Conventional gas-fired, combined cycle |
745 |
2017 | |||||
Shore
|
New Jersey |
37.53% |
Conventional gas-fired, combined cycle |
725 |
2016 | |||||
Valley
|
New York |
50% |
Conventional gas-fired, dual-fuel, combined cycle
|
720 |
2018 | |||||
Three Rivers
|
Illinois |
10%(1)
|
Natural gas, combined cycle |
1,258 |
2023 | |||||
Renewable
Energy Projects | ||||||||||
Keenan II
|
Oklahoma |
100%(2)
|
Wind |
152 |
2010 | |||||
Mountain Wind(3)
|
Maine |
100% |
Wind |
82 |
Various between 2008 and 2017 | |||||
CPV Maple Hill Solar LLC (“Maple Hill”) |
Pennsylvania |
100%
(subject to the tax equity partner’s share)
(4) |
Solar |
126 MWdc |
Second half of 2023 |
(1) |
Three Rivers power plant commenced its operations in July 2023 (CPV holds a 10% interest
in the power plant). The total construction costs of the project amounted to approximately NIS 4.8 billion (approximately $1.3 billion).
|
(2) |
In April 2021, CPV acquired the remaining 30% interest in this project and, therefore,
has 100% ownership interest. |
(3) |
Acquired in April 2023. |
(4) |
On May 12, 2023, the CPV Group entered into an agreement with
a “tax equity partner” for an investment in the project. According to the agreement, the tax equity partner’s investment
in the project is predicated on the achievement of defined milestones, with part (20%) due at the time of completion of the construction
works, and the remainder (80%) due at the commercial operation date, which was achieved on December 1, 2023. As all milestones were
met the tax equity partner completed its $82 million investment on December 15, 2023. The agreement allows the tax equity partner
the option to sell its equity to CPV Group for a specified amount. |
2023 |
2022 |
|||||||||||||||||||||||
Net Electricity
generation (GWh)(1) |
Actual Generation(2)
(%) |
Actual Availability Percentage (%) |
Net Electricity
generation (GWh)(1) |
Actual Generation (%)(3)
|
Actual Availability Percentage (%)(4)
|
|||||||||||||||||||
Conventional
Energy Projects |
||||||||||||||||||||||||
Fairview
|
7,213 |
81.1 |
% |
84.2 |
% |
7,607 |
85.6 |
% |
87.3 |
% | ||||||||||||||
Towantic
|
5,551 |
77.5 |
% |
91.2 |
% |
4,960 |
69.3 |
% |
83.5 |
% | ||||||||||||||
Maryland
|
4,162 |
64.5 |
% |
93.0 |
% |
3,779 |
69.8 |
% |
90.9 |
% | ||||||||||||||
Shore
|
4,000 |
63.3 |
% |
83.4 |
% |
4,422 |
69.8 |
% |
96.0 |
% | ||||||||||||||
Valley
|
4,392 |
72.3 |
% |
77.6 |
% |
4,831 |
80.0 |
% |
88.6 |
% | ||||||||||||||
Three Rivers
|
2,814 |
64.0 |
% |
74.8 |
% |
n/a |
n/a |
n/a |
||||||||||||||||
Renewable
Energy Projects |
||||||||||||||||||||||||
Keenan II
|
271 |
20.4 |
% |
93.6 |
% |
286 |
21.5 |
% |
92.3 |
% | ||||||||||||||
Mountain Wind
|
140 |
22.0 |
% |
79.6 |
% |
— |
— |
— |
||||||||||||||||
Maple Hill
|
4.9 |
99.8 |
% |
6.6 | % |
— |
— |
— |
(1) |
The net electricity generation is the gross generation during the period less the electricity
consumed for the self-use of the power plants. |
(2) |
The actual generation percentage is the electricity produced by the power plants relative
to the maximum generation capacity during the year and is affected by unplanned outages or maintenance in the power plants which are conducted
in regular time intervals. Major planned maintenance normally takes 30 to 40 days and reduces the power plants’ scope of production
and capacity until maintenance is completed. |
(3) |
The actual generation percentage is the electricity produced by the power plants relative
to the maximum amount of generation capacity during the period and is affected by ordinary course maintenance activities at the power
plants which are scheduled at fixed intervals. Such maintenance activities typically last for approximately 30–50 days and reduce
the power plants’ generation and availability until such maintenance has been completed. The variances regarding the availability
of the production and capacity for the Fairview, Shore and Valley in 2023 compared with 2022 was mainly due to major maintenance outages
taken in 2023. CPV Group's projects may be under planned and unplanned maintenance from time to time, including as occurred in 2023. In
2024, no major planned maintenances are expected in projects (aside from immaterial planned tests). In 2023, Fairview, Shore, and
Valley underwent material planned maintenance. |
(4) |
The availability of Fairview’s & Valley’s production and capacity compared
with 2022 was mainly affected by planned hot gas path inspections. In addition, in the fourth quarter of 2023, planned maintenance
work was performed in the Fairview power plant, which led to variances regarding the availability of its production and capacity. Shore
performed its planned major inspection. Keenan experienced curtailments in generation. |
Project |
Location |
Type of project/ technology |
Planned Capacity (MW) |
Year of construction start |
Projected date of commercial operation |
Expected construction cost for 100% of the project | ||||||
CPV Stagecoach Solar, LLC (“Stagecoach”)(1)
|
Georgia |
Solar |
102 MWdc |
Q2 2022 |
First half 2024 |
Approximately $112 million | ||||||
CPV Backbone Solar, LLC (“Backbone”)(2)
|
Maryland |
Solar |
179 MWdc |
June 2023 |
Second half of 2025 |
Approximately $304 million |
(1) |
The Stagecoach project entered into a PPA with a utility company for the supply of all the electricity to be produced for a period
of up to 30 years from the project’s commercial operation date, at market prices, sale to a global company of 100% of the
project’s Solar Renewable Energy Credits (RECs), as well as a hedge covering the entire electricity price of the quantity that shall
be produced and sold to the utility company, at a fixed price, for a period of 20 years from the date of commercial operation of the project.
|
(2) |
The Backbone project has signed a connection agreement and electricity supply agreement with the global e–commerce company
for a period of 10 years from the start of the commercial operation, for supply of 90% of the electricity expected to be generated by
the project in the said period, and sale of solar renewable energy certificates (“SREC”), which is valid up to 2035. The balance
of the project’s capacity (10%) will be used for supply to customers, retail supply of electricity of the CPV Group or for
sale in the market. |
Power plants / energy generation
facilities |
Status |
Capacity (MW)(1) |
Location |
Technology |
Expected commercial operation
date |
Main customer/ consumer
|
Total expected construction
cost (in NIS million) | |||||||
Sorek 2 |
Under construction |
Approx, 87 |
On the premises of the Sorek B seawater desalination
facility |
Natural gas—Cogeneration |
Second half of 2024(2)
|
Onsite consumers and the System Operator
|
200 | |||||||
Energy generation facilities on the consumers’
premises |
Various stages of development/construction(3)
|
The cumulative amount of the agreements is about
approximately 127 MW. Construction works in respect of approximately 20 MW have been completed but commercial operations has not yet began,
except for immaterial part of the projects in the operation stage; Approximately 25MW are under construction. The remaining capacity of
(83MW) is under various development stages. (4)
|
On the premises of consumers throughout Israel
|
Natural gas, renewable energy (solar) and storage
|
Gradually
from the second half of 2023 and through
the end of 2025, |
Yard consumers and the System Operator.
|
An average of about 4 per MW (a total of about
480) |
(1) |
As stipulated in the relevant generation license. |
(2) |
Currently, certain actions and conditions associated with the
construction and operation of the project have not been completed. Sorek 2 is taking measures to obtain adequate extensions. In addition,
in the fourth quarter of 2023, the construction contractor of the Sorek 2 project delivered a force majeure notification due to outbreak
of the War and Sorek 2 project delivered on its behalf a force majeure notification to the initiator of the desalination facility. The
EA extended project completion dates due to the defense (security) such that an extension of two months was allowed for date of the financial
closing. OPC is currently assessing the impact of such notification on the timeframe for the construction of the project. Completion
of the construction and operation of the Sorek 2 generation facility are subject to fulfillment of conditions and factors that do not
yet exist, including receipt of permits and reaching a financial closing. Ultimately, the date expected for completion of the construction
and commencement of the operation could be delayed as a result of, among other things, a delay in completion of the construction work
(including construction of the desalination facility), delays in receipt of the required permits, disruptions in arrival of equipment,
force majeure events, the occurrence of risk factors to which OPC is exposed, including delays relating to the war or its consequences.
Such delays could impact the project’s costs and could also trigger and increase in costs (beyond the expected cost indicated above)
and/or could constitute non compliance with liabilities to third parties. |
(3) |
The construction of several projects was completed and they are in different stages of
testing and connection to the grid. The remaining projects are in various development stages with certain preconditions for execution
of the projects for construction of facilities for generation of electricity on the customer’s premises (or any of them) had not
yet been fulfilled, and the fulfillment thereof is subject to various factors, such as, licensing, permits, connection to infrastructures
and construction. Due to the War, OPC delivered a force majeure notification to customers. The War and its impacts could have an adverse
impact on the compliance with the expected dates for the commercial operation and the expected costs of the projects. |
(4) |
Each facility with a capacity of up to 16 megawatts. |
Power plant/ energy
generation facilities
|
Status |
Location |
Technology |
Additional details | ||||
The Ramat Beka Solar Project |
Advanced Development |
Neot Hovav Local Industrial Council |
Photovoltaic in combination with storage
|
In May 2023, OPC won the tender issued by ILA for planning and an
option to purchase leasehold rights in land for the construction of renewable energy electricity generation facilities with a capacity
about 245 MW with integration of storage of about 1,375 MWh in relation to three compounds in the Neot Hovav Industrial Regional Council.
On February 5, 2024, the government authorized OPC to prepare on its behalf national infrastructure plans for photovoltaic electricity
generation projects and to submit them to the National Committee for Planning and Building of National Infrastructures. The estimated
construction cost of the project is in the range of NIS 1.93 to NIS 2.0 billion (approximately $532 million to $551 million). |
||||
Hadera 2 |
Initial development |
Hadera, adjacent to the Hadera power plant
|
Conventional with storage capability |
On December 27, 2021, the National Infrastructure Committee
submitted National Infrastructure Plan (“NIP”) 20B for government approval under Section 76C (9) of the Planning and Building
Law, 1965. In December 2022, a renewable option agreement was signed with Infinya Ltd., which awards Hadera 2 an annual option, which
may be renewed for a period of up to 5 years, during which it will be allowed to lease the land adjacent to the Hadera Power plant for
the project. On May 28, 2023, the Israeli government did not approve NIP 20B and returned it to the National Committee for Planning
and Building of National Infrastructures for further discussion. Following this, OPC submitted a petition on behalf of Hadera 2 in respect
of the government decision, which was summarily dismissed on July 19, 2023 on the grounds of failure to exhaust proceedings. OPC continues
to promote NIP 20B and awaits recommencement of the above discussions. | ||||
Intel Israel facilities |
Initial development |
Kiryat Gat |
Conventional |
On March 3, 2024, OPC Power Plants signed a non-binding memorandum
of understanding with Intel Electronics (“Intel”), an OPC existing customer, pursuant to which OPC Israel will construct and
operate a power plant, which will supply electricity to Intel’s facilities, including expansion of the facilities currently being
constructed, for a period of 20 years from the operation date. |
Project |
Location |
Installed Capacity (MW) |
CPV
ownership interest |
Year of commercial operation |
Type of project/ technology / client |
Regulated
market | ||||||
CPV Fairview, LLC (“Fairview”)
|
Pennsylvania |
1,050 |
25% |
2019 |
Gas-fired, combined cycle |
PJM
MAAC | ||||||
CPV
Towantic, LLC (“Towantic”) |
Connecticut |
805 |
26% |
2018 |
Gas-fired (with dual fuel), Combined cycle
|
ISO-NE
CT | ||||||
CPV
Maryland, LLC (“Maryland”) |
Maryland |
745 |
25% |
2017 |
Gas-fired, Combined cycle |
PJM
SW
MAAC | ||||||
CPV Shore Holdings, LLC (“Shore”) |
New Jersey |
725 |
37.53% |
2016 |
Gas-fired, Combined cycle |
PJM EMAAC | ||||||
CPV Valley Holdings, LLC (“Valley”) |
New York |
720 |
50% |
2018 |
Gas-fired, Combined cycle |
NYISO
Zone G | ||||||
CPV Three Rivers LLC (“Three
Rivers”) |
Illinois |
1,258 |
10% |
2023(1)
|
Natural gas, combined cycle |
PJM | ||||||
Renewable
Energy Projects | ||||||||||||
CPV Keenan II Renewable Energy Company, LLC (“Keenan II”) |
Oklahoma |
152 |
100%(2)
|
2010 |
Wind |
SPP
(Long-term PPA) | ||||||
CPV Mountain Wind(3)
|
Maine |
82 |
100% |
Between 2008 and 2017 |
Wind (4 wind power plants) |
ISO-NE market | ||||||
CPV Maple Hill Solar LLC
(“Maple Hill”) |
Pennsylvania |
126 MWdc |
100%(4)
(subject to tax equity partner’s share)
|
Second half of 2023 |
Solar |
PJM
MAAC + PA SRECs
|
(1) |
Three Rivers power plant, which commenced commercial operation in July 2023, is entitled
to receive capacity payments from June 2023. |
(2) |
On April 7, 2021, CPV acquired 30% of the rights in Keenan II from its tax equity partner.
|
(3) |
In April 2023, CPV acquired all rights (100%) in four active wind power plants (the “Mountain
Wind Project”). CPV received (indirectly, through a 100%-held corporation) all of the seller’s rights in the Mountain Wind
Project in consideration for approximately NIS 625 million (approximately $ 175 million) (after adjustments). The purchase consideration
was funded by way of capital injection by CPV’s investors at the total amount of approximately $ 100 million (of which OPC’s
share is 70%), and the remaining balance was funded by a loan from a bank under a financing agreement. |
(4) |
On May 12, 2023, CPV entered into an agreement with a “tax
equity partner” for an investment in the project. According to the agreement, the tax equity partner’s investment in the project
is predicated on the achievement of defined milestones, with part (20%) due at the time of completion of the construction works, and the
remainder (80%) due at the commercial operation date, which was achieved on December 1, 2023. As all milestones were met, the tax
equity partner completed its $82 million investment on December 15, 2023. The agreement gives the tax equity partner the option
to sell its equity to CPV for a specified amount. |
Project |
Location |
Planned Capacity (MW) |
CPV
Ownership Interest |
Year of construction start |
Projected date of commercial operation |
Type of project/ technology |
Tax Equity |
Expected construction cost for 100% of the project | ||||||||
CPV Stagecoach Solar, LLC (“Stagecoach”) |
Georgia |
102 MWdc |
100% |
Q2 2022 |
First half of 2024 |
Solar |
Approximately $52 million(1)
|
Approximately $112 million(2)
| ||||||||
CPV Backbone Solar, LLC (“Backbone”) |
Maryland |
179 MWdc |
100% |
June 2023 |
Second half of 2025 |
Solar |
Approximately $130 million(3)
|
Approximately $304 million(4)
|
(1) |
The CPV Group has signed a non-binding memorandum of understanding
with a tax equity partner, whereby approximately $43 million of such amount is expected to be received on the project’s commercial
operation date and the balance is expected to be received over a period of 10 years. The investment of the tax equity partner is subject
to negotiations and signing of binding agreements. Regarding projects that are entitled to tax benefits of the type of Production Tax
Credits (the “PTC”), CPV’s estimate with respect to the scope of the tax equity partner’s investment is based
on the IRA and estimates with respect to tax equity partners, a tax benefit for every KW/hr of generation, and does not depend on the
anticipated cost of the investment (i.e., does not depend of initiation fees and reimbursement of pre-construction development expenses).
|
(2) |
Includes financing costs under the financing agreement (see, “Item
5 Operating and Financial Review and Prospects—OPC’s Liquidity and Capital Resources—OPC’s Material Indebtedness—United
States”). The project’s expected cost of investment is subject to changes. |
(3) |
The project is located on a former coal mine and, therefore, it is expected to be entitled
to higher tax benefits of 40% in accordance with the IRA. The CPV Group intends to sign an agreement with a tax equity partner in respect
of approximately 40% of the cost of the project and use of the tax credits that are available to the project (subject to appropriate regulatory
arrangements). |
(4) |
Excludes development fees but includes financing costs under
the financing agreement. CPV Group intends to provide the project with solar panels through its existing master agreement for the purchase
of solar panels. The total cost of such project is expected to be approximately $330 million, approximately 40% of which is expected to
be financed by a tax equity partner such that the net investment cost for CPV Group is estimated to be approximately $150 million. In
addition, CPV Group is working to obtain a short term revolving financing facility for part of the remainder of the project cost. Customary
collateral with a value of about $17 million is expected to be provided for purposes of the agreement covering connection to the network
(grid) and the PPA as well as additional development expenses in the project. Construction of the project commenced in June 2023 and commercial
operation in PJM is expected to be reached in the third quarter of 2025. |
Technology |
Advanced |
Early stage |
Total* |
|||||||||
Solar (1) |
1,550 |
1,050 |
2,600 |
|||||||||
Wind (2) |
250 |
1,000 |
1,250 |
|||||||||
Total renewable energy |
1,800 |
2,050 |
3,650 |
|||||||||
Carbon capture projects (natural gas |
||||||||||||
with reduced emissions) |
1,300 |
4,000 |
5,300 |
(1) |
The capacities in the solar technology projects in the advanced development
stages and in the early development stages are about 1,200 MWac and about 850 MWac. |
(2) |
Includes the Rogue’s Wind project, with a capacity of
114 MW in Pennsylvania, which signed a long-term PPA agreement, the terms of which have been improved, and which project is in an advanced
stage of development, the start date of which is expected to be in the first half of 2024. The expected cost of the investment in the
project is estimated at about NIS 1.2 billion (about $0.3 billion), the investment of the tax equity partner is estimated at about NIS
0.5 billion (about $0.1 billion). |
Project |
Location |
Capacity (MW) |
OPC
Ownership Interest |
Projected Year of construction start |
Projected date of commercial operation |
Type of project/ technology |
Activity area and electricity region |
Tax Equity |
Expected construction cost ($ millions) | |||||||||
CPV Rogue’s Wind, LLC
(“Rogue’s Wind”) |
Pennsylvania |
Approx.
114
MW |
100%(1)
|
Second half of
2024 |
First half of
2026(2)
|
Wind |
PJM MAAC |
Approximately $135 million |
Approximately $377 million(3)
|
(1) |
Upon consummation of an agreement with a “tax equity partner” CPV will have
100% of Class B rights. Class A rights are held by tax equity investors, who have excess tax benefits and dividend rights until a certain
return (Tax Flip) is achieved. |
(2) |
The expected date of operation for Rogue’s Wind may be delayed due to delays in
connection with PJM’s interconnection process, including construction works or upgrade works (the project has been issued with interconnection
agreement). Delays may affect Rogue Wind’s ability to meet certain schedule obligations with counterparties and may result in liquidated
damages payments. |
(3) |
Does not include development fees, but includes financing costs under the financing agreement.
|
• |
Gas Supply: a
base contract for purchase and transmission of natural gas which provides for supply of natural
gas at a quantity of up to 180,000 MMBtu per day at a price that is linked to market prices set forth in the agreement. Pursuant to the
agreement, the gas supplier is responsible for transport of natural gas to the designated supply point and is permitted to transport ethane
in lieu of natural gas for up to 25% of the agreed supply quantity. The agreement is valid up to May 31, 2025. |
• |
Maintenance: a maintenance
agreement (MA) with its original equipment manufacturer, for the provision of maintenance services for the combustion turbines.
In consideration for the maintenance services, Fairview pays a fixed and a variable amount as of the date stipulated in the agreement.
The MA period is 25 years beginning in 2016 or ends earlier when specific milestones are reached on the basis of usage and wear and tear.
Fairview has paid an average of approximately $9 million (all-in costs) each year for the past two years. |
• |
Operation: an agreement
for operation and maintenance of the facility. The initial period of the agreement is three years from the completion date of construction
of the facility and includes an extension/renewal clause for a period of one year, unless one of the parties gives notice of termination
of the agreement in accordance with its provisions. The agreement is currently under the automatic annual one-year renewal option. Fairview
has paid an average of approximately $5 million each year over the past two years. |
• |
Hedging: a hedge
agreement on electricity margins of the Revenue Put Option (“RPO”). The RPO is intended to provide CPV a minimum
margin for the term of the agreement. Calculation of the amount for the minimum margin is determined for each contractual year, with the
actual netting dates taking place every three months in respect of the respective partial amount and an annual adjustment is made to calculate
the total annual margin for the year. The RPO has an annual exercise price that covers an exercise period of a fiscal year. To calculate
the gross margin pursuant to the agreement, specific parameters are taken into account, such as utilization, heat rate, the expected generation
levels, forward prices for electricity and gas, gas transmission costs and other specific project costs. The RPO ends on May 31,
2025. |
• |
Management: A CPV entity
served as the asset manager for Fairview until September 2022. In accordance with an inter-company management agreement, one of the other
investors in the project replaced the CPV entity, in accordance with the terms of the agreement. This other investor of the project assumed
the role of asset manager for Fairview starting at October 1, 2022 and the CPV entity will provide certain limited scope services to the
other investor on behalf of Fairview. |
• |
Gas Supply & Transmission:
|
• |
an agreement for the guaranteed gas
transmission of 2,500 MMBtu per day, at the AFT 1 Tariff. The agreement’s initial term ends on March 31, 2025. The agreement
renews automatically for periods of one year each time, unless one of the parties terminates the agreement. |
• |
an agreement for the supply of gas,
pursuant to which up to 125,000 MMBtus per day will be supplied at a price linked to market prices. The agreement has an initial term,
which commenced on April 1, 2023, and ends on March 31, 2025. |
• |
Maintenance: a services
agreement (CSA) with its original equipment manufacturer, for the provision of maintenance services for the combustion turbines.
In consideration for the maintenance services, Towantic pays a fixed and a variable amount as of the date stipulated in the agreement.
The agreement term is 20 years, beginning in 2016 or ends earlier when specific milestones are reached on the basis of usage and
wear and tear. Towantic has paid an average of approximately $8 million (all-in costs) each year for the past two years. |
• |
Operation: an agreement
for operation and maintenance of the facility, which commenced in May 2018. The consideration includes a fixed and variable amount,
a performance-based bonus, and reimbursement for employment expenses, including payroll costs and taxes, subcontractor costs and other
costs. In July 2021, the agreement was extended and the agreement term is from 2022 to 2024. The agreement includes an extension/renewal
clause for a period of one year, unless one of the parties gives a termination notice in accordance with that provided in the agreement.
Towantic has paid an average of approximately $5 million (all-in costs) each year for the past two years. |
• |
Gas Supply: an agreement
for the supply of firm natural gas, pursuant to which up to 132,000 MMBtu per day will be supplied at a price linked to market
prices. The agreement is effective until October 31, 2024. |
• |
Gas Transmission: a natural
gas transmission agreement for guaranteed capacity of up to 132,000 MMBtu/d. The agreement term is 20 years from May 31, 2016,
with an option for Maryland to extend it by an additional 5 years. |
• |
Maintenance: a services
agreement with its original equipment manufacturer for the provision of maintenance services for the combustion turbines. In consideration
for the maintenance services, Maryland pays a fixed and a variable amount as of the date stipulated in the agreement. The agreement
period is 20 years beginning in 2014 or ends earlier when specific milestones are reached on the basis of usage and wear and tear. Maryland
has paid an average of approximately $6 million (all-in costs) each year for the past two years. |
• |
Operation: an agreement
for operation and maintenance of the facility. The consideration includes fixed annual management fees, a performance-based bonus,
and reimbursement of employment expenses, payroll costs and taxes, subcontractor costs and other costs. In March 2021, the agreement was
extended to continue until July 23, 2028 and may be renewed for one-year periods, unless one of the parties gives a termination notice
in accordance with agreement. Maryland has paid an average of approximately $4 million (all-in costs) each year for the past two years.
|
• |
Engineering, Procurement and
Construction Agreement. Maryland signed an Engineering, Procurement and Construction Agreement dated October 31, 2022, for the
construction of a Black Start facility in the event of grid power outages around the Maryland’s site which is expected to commence
operation during 2024. Total contract cost is approximately $30 million to be paid in accordance with a progress payment schedule incorporated
into the agreement. Most of the consideration is financed through a financing agreement entered into by Maryland. |
• |
Gas Supply: an agreement
for supply of natural gas. Pursuant to the agreement, the gas supplier supplies 120,000 MMBtu of gas per day at a price linked
to the market price. The agreement is effective through October 31, 2024. |
• |
Gas Transmission: two
agreements with interstate pipeline companies for the use of 2 different pipeline systems, one of which was operational since 2015
and the second of which became operational in late 2021. Pursuant to the agreements, natural gas connection and transmission services
are provided to Shore by means of a pipeline the start of which is an existing interstate pipe and allows for gas to reach the facility’s
connection point. Shore paid a down payment to one of the pipeline companies for these services. The period of the gas transmission agreements
are 15 years (until April 2030) for one interconnection, with an option to extend the agreement twice by ten years, and 20 years
(until September 2041) for the other interconnection, with an option to extend annually. |
• |
Maintenance: an amended
services agreement with its original equipment manufacturer for the provision of maintenance services for the turbines. In consideration
for the maintenance services, Shore pays a fixed and a variable amount as of the date stipulated in the agreement. The agreement
period is 20 years beginning in 2014 or ends earlier when specific milestones are reached on the basis of usage and wear and tear. Shore
has paid an average of approximately $6 (all-in costs) million each year for the past two years. |
• |
Operation:
an agreement for operation of the facility. The consideration includes fixed annual management
fees, a performance-based bonus and reimbursement of employment expenses, including, payroll and taxes, subcontractor costs and other
costs as provided in the agreement. The agreement includes an extension/renewal clause for a period of one year, unless one of the parties
gives a termination notice in accordance with that provided in the agreement. The agreement is currently under the automatic annual one
year renewal option. Shore has paid an average of approximately $4 million (all-in costs) each year over the past two years. |
• |
Gas Supply: an agreement
for the supply of natural gas of up to 127,200 MMBtu of natural gas per day at a price linked to the market price. Pursuant to
the agreement, the supplier is responsible for transmission of natural gas to the designated supply point and the agreement is effective
through October 31, 2025. |
• |
Gas Transmission: an
agreement with an interstate pipeline company for the licensing, construction, operating and maintenance
of a pipeline and measurement and regulating facilities, from the interstate pipeline system for transmission of natural gas up to the
facility. The supplier provides 127,200 MMBtu per day of firm natural gas delivery at an agreed price during a period ending March 31,
2033, with an option to extend by up to three five-year additional periods. Valley signed an additional agreement for provision of transmission
services (firm) of 35,000 MMBtu per day, for a period of 15 years ending on March 31, 2033, which can deliver gas from a different
location into the firm transportation agreement referenced above. |
• |
Maintenance: an agreement
with its original equipment manufacturer for maintenance services for the fire turbines. The consideration includes fixed and variable
amounts. The agreement period is the earlier of: (i) 132,800 equivalent base load hours; or (ii) 29 years from 2015. Valley
has paid an average of approximately $6 million (all-in costs) each year for the past two years. |
• |
Operation: an operation
and maintenance agreement with one of the partners in the project. The consideration includes fixed annual management fees, an
operation bonus, and reimbursement of certain costs set out in the agreement. The period of the agreement is five years from the completion
date of construction of the facility, and the agreement may be renewed for additional three-year periods unless one of the parties gives
a termination notice in accordance with the agreement. The agreement is currently under the automatic three year renewal option. Valley
has paid an average of approximately $5 million (all-in costs) each year for the past two years. |
• |
Hedging: a
hedge agreement on electricity margins of the RPO type. The RPO is intended to provide CPV a minimum margin for the duration of
the agreement term. Calculation of the amount for the minimum margin is determined for each contractual year, with the actual netting
dates taking place every three months with respect to the respective partial amount and an annual adjustment is made to calculate the
total annual margin, which includes each year for the RPO an annual exercise price covering the exercise period or a fiscal year. To calculate
the minimum gross margin, specific parameters are taken into account, such as utilization, heat rate, the expected generation levels,
forward prices for electricity and gas, gas transport costs and other specific project costs. The RPO ended on May 31, 2023.
|
• |
Gas Supply: two agreements
for the supply of natural gas. The agreements supply 139,500 MMBtu in natural gas per day to the facility, from the operation date
of the facility for a period of five years, and a reduced quantity of 25,000 MMBtu per day from the fifth year of operation of the facility
and up to the tenth year. The price of natural gas delivered under these agreements is linked to the day-ahead electricity prices in the
PJM market. The agreements include an obligation to purchase such fixed volume of natural gas, with a right to resell surplus gas.
|
• |
GSPA. Three Rivers entered
into a Contract for Sale and Purchase of Natural Gas (GSPA) on December 15, 2022. The GSPA requires the supplier to provide gas supply
of up to 200,000 MMBtu/day at a price indexed to market. The agreement had an initial term until January 31, 2023. The agreement is automatically
renewed month-to-month unless one of the parties terminates by notification no less than 5 business days prior to the last day of the
month. |
• |
Gas Interconnection:
two connection agreements for transmission of gas, whereby each of them is sufficient for the
full demand of the facility. |
• |
One agreement is an interconnection agreement with an interstate pipeline
company for transmission of natural gas. The agreement sets forth the responsibility of the parties in connection with the design, construction,
ownership, operation and management of a pipeline as well as the connection and pressure equipment. Based on the agreement, Three Rivers
will bear the costs of all the facilities. |
• |
The second agreement is an additional interconnection agreement with
an interstate pipeline company for transmission of natural gas. As part of the agreement, the counterparty is responsible for the design
and construction to connect to the existing pipeline. The counterparty to the agreement will remain the owner of these facilities and
will operate them, and Three Rivers will bear the development and construction costs. |
• |
Gas Transmission: an
agreement for transmission of gas with an interstate pipeline company and its Canadian affiliate,
for firm transmission of natural gas from Alberta, Canada to the facility. The agreements include capacity of 36.2 MMcf per day, at agreed
prices. The agreement term is 11 years from the signing date of the agreement on November 1, 2020; the counterparty may extend the
agreement for an additional year by means of prior notice of 12 months. |
• |
Equipment: an agreement
for acquisition of equipment for the purchase of power generation equipment and ancillary services, with an international company
specializing in design and manufacture of equipment, including that required for an electricity generation facility. The equipment includes
two units, with each consisting of the following main components: a gas or combustion turbine; a steam generator for heat recovery; a
steam turbine; a generator; a continuous control system for emissions and additional related equipment. The equipment supplier is responsible
for supply and installation in accordance with the agreement. In addition, the supplier is to provide technical consulting services to
Three Rivers in order to support the installation process, commissioning, inspections and operation of the equipment. Pursuant to the
terms and conditions of the agreement, Three Rivers will pay the third party in installments based on reaching milestones. |
• |
EPC: an EPC
agreement with an international engineering, acquisition and construction contractor. Pursuant to the agreement, the contractor
will design and construct the required components of the facility, to integrate all the equipment required for the power plant. Three
Rivers achieved substantial completion in July 2023 and will achieve final completion upon the satisfaction of a final performance test
but no later than the maximum period set in the agreement. |
• |
Maintenance:
a services agreement with its original equipment manufacturer for the provision of maintenance services for the combustion turbines.
In consideration for the maintenance services. Three Rivers pays a fixed and a variable payment. The agreement period is 25 years
beginning in 2020; or ends earlier when specific milestones are reached on the basis of usage and wear and tear. On average, Three
Rivers is expected to pay approximately $6 million (all-in costs) each year. |
• |
Operation: an agreement
for operation and maintenance of the facility. The consideration includes fixed annual management fees, a performance-based bonus,
and reimbursement of employment expenses, payroll costs and taxes, subcontractor costs and other costs. The agreement period will commence
during the construction period, and will continue for approximately 3 years from the construction completion date of the facility,
which occurred in June 2023. On average, Three Rivers is expected to pay approximately $6 million (all-in costs) each year. |
• |
Equity Purchase Agreement:
an agreement for the purchase of the 100% of the outstanding equity interests in Keenan. As a
result of the acquisition in April 2021, CPV holds all of the rights to Keenan. |
• |
PPA:
a wind power energy agreement for sale of renewable energy. Pursuant to the terms and conditions
of the agreement, the purchaser is to receive all of the electricity generated by the wind farm, credits, certificates, similar rights
or other environmental allotments. The consideration includes a fixed payment. The period of the agreement is 20 years, ending in
2030. The purchaser is permitted, with proper notice, to extend the agreement for another five-year period, and to acquire an option to
purchase the project at the end of the agreement period or renewal period at its fair market value, as defined in the agreement and pursuant
to the terms and conditions stipulated therein. |
• |
O&M Agreement: an
agreement for the operation and maintenance of the wind farm which commenced in February 2016. The consideration includes fixed annual
management fees and the agreement lasts for 15 years from the commencement date. On average, Keenan paid approximately $5 million each
year for the past two years. |
• |
Operation:
a master services agreement and an operations agreement with its original equipment manufacturer
for the operation, maintenance and repair of the wind turbines. The consideration includes fixed annual fees, performance-based bonus
(or liquidated damages) and reimbursement of expenses for additional work. The agreement expires in February 2031. Keenan has paid an
average of approximately $6 million (all-in costs) each year for the past 2 years. |
• |
Maintenance: a
master services agreement for the management and maintenance of the four wind facilities (Beaver Ridge, Canton Mountain, Saddleback
Ridge, Spruce Mountain) entered into by Mountain Wind. Staff is shared between the four projects. At all projects except for Beaver Ridge,
the services agreement applies only to work outside the scope of the turbine services which is performed by the original equipment manufacturers.
At Beaver Ridge, where there is no agreement with the original equipment manufacturer, the agreement also covers the direct maintenance
of the wind turbines. The agreement commenced on April 5, 2023 and has an initial two year term. Mountain Wind will pay approximately
$3 million (all-in costs) per year. |
• |
Services Agreements and Operation
Agreements: a master service agreement
and an operation agreement with its original equipment manufacturer for the operation, maintenance,
and repair of the wind turbines is entered by each of Mountain Wind Project with the exception of Beaver Ridge; maintenance at Beaver
Ridge is performed under an agreement by a third-party provider. The agreements for Saddleback Ridge and Canton Mountain were entered
in 2016 and both have 20 years terms with a sunset date of September 16, 2035. The agreement for Spruce Mountain was entered in December
2023 and has an 8-year term. The Beaver Ridge agreement was entered in April 2023 and has a 2-year term. On average, the four projects
are expected to pay approximately $4 million (all-in costs) each year. |
• |
Other contracts:
The projects are engaged in contracts to sell 100% of the electricity and RECs, under separate contracts (PPAs) with local utility companies
and councils, generally for a period of the next 15 to 20 years from the acquisition of the projects by CPV, while most of the capacity
is sold under separate contracts for the next 12 years from the acquisition of the projects by CPV (the periods of the contracts may change
according to termination clauses determined in each agreement). |
• |
Maintenance.
An operating and maintenance agreement with a third-party service provider for services related
to the ongoing operation and maintenance of the Maple Hill solar power generation facility. The agreement has an initial term of three
years, commencing on the date that the service provider actually begins providing services, which occurred in November 2023 and can be
renewed for 2 one-year terms unless one of the parties provides notice on non-renewal in accordance with the agreement. On average, Maple
Hill is expected to pay approximately $0.4 million (all-in costs) each year. |
• |
SREC. An agreement
with an international energy company for the sale of 100% of the SRECs generated in the project through 2027 to an international energy
company. CPV provided collateral for its obligations under the agreement, which include delivery of SRECs generated by the project.
|
• |
Virtual PPA. An
agreement with a third party for the sale of 48% of the total generated electricity, where the electricity price calculation is
performed based on financial netting between the parties for 10 years from the commercial date of operation. In accordance with the agreement,
a net calculation will be made of the difference between the variable price that Maple Hill receives from the system operator and which
is published (the spot price) and the fixed price set with a third party. CPV provided collateral for its obligations under the
agreement which include making certain payments to the other party as part of the settlement of the virtual PPAs. The agreement includes
an option to transition to a physical PPA with a fixed price on fulfillment of certain terms and conditions, which have yet to be met.
|
• |
Energy Sale Agreement (non-firm).
In March 2022, Stagecoach entered into an agreement to sell 100% of non-firm energy to a utility company. The utility company is to receive
all of the energy and ancillary services produced by Stagecoach. The agreement excludes tax attributes arising from the ownership of the
solar project and any environmental attributes generated by Stagecoach. The consideration is based on the hourly avoided energy rate for
each hour of generation up to a maximum energy output as defined in the agreement. The agreement is for a period of 30 years from the
commercial operation date of Stagecoach. The agreement provides for sale to a global utility company of 100% of the project’s SRECs,
as well as a hedge covering the entire electricity price of the quantity that shall be produced and sold to the utility company, at a
fixed price, for a period of 20 years from the date of commercial operation of the project |
• |
Agreement to sell renewable
solar energy credits. In April 2022, Stagecoach entered into an agreement with a global company to sell 100% of the renewable solar
energy credits produced by the solar project, along with a full hedge of the electricity price of the energy that will be generated and
sold under the agreement with the utility company, at a fixed price for 20 years from the commercial operation date. |
• |
EPC. In May 2022, Stagecoach
signed an EPC agreement with an international contractor. Pursuant to the agreement, the contractor is to design, engineer, procure, install,
construct, test, and commission the solar project on a turnkey, guaranteed-completion-date basis. The total consideration to be paid to
the contractor is a fixed amount payable under a milestone schedule. |
• |
Operation and Maintenance Agreement.
In August 2022, Stagecoach entered into an operating and maintenance agreement with a third-party service provider to provide services
during the mobilization and operational period of the Stagecoach solar facility. The agreement is for an initial 3-year term starting
on the date when the service provider actually started rendering operational period services, which is expected to commence in the first
half of 2024. The term of the agreement may be renewed for a maximum of two one-year renewals, unless one of the parties delivers a notice
of non-renewal in accordance with the terms of the agreement. |
• |
EPC. In June 2023, CPV
Group entered into an EPC agreement with a construction contractor in respect of the construction of Backbone Project. In accordance with
the agreement, the contractor is required to plan, purchase, install, build, test, and operate the solar project in full, on a turnkey
basis. The total consideration in the EPC agreement was set at a fixed amount of approximately $175 million, which will be paid in accordance
with the milestones set in the EPC agreement. |
• |
Renewable Solar Energy Credits.
In 2023, Backbone entered into an agreement with a global company to sell 90% of the renewable solar energy credits (which are valid until
2035) produced by the solar project, along with a hedge of the electricity price of the energy that will be generated and sold to PJM,
at a fixed price for 10 years from the commercial operation date. The balance of the project’s capacity (10%) will be used for supply
to active customers, retail supply of electricity of the CPV Group or for sale in the market. |
• |
Rogue’s Wind Energy Project.
In April 2021, an agreement was signed for the sale of all the electricity, and the project’s environmental consideration (including
RECs), benefits relating to availability and accompanying services). The agreement may be adjusted to updated factors of the project.
The agreement was signed for a period of 10 years from the commercial operation date. The CPV Group provided as collateral for securing
its liabilities under the agreement, including execution of certain payments to the other part upon reaching certain milestones (including
commencement of activities) in the project will not be completed in accordance with a specific timetable. |
Weighted production rate (AGOROT
per kWh) |
||||||||||||||||||
Season |
Demand Hours |
January 2023 |
February to March 2023
|
April 2023—January 2024
|
February 2024 |
|||||||||||||
Winter
|
Off—peak |
19.66 |
19.42 |
19.16 |
18.98 |
|||||||||||||
Mid-peak |
- |
- |
- |
- |
||||||||||||||
On-peak |
73.75 |
72.85 |
71.87 |
71.17 |
||||||||||||||
Spring or Fall
|
Off—peak |
18.87 |
18.64 |
18.38 |
18.21 |
|||||||||||||
Mid-peak |
- |
- |
- |
- |
||||||||||||||
On-peak |
29.54 |
22.27 |
21.97 |
21.76 |
||||||||||||||
Summer
|
Off—peak |
23.07 |
22.79 |
22.49 |
22.27 |
|||||||||||||
Mid-peak |
- |
- |
- |
- |
||||||||||||||
On-peak |
118.5 |
117.05 |
115.48 |
114.35 |
||||||||||||||
Weighted Average Rate
|
|
31.19 |
|
30.81 |
|
30.39 |
|
30.07 |
2022
(NIS millions) |
Revised DHCs* |
2023
(NIS millions) |
|||||||
Summer (2 months) |
338 |
Summer (4 months) |
982 |
||||||
Winter (3 months) |
458 |
Winter (3 months) |
495 |
||||||
Transitional Seasons (7 months) |
838 |
Spring and fall (5 months) |
688 |
||||||
Total for the year |
1,634 |
Total for the year |
2,165 |
Site |
Location |
Right in Asset |
Area and Characteristics
| |||
Real estate held through Rotem
| ||||||
Land on which the Rotem Power Plant was built |
Mishor Rotem |
Lease |
About 55 dunams | |||
Real estate held through Hadera
| ||||||
Hadera Energy Center and the Hadera power plant (including emergency
road) |
Hadera |
Rental |
About 30 dunams (Power Plant and Hadera Energy
Center) | |||
Real estate (including options
for land) held by Hadera for Hadera 2 | ||||||
Hadera Expansion—Land near the area of the Hadera Power Plant
|
Hadera |
Rental option
through the end of 2028 |
About 68 dunams | |||
Land Agreement of Rotem 2
| ||||||
Land near to space on which Rotem Power Plant was built |
Mishor Rotem |
Lease |
About 55 dunams | |||
Land held by Tzomet (through
Tzomet HLH General Partner Ltd. and Tzomet Netiv Limited Partnership) | ||||||
Land on which Tzomet is situated |
Plugot Intersection |
Tzomet Netiv Limited Partnership—(by force
of a development agreement with Israel Lands Authority)—Lease |
About 85 dunams | |||
Right-of-use of the land for
Sorek 2 | ||||||
Land on which Sorek 2 is being constructed |
Sorek 2 Desalination Facility |
Right of use |
About 2 dunams | |||
Land held through Kiryat Gat
| ||||||
Land on which Kiryat Gat is being constructed |
Kiryat Gat |
Ownership |
About 12 dunams |
Site |
Location |
The right in the property
|
Area and characteristics
|
Expiration date of right
| ||||
Conventional Energy Projects
| ||||||||
Shore
| ||||||||
Land on which the Shore power plant was constructed |
Middlesex County, New Jersey |
Ownership |
About 111,290 square meters (28 acres) |
N/A | ||||
Maryland
| ||||||||
Land on which the Maryland power plant was constructed |
Charles County, Maryland |
Ownership / easements / licenses and permits /
authority |
About 308,290 square meters (76 acres) |
N/A | ||||
Valley
| ||||||||
Land on which the Valley power plant was constructed |
Wawayanda, Orange County, New York |
Substantive Ownership(1)
/ easements or permits |
About 121,406 square meters (30 acres) |
N/A | ||||
Towantic
| ||||||||
Land on which the Towantic power plant was constructed |
New Haven County, Connecticut |
Ownership / easements |
About 107,242 square meters (26 acres) |
N/A | ||||
Fairview
| ||||||||
Land on which the Fairview power plant was constructed |
Cambria County, Jackson Township, Pennsylvania |
Ownership / easements |
About 352,077 square meters (87 acres) |
N/A | ||||
Three
Rivers | ||||||||
Land on which the Three Rivers power plant was constructed |
Grundy County, Illinois |
Ownership / easements |
About 485,623 square meters (120 acres)
|
N/A | ||||
Renewable Energy Projects
| ||||||||
Keenan
II | ||||||||
Land on which the Keenan II wind farm was constructed |
Woodward County, Oklahoma |
Contractual easements |
Rights to land and the equipment |
December 31, 2040 | ||||
Mountain
Wind | ||||||||
Land on which the CPV Mountain Wind wind farms were constructed
(information is aggregated for the four wind farms of Mountain Wind)
|
Franklin, Oxford and Waldo Counties, Maine |
Contractual easements and leases |
Approx. 15,000,000 square meters (3,700 acres)
|
Forty years (Thirty years for 20% of Spruce Mountain)
Various 2046—2055 | ||||
Maple
Hill | ||||||||
Land on which the Maple Hill power plant was constructed |
Cambria County, Jackson Township, Pennsylvania |
Ownership / easements |
About 3,063,470 square meters (757 acres, of which
11 acres are leased) |
With regard to the leased area December 1, 2058
| ||||
Stagecoach
| ||||||||
Land on which the Stagecoach power plant is being built |
Macon County, Georgia |
Lease Agreement |
Approx. 2,541,426 m² (628 acres) |
May 22, 2042 with option to extend for an additional
20 years | ||||
Land on which the Backbone power plant will be built |
Garrett County, Maryland |
Lease agreement |
Approximately 2,559 acres |
The earlier of March 31, 2025 or commencement
of the operating period, plus an option to extend by five consecutive periods of seven years during operations. |
(1) |
This land is held for the benefit of Valley, which is entitled to transfer it to its
name. |
As of December 31, |
||||||||||||
2023 |
2022 |
2021 |
||||||||||
Number
of employees by category of activity: |
||||||||||||
Headquarters
|
55 |
50 |
34 |
|||||||||
Plant operation, corporate
management, finance, commercial and other |
114 |
100 |
86 |
|||||||||
OPC Total
(in Israel) |
169 |
150 |
120 |
December 31, 2021 |
December 31, 2022 |
|||||||||||||||
Installed Capacity
(MW) |
% of Total Installed Capacity in the Market
|
Installed Capacity
(MW) |
% of Total Installed Capacity in the Market
|
|||||||||||||
IEC
|
11,615 |
54 |
% |
10,527 |
47 |
% | ||||||||||
Independent power producers
(without renewable energy) |
6,231 |
29 |
% |
6,907 |
31 |
% | ||||||||||
Renewable energy (independent
power producers) |
3,656 |
17 |
% |
4,799 |
22 |
% | ||||||||||
Total
in the market |
21,502 |
100 |
% |
22,233 |
100 |
% |
Energy generated (thousands of MWh) |
% of total energy produced in Israel |
Energy generated (thousands of MWh) |
% of total energy produced in Israel |
|||||||||||||
IEC
|
38,223 |
52 |
% |
39,224 |
51 |
% | ||||||||||
Independent power producers
(without renewable energy) |
30,077 |
41 |
% |
30,155 |
39 |
% | ||||||||||
Renewable energy (independent
power producers) |
5,674 |
7.7 |
% |
7,506 |
9.7 |
% | ||||||||||
Total
in the market |
73,975 |
100 |
% |
76,886 |
100 |
% |
• |
An entity may not hold more than 20% of the total planned installed capacity
on the date of sale of all the sites being sold. The generation capacity of an entity’s related parties with generation licenses
will be counted towards such entity’s capacity for purposes of this 20% limitation. In addition, the EA published proposed regulations
in respect of maximum holdings in generation licenses which are not identical to the Competition Authority principles. The Competition
Authority has stated that the relevant limit is 20% of 10,500 MW (which is the anticipated capacity in the market held by private players
by 2023, excluding capacity of the IEC), while, the EA has proposed regulation whereby the relevant limit is 20% of 16,000 MW (including
capacity of the IEC). OPC may be subject to a more restrictive interpretation. The MW currently attributable to OPC, including Oil Refineries
Ltd., or ORL, and Israel Chemicals Ltd. as parties with generation licenses that are related to OPC, is approximately 1,480 MW; and
|
• |
An entity holding a right to a fuel venture may not acquire any of the
sites being sold. |
Main Objectives |
Metric |
2018 |
Objective for 2030 |
Objective for 2050 | ||||
Reducing greenhouse gas emissions in the energy
sector |
Percentage reduction of greenhouse gas emissions
compared with 2015 |
0% |
22% |
80% | ||||
Reducing greenhouse gas emissions in the electricity
sector |
Percentage reduction of greenhouse gas emissions
compared with 2015 |
7.5% |
30% |
75%-85% | ||||
Energy efficiency |
Average annual improvement in energy intensity
(TW/NIS million) |
0.7% |
Annual improvement of 1.3% in energy intensity
|
Annual improvement of 1.3% in energy intensity
| ||||
Use of coal |
Percentage of coal in the electricity generation
mix |
30% |
0% |
0% |
• |
Conventional technology—electricity
generation using fossil fuel (natural gas, diesel oil or carbon). As of December 31, 2022, the total installed capacity in this technology
which is primarily held by the independent producers, is about 6,607 MW. Gas-fired combined cycle generation facilities are planned to
be operational during most hours over the year. Conventional open cycle power plants (the “peaker power plants”) are generally
planned to operate for a number of hours during the day; these power plants are operated when the demand for electricity exceeds the supply–-
whether due to demand peaks, as backup in case of malfunctions in other generation facilities, or as a supplement when solar energy is
unavailable—whether in the early morning hours or at night. |
• |
Cogeneration technology—electricity
generation using facilities that simultaneously generate both electrical energy and useful thermal energy (steam) from a single source
of energy. Exercise of the quota for producers using this technology is fully utilized. |
• |
Renewable energy—generation
of electric power the source of energy of which includes, inter alia, sun, wind, water or waste. In November 2020, the Israeli government
updated the generation targets for renewable energy to 30% of the consumption up to 2030. As of the end of 2022, the installed capacity
of renewable energy generation facilities was 4,795 MW. In recent years, there has been an uptick in the entrance of electricity
producers and generation facilities that use renewable energies in the electricity generation market, including solar energy, wind energy,
and storage; that use the grid resources. In 2023, most of the renewable energy generation activities was sold to the System Operator
or for producer’s own consumption and to the onsite consumers. |
• |
Pumped storage energy—generation
of electricity using an electrical pump connected to the power grid in order to pump water from a lower water reservoir to an upper water
reservoir, while taking advantage of the height differences between them in order to power an electric turbine. The capacity of one of
the production facilities (which is in operation) using this technology amounts to 300 MW, with two additional facilities using this technology
with capacity of approximately 800 MW under construction. |
• |
Energy storage—this is
possible through a range of technologies, including, among others, pumped storage, mechanical storage (for example compressed air) and
chemical storage (for example batteries). The use of this technology is currently negligible; however, it is expected to increase significantly
in the upcoming years due to the need for storage facilities as a result of the anticipated increase in renewable energies, due to, among
other things, the renewable energies generation targets. In particular, based on study conducted by EA, compliance with the target for
renewable energies up to 2030 will require construction of storage facilities with a capacity of thousands of MWh, deriving from the readiness
of the technology and the economic feasibility of its use. OPC takes steps to integrate energy storage. For example, OPC entered into
a number of agreements for generation of electricity at the consumers’ premises, which allow OPC to build storage facilities as
well as in the Ramat Beka Solar Project. |
1. |
Capacity and Energy to the IEC: according to the IEC PPA, OPC-Rotem is obligated to allocate
its full capacity to the IEC. In return, the IEC shall pay OPC-Rotem a monthly payment for each available MW, net, that was available
to the IEC. In addition, when the IEC requests to dispatch OPC-Rotem, the IEC shall pay a variable payment based on the cost of fuel and
the efficiency of the station. This payment will cover the variable cost deriving from the operation of the OPC-Rotem Power station and
the generation of electricity. Subject to the provisions of the IEC PPA, in the event of ongoing failure in the supply of natural gas,
OPC-Rotem is entitled to make OPC-Rotem power plant’s capacity available to the System Operator against reimbursement in respect
of the cost of using diesel fuel (in respect of which Rotem pays an annual premium), and receipt of payment for capacity. The provision
of capacity to the System Operator has a significantly lower economic viability than that of sale to consumers. |
2. |
Sale of energy to end users: OPC-Rotem is allowed to inform the IEC, subject to the provision
of advanced notice, that it is releasing itself in whole or in part from the allocation of capacity to the IEC, and extract (in whole
or in part) the capacity allocated to the IEC, in order to sell electricity to private customers pursuant to the Electricity Sector Law.
OPC-Rotem may, subject to 12-months’ advance notice, re-include the excluded capacity (in whole or in part) as capacity sold to
the IEC. |
1. |
At peak and mid-peak times, one of the following shall apply: |
a. |
each year, the IPP may sell up to 70% of the total electrical energy, calculated annually,
produced in its facility to the IEC—for up to 12 years from the date of the grant of the license; or |
b. |
each year, the IPP may sell up to 50% of the total electrical energy, calculated annually,
produced in its facility to the IEC—for up to 18 years from the date of the grant of the license. |
2. |
At low demand times, IPPs with units with an installed capacity of up to 175 MW, may
sell electrical energy produced by it with a capacity of up to 35 MW, calculated annually calculated on an annual basis. |
1. |
CPV is required to hold permits in order to operate and/or construct the power plants,
the purpose of which is prevention or reduction of air pollution. The power plants may also be required to hold permits for flowing water,
waste-water and other waste into the local sewer systems or into other water sources in the United States. |
2. |
Due to the height and location of the exhaust stacks and other components of the generation
facilities, which could endanger the air traffic, the power plants are required to hold a permit for construction of the stacks and additional
components in the generation facilities. This permit is issued by the Federal Aviation Authority (FAA). |
3. |
Electricity production facilities using renewable energy are often required to hold coverage
in accordance with general permits applicable to flood water and, the discharge of dredged and fill materials to the ‘Waters of
the U.S.’ Depending on the area of the affected site, these facilities may be required to obtain individual permits from ACOE in
respect of those effects; however, generally, it is possible to build projects in places that will not require such permits. |
4. |
State and local permits for renewable energy facilities (the permit’s requirements
depend on the state in which the project is built and its location within the state). |
Geographic trade zone |
Year ended December 31,
|
|||||||||||||
(percentage of total TEUs carried for the period)
|
Primary trade |
2023 |
2022 |
2021 |
||||||||||
Pacific
|
Transpacific |
38 |
% |
34 |
% |
39 |
% | |||||||
Cross-Suez
|
Asia-Europe |
12 |
% |
13 |
% |
10 |
% | |||||||
Atlantic-Europe
|
Atlantic |
13 |
% |
15 |
% |
18 |
% | |||||||
Intra-Asia
|
Intra-Asia |
28 |
% |
31 |
% |
27 |
% | |||||||
Latin America
|
Intra-America |
9 |
% |
7 |
% |
6 |
% | |||||||
100 |
% |
100 |
% |
100 |
% |
Type of Container |
Type of Cargo |
Quantity |
TEUs |
|||||||
Dry van containers |
Most general cargo, including commodities in bundles, cartons, boxes,
loose cargo, bulk cargo and furniture |
1,824,378 |
3,092,964 |
|||||||
Reefer containers
|
Temperature controlled cargo, including pharmaceuticals, electronics
and perishable cargo |
100,510 |
198,907 |
|||||||
Other specialized containers |
Heavy cargo and goods of excess height and/or width, such as machinery,
vehicles and building |
56,173 |
70,748 |
|||||||
Total |
1,981,061 |
3,362,619 |
Number |
Capacity
(TEU) |
Other Vessels |
Total |
|||||||||||||
Vessels owned
by ZIM |
9 |
31,842 |
— |
9 |
||||||||||||
Vessels chartered
from parties related to ZIM |
1 |
4,253 |
2 |
3 |
||||||||||||
Periods up to
1 year (from December 31, 2023) |
1 |
4,253 |
1 |
2 |
||||||||||||
Periods between 1 to 5 years
(from December 31, 2023) |
— |
— |
1 |
1 |
||||||||||||
Periods over
5 years (from December 31, 2023) |
— |
— |
— |
— |
||||||||||||
Vessels chartered
from third parties |
118 |
602,706 |
14 |
132 |
||||||||||||
Periods up to
1 year (from December 31, 2023) |
32 |
105,526 |
— |
32 |
||||||||||||
Periods between 1 to 5 years
(from December 31, 2023) |
74 |
355,584 |
14 |
88 |
||||||||||||
Periods over
5 years (from December 31, 2023) |
12 |
141,596 |
— |
12 |
||||||||||||
Total(1)
|
128 |
638,801 |
16 |
144 |
(1) |
Under ZIM’s time charters, the vessel owner is responsible for operational costs
and technical management of the vessel, such as crew, maintenance and repairs including periodic drydocking, cleaning and painting and
maintenance work required by regulations, and certain insurance costs. Transport expenses such as bunker and port canal costs are borne
by ZIM. Operational management services include the chartering-in, sale and purchase of vessels and accounting services, while technical
management services include, among others, selecting, engaging, and training competent personnel to supervise the maintenance and general
efficiency of ZIM’s vessels; arranging and supervising the maintenance, drydockings, repairs, alterations and upkeep of the vessels,
the requirements and recommendations of each vessel’s classification society, and relevant international regulations and maintaining
necessary certifications and ensuring that the vessels comply with the law of their flag state. |
• |
Slot swap agreements. ZIM enters
into agreements with other carriers for the exchange of vessel space, or “slots”, for repositioning of empty containers. Under
these agreements, other carriers offer ZIM space on their own operated vessels, in exchange for space on its vessels for the purpose of
repositioning empty containers. ZIM has greatly developed this type of cooperation. ZIM has slot swap agreements with 15 carriers and
exchange thousands of TEUs each year. |
• |
Slot sale agreements. ZIM sells
slots on board its vessels to transport empty containers. |
• |
One-way container lease. ZIM
uses leasing companies and other shipping liners’ empty containers to move cargo from locations with increased demand to over-supplied
locations. ZIM is a global leader in one-way container volumes. |
• |
Equipment sub-leases. ZIM leases
its equipment to other carriers and freight forwarders in order to reduce its container repositioning and evacuation costs. |
Geographic trade zone
| ||||||||||
Partner |
Pacific |
Cross-Suez |
Intra-Asia |
Atlantic-Europe |
Latin America | |||||
A.P.
Moller-Maersk(1) |
✓ |
✓ |
✓ | |||||||
Mediterranean
Shipping Company(1) |
✓ |
✓ |
✓ |
✓ |
✓ | |||||
CMA
CGM S.A. |
✓ |
|||||||||
Evergreen
Marine Corporation |
✓ |
|||||||||
Hapag-Lloyd
AG(2) |
✓ |
✓ |
||||||||
China
Ocean Shipping Company (COSCO) |
✓ |
✓ |
||||||||
ONE |
✓ |
✓ |
||||||||
Orient Overseas
Container Line Limited (OOCL) |
✓ |
|||||||||
Yang
Ming Marine Transport Corporation |
✓ |
✓ |
||||||||
Hyundai
Merchant Marine Co., Ltd. |
✓ |
|||||||||
Others |
✓ |
✓ |
(1) |
ZIM’s cooperation with Maersk and MSC is under the 2M Alliance framework, except:
(i) its collaboration agreements with MSC as of July and September 2023 (as detailed above); (ii) its separate bilateral cooperation agreement
with MSC in the Latin America; and (iii) its separate bilateral cooperation agreement with Maersk in the Latin America and Intra-Asia
trades. |
(2) |
With respect to the Atlantic-Europe trade, ZIM has a swap agreement with THE Alliance
member Hapag-Lloyd, supporting ZIM loadings on THE Alliance service on this trade. ZIM also has a separate bilateral agreement with respect
to the Atlantic-Europe trade with Hapag-Lloyd in its standalone capacity. |
• |
ZIM must be, at all times, a company incorporated and registered in Israel,
with its headquarters and principal and registered office domiciled in Israel. |
• |
Subject to certain exceptions, ZIM must maintain a minimal fleet of 11
seaworthy vessels that are fully owned by ZIM, either directly or indirectly through its subsidiaries, at least three of which must be
capable of carrying general cargo. Subject to certain exceptions, any transfer of vessels in violation thereof shall be invalid unless
approved in advance by the State of Israel pursuant to the mechanism set forth in ZIM’s amended and restated articles of association.
|
• |
At least a majority of the members of ZIM’s board of directors,
including the chairperson of the board and ZIM’s chief executive officer, must be Israeli citizens. |
• |
The State of Israel must provide prior written consent for any holding
or transfer or issuance of shares that confers possession of 35% or more of ZIM’s issued share capital, or that provides control
over ZIM, including as a result of a voting agreement. |
• |
Any transfer of shares that confers its owner with a holding of more
than 24% but not more than 35% of ZIM’s issued share capital will require an advance notice to the State of Israel which will include
full details regarding the proposed transferor and transferee, the percentage of shares to be held by the transferee after the transfer
and relevant details regarding the transaction, including voting agreements and agreements for the appointment of directors (if any).
If the State of Israel shall be of the opinion that the transfer of shares may possibly harm the security interests of the State of Israel
or any of its vital interests or that it has not received the relevant information for the purpose of reaching its decision, the State
of Israel shall be entitled to serve notice, within 30 days, that it objects to the transfer, giving reason for its objection. In such
circumstances, the party requesting the transfer may initiate proceedings in connection with this matter with the competent court, which
will consider and rule on the matter. |
• |
The State of Israel must consent in writing to any winding-up, merger
or spin-off, except for certain mergers with subsidiaries that would not impact the Special State Share or the minimal fleet. |
• |
ZIM must provide governance, operational and financial information to
the State of Israel similar to information that ZIM provides to its ordinary shareholders. In addition, ZIM must provide the State of
Israel with particular information related to ZIM’s compliance with the terms of the Special State share and other information reasonably
required to safeguard the State of Israel’s vital interests. |
• |
Any amendment, review or cancellation of the rights afforded to the State
of Israel by the Special State Share must be approved in writing by the State of Israel prior to its effectiveness. |
C. |
Organizational Structure |
D. |
Property, Plants and Equipment |
ITEM 4A. |
Unresolved Staff Comments |
ITEM 5. |
Operating and Financial Review and Prospects
|
Ownership
Percentage |
Method of Accounting
|
Treatment in Consolidated Financial Statements | |||
OPC
|
54.7% |
Consolidated |
Consolidated | ||
ZIM
|
20.7% |
Equity |
Share in profits of associated companies, net of tax |
Year Ended December 31, 2023 |
||||||||||||||||||||
OPC Israel |
CPV |
ZIM |
Other(1)
|
Consolidated Results |
||||||||||||||||
(in millions of USD, unless otherwise indicated) |
||||||||||||||||||||
Revenue
|
619 |
73 |
— |
— |
692 |
|||||||||||||||
Depreciation and amortization
|
(66 |
) |
(25 |
) |
— |
— |
(91 |
) | ||||||||||||
Financing income
|
6 |
6 |
— |
27 |
39 |
|||||||||||||||
Financing expenses
|
(48 |
) |
(17 |
) |
— |
(1 |
) |
(66 |
) | |||||||||||
Share in profit / (loss) of associated companies |
— |
66 |
(266 |
) |
— |
(200 |
) | |||||||||||||
Losses related to ZIM
|
— |
— |
(1 |
) |
— |
(1 |
) | |||||||||||||
Profit / (Loss) before taxes
|
49 |
17 |
(267 |
) |
15 |
(186 |
) | |||||||||||||
Income tax (expense)/benefit
|
(14 |
) |
(5 |
) |
— |
(6 |
) |
(25 |
) | |||||||||||
Profit / (Loss) from continuing operations
|
35 |
12 |
(267 |
) |
9 |
(211 |
) | |||||||||||||
Segment assets(2)
|
1,673 |
1,103 |
— |
629 |
3,405 |
|||||||||||||||
Investments in associated companies
|
— |
703 |
— |
— |
703 |
|||||||||||||||
Segment liabilities
|
1,423 |
610 |
— |
5 |
2,038 |
(1) |
Includes the results of Kenon’s, Qoros’ and IC Power’s holding company (including assets
and liabilities) and general and administrative expenses. |
(2) |
Excludes investments in associates. |
Year Ended December 31, 2022
|
||||||||||||||||||||
OPC Israel |
CPV |
ZIM |
Other(1)
|
Consolidated Results
|
||||||||||||||||
(in millions of USD, unless
otherwise indicated) |
||||||||||||||||||||
Revenue
|
517 |
57 |
— |
— |
574 |
|||||||||||||||
Depreciation
and amortization |
(47 |
) |
(16 |
) |
— |
— |
(63 |
) | ||||||||||||
Financing income
|
10 |
25 |
— |
10 |
45 |
|||||||||||||||
Financing expenses
|
(42 |
) |
(7 |
) |
— |
(1 |
) |
(50 |
) | |||||||||||
Gains related to ZIM
|
— |
— |
(728 |
) |
— |
(728 |
) | |||||||||||||
Share in profit
of associated companies |
— |
85 |
1,033 |
— |
1,118 |
|||||||||||||||
Losses related
to ZIM |
— |
— |
(728 |
) |
— |
(728 |
) | |||||||||||||
Profit / (Loss)
before taxes |
24 |
61 |
305 |
(2 |
) |
388 |
||||||||||||||
Income tax (expense)/benefit
|
(10 |
) |
(10 |
) |
— |
(18 |
) |
(38 |
) | |||||||||||
Profit
/ (Loss) from continuing operations |
14 |
51 |
305 |
(20 |
) |
350 |
||||||||||||||
Segment assets(2)
|
1,504 |
553 |
— |
636 |
2,693 |
|||||||||||||||
Investments
in associated companies |
— |
652 |
427 |
— |
1,079 |
|||||||||||||||
Segment liabilities
|
1,226 |
242 |
— |
8 |
1,476 |
(1) |
Includes the results of Kenon’s, Qoros’ and IC Power’s holding company
(including assets and liabilities) and general and administrative expenses. |
(2) |
Excludes investments in associates. |
2023 |
2022 |
|||||||
Revenue
|
692 |
574 |
||||||
Cost of Sales (excluding
depreciation and amortization) |
(494 |
) |
(417 |
) | ||||
Net Profit |
47 |
65 |
||||||
Adjusted EBITDA(1)
|
304 |
250 |
||||||
Total Debt(2)
|
1,530 |
1,163 |
(1) |
OPC defines “EBITDA” as net profit/(loss) before
depreciation and amortization, financing expenses, net, share of depreciation and amortization and financing expenses, net, included within
share of profit of associated companies, net and income tax expense (benefit), and “Adjusted EBITDA” as EBITDA after adjustments
in respect of changes in fair value of derivative financial instruments and items not in the ordinary course of OPC’s business and
changes in net expenses, not in the ordinary course of business and/or of a non-recurring nature. EBITDA and Adjusted EBITDA are not recognized under IFRS or any other generally accepted accounting principles as a measure of financial performance and should not be considered as a substitute for net income or loss, cash flow from operations or other measures of operating performance or liquidity determined in accordance with IFRS. EBITDA and Adjusted EBITDA are not intended to represent funds available for dividends or other discretionary uses because those funds may be required for debt service, capital expenditures, working capital and other commitments and contingencies. EBITDA and Adjusted EBITDA present limitations that impair its use as a measure of OPC’s profitability since it does not take into consideration certain costs and expenses that result from its business that could have a significant effect on OPC’s net loss, such as finance expenses, taxes and depreciation and amortization. |
(2) |
Includes short-term and long-term debt. |
2023 |
2022 |
|||||||
Net profit/(loss) for the
period |
47 |
65 |
||||||
Depreciation and amortization
|
91 |
63 |
||||||
Financing expenses, net
|
53 |
14 |
||||||
Share of depreciation and
amortization and financing expenses, net, included within share of profit of associated companies, net |
91 |
83 |
||||||
Income tax expense/(benefit)
|
19 |
20 |
||||||
EBITDA
|
301 |
245 |
||||||
Changes in net expenses,
not in the ordinary course of business and/or of a non-recurring nature |
5 |
2 |
||||||
Share of changes in fair
value of derivative financial instruments |
(2 |
) |
3 |
|||||
Adjusted
EBITDA |
304 |
250 |
Year Ended |
||||||||||||
Region
|
December 31 |
|||||||||||
(Project)
|
2023 |
2022 |
Change |
|||||||||
PJM West (Shore, Maryland) |
33.06 |
73.09 |
(55 |
)% | ||||||||
PJM AEP Dayton (Fairview) |
30.81 |
69.42 |
(56 |
)% | ||||||||
New York Zone G (Valley) |
33.27 |
82.21 |
(60 |
)% | ||||||||
Mass Hub (Towantic) |
36.82 |
85.56 |
(57 |
)% | ||||||||
PJM ComEd (Three Rivers) |
26.68 |
60.40 |
(56 |
)% |
For the year ended December
31 |
||||||||||||
Power
plant |
2023 |
2022 |
2021 |
|||||||||
Shore |
(8.32 |
) |
(8.90 |
) |
(6.45 |
) | ||||||
Maryland |
2.47 |
5.27 |
2.29 |
|||||||||
Fairview |
(1.90 |
) |
(4.14 |
) |
(4.03 |
) | ||||||
Valley |
(1.41 |
) |
(4.74 |
) |
(2.04 |
) | ||||||
Towantic |
(3.02 |
) |
(4.11 |
) |
(2.83 |
) | ||||||
Three Rivers |
(1.18 |
) |
(0.99 |
) |
(0.44 |
) |
Year Ended |
||||||||||||
Region
|
December 31 |
|||||||||||
(Power
Plant) |
2023 |
2022 |
Change |
|||||||||
Texas Eastern M‑3 (Shore, Valley—70%) |
1.90 |
6.80 |
(72 |
)% | ||||||||
Transco Zone 5 North (Maryland) |
2.74 |
8.55 |
(68 |
)% | ||||||||
Texas Eastern M‑2 (Fairview) |
1.63 |
5.53 |
(71 |
)% | ||||||||
Dominion South Pt (Valley—30%) |
1.63 |
5.51 |
(70 |
)% | ||||||||
Algonquin City Gate (Towantic) |
2.94 |
9.15 |
(68 |
)% | ||||||||
Chicago City Gate (Three Rivers) |
N/A |
N/A |
N/A |
* |
Source: The Day‑Ahead prices at gas Midpoints as reported in Platt’s Gas
Daily. The actual gas prices of the power plants of the CPV Group could be significantly different. |
For the |
||||||||||||
Year Ended |
||||||||||||
Power
Plant |
December 31 |
|||||||||||
(Region)
|
2023 |
2022 |
Change |
|||||||||
Shore |
19.95 |
26.17 |
(24 |
)% | ||||||||
Maryland |
14.15 |
14.10 |
– |
|||||||||
Valley |
20.72 |
37.96 |
(45 |
)% | ||||||||
Towantic |
17.71 |
26.09 |
(32 |
)% | ||||||||
Fairview |
20.22 |
33.48 |
(40 |
)% | ||||||||
Three Rivers
|
– |
– |
– |
* |
Based on electricity prices as shown in the above table, with
a discount for the thermal conversion ratio (heat rate) of 6.9 MMBtu/MWh for Maryland, Shore and Valley, and a thermal conversion ratio
of 6.5 MMBtu/MWh for Three Rivers, Towantic and Fairview. The actual energy margins of the power plants of the CPV Group could be significantly
different due to, among other things, the existence of Power Basis as described above. |
2024 | |
Expected generation (MWh) |
9,773,754 |
Net scope of the hedged
energy margin (% of the power plant’s capacity based on the expected generation) (1) |
50% |
Net hedged energy margin
(millions of $) |
≈ 74.9 |
Net hedged energy margin
(MWh/$) |
15.30 |
Net market prices of energy
margin (MWh/$) (2) |
16.49 |
2024 | |
Scope of the secured capacity
revenues (% of the power plant’s capacity) |
89% |
Capacity payments (millions
of $) |
≈ 56 |
Sub-zone
|
CPV
power plants(1) |
2024/2025
|
2023/2024(2)
|
2022/2023
|
2021/2022
|
PJM—RTO |
-- |
28.92 |
34.13 |
50 |
140 |
PJM COMED |
Three Rivers |
28.92 |
34.13 |
- |
- |
PJM MAAC |
Fairview, Maryland, Maple Hill |
49.49 |
49.49 |
95.79 |
140 |
PJM EMAAC |
Shore |
54.95 |
49.49 |
97.86 |
165.73 |
Sub-zone
|
CPV
power plants |
Winter
2023/2024 |
Summer
2023 |
Winter
2022/2023 |
Summer
2022 |
NYISO Rest of the Market |
- |
127.25 |
153.26 |
39.23 |
110.87 |
Lower Hudson Valley |
Valley |
128.9 |
164.35 |
43.43 |
151.63 |
Sub-area
|
CPV
power plants |
2027/2028
|
2026/2027
|
2025/2026
|
ISO-NE Rest of the market |
Towantic |
117.70 |
85.15 |
85.15 |
• |
local shipping agencies’ effectiveness in capturing such demand;
|
• |
level of customer service, which affects ZIM’s ability to retain
and attract customers; |
• |
ability to effectively deploy capacity to meet such demand; |
• |
operating efficiency; and |
• |
ability to establish and operate existing and new services in markets
where there is growing demand. |
• |
cyclical demand for container shipping services relative to the supply
of vessel and container capacity; |
• |
competition in specific trades; |
• |
costs of operation (including bunker, terminal and charter costs);
|
• |
the particular dominant leg on which the cargo is transported;
|
• |
average vessel size in specific trades; |
• |
the origin and destination points selected by the shipper; and
|
• |
the type of cargo and container type. |
A. |
Operating Results |
Year Ended December 31, 2023 |
||||||||||||||||||||
OPC Israel |
CPV |
ZIM |
Other(1)
|
Consolidated Results |
||||||||||||||||
(in millions of USD, unless otherwise indicated) |
||||||||||||||||||||
Revenue
|
619 |
73 |
— |
— |
692 |
|||||||||||||||
Depreciation and amortization
|
(66 |
) |
(25 |
) |
— |
— |
(91 |
) | ||||||||||||
Financing income
|
6 |
6 |
— |
27 |
39 |
|||||||||||||||
Financing expenses
|
(48 |
) |
(17 |
) |
— |
(1 |
) |
(66 |
) | |||||||||||
Share in profit/(loss) of associated companies
|
— |
66 |
(266 |
) |
— |
(200 |
) | |||||||||||||
Losses related to ZIM
|
— |
— |
(1 |
) |
— |
(1 |
) | |||||||||||||
Profit / (Loss) before taxes
|
49 |
17 |
(267 |
) |
15 |
(186 |
) | |||||||||||||
Income tax expense |
(14 |
) |
(5 |
) |
— |
(6 |
) |
(25 |
) | |||||||||||
Profit / (Loss) from continuing operations
|
35 |
12 |
(267 |
) |
9 |
(211 |
) | |||||||||||||
Segment assets(2)
|
1,673 |
1,103 |
— |
629 |
3,405 |
|||||||||||||||
Investments in associated companies
|
— |
703 |
— |
— |
703 |
|||||||||||||||
Segment liabilities
|
1,423 |
610 |
— |
5 |
2,038 |
(1) |
Includes the results of Kenon’s, Qoros’ and IC Power’s holding company
(including assets and liabilities) and general and administrative expenses. |
(2) |
Excludes investments in associates. |
Year Ended December 31, 2022
|
||||||||||||||||||||
OPC Israel |
CPV |
ZIM |
Other(1)
|
Consolidated Results
|
||||||||||||||||
(in millions of USD, unless
otherwise indicated) |
||||||||||||||||||||
Revenue
|
517 |
57 |
— |
— |
574 |
|||||||||||||||
Depreciation and amortization
|
(47 |
) |
(16 |
) |
— |
— |
(63 |
) | ||||||||||||
Financing income
|
10 |
25 |
— |
10 |
45 |
|||||||||||||||
Financing expenses |
(42 |
) |
(7 |
) |
— |
(1 |
) |
(50 |
) | |||||||||||
Gains related to ZIM
|
— |
— |
(728 |
) |
— |
(728 |
) | |||||||||||||
Share in profit of associated
companies |
— |
85 |
1,033 |
— |
1,118 |
|||||||||||||||
Profit / (Loss) before taxes
|
24 |
61 |
305 |
(2 |
) |
388 |
||||||||||||||
Income tax expense
|
(10 |
) |
(10 |
) |
— |
(18 |
) |
(38 |
) | |||||||||||
Profit
/ (Loss) from continuing operations |
14 |
51 |
305 |
(20 |
) |
350 |
||||||||||||||
Segment assets(2)
|
1,504 |
553 |
— |
636 |
2,693 |
|||||||||||||||
Investments in associated
companies |
— |
652 |
427 |
— |
1,079 |
|||||||||||||||
Segment liabilities
|
1,226 |
242 |
— |
8 |
1,476 |
(1) |
Includes the results of Kenon’s, Qoros’ and IC Power’s holding company
(including assets and liabilities) and general and administrative expenses. |
(2) |
Excludes investments in associates. |
For the year ended December 31, |
||||||||
2023 |
2022 |
|||||||
$ millions |
||||||||
Israel
|
619 |
517 |
||||||
U.S.
|
73 |
57 |
||||||
Total
|
692 |
574 |
• |
Revenue from sale of energy
to private customers in Israel—Increased by $25 million in 2023 as compared to 2022. Excluding the impact of translating
OPC’s revenue from NIS to USD, such revenues increased by $57 million primarily as a result of (i) an increase of $49 million from
an increase in customer consumption and (ii) an increase of $24 million from the consolidation of results of the Kiryat Gat Power Plant
which was consolidated starting in Q2 2023, partially offset by (iii) a decrease of $9 million as a result of the change in demand hour
brackets; |
• |
Revenue from private customers in respect of infrastructure
services—Increased by $36 million in 2023 as compared to 2022. Excluding the impact of translating OPC’s revenue from
NIS to USD, such revenues increased by $45 million, primarily as a result of (i) an increase of $26 million from an increase in the infrastructure
tariff, (ii) an increase of $12 million from an increase in customer consumption and (iii) an increase of $8 million from the consolidation
of results of the Kiryat Gat Power Plant beginning in Q2 2023; |
• |
Revenue from sale of energy to the System Operator and
to other suppliers—Increased by $16 million in 2023 as compared to 2022. Excluding the impact of translating OPC’s
revenue from NIS to USD, such revenues increased by $18 million, primarily as a result of (i) an increase of $18 million from the commencement
of commercial operations of Tzomet Power Plant in June 2023 and (ii) an increase of $4 million from the consolidation of results of the
Kiryat Gat Power Plant beginning in Q2 2023; |
• |
Revenue from capacity payments— Increased
by $16 million in 2023 as compared to 2022, primarily as a result of the commencement of commercial operations of Tzomet Power Plant in
June 2023; and |
• |
Other revenue— Increased by $5 million
in 2023 as compared to 2022, primarily as a result of the commencement of commercial operations of Tzomet Power Plant in June 2023.
|
For the year ended December 31, |
||||||||
2023 |
2022 |
|||||||
$ millions |
||||||||
Israel |
453 |
385 |
||||||
U.S. |
41 |
32 |
||||||
Total |
494 |
417 |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||
(in millions of USD)
|
||||||||
Revenue
|
5,162 |
12,562 |
||||||
Operating expenses
and cost of services |
(3,885 |
) |
4,765 |
|||||
Operating (loss)/profit
|
(2,511 |
) |
6,136 |
|||||
(Loss)/profit
before taxes on income |
(2,816 |
) |
6,027 |
|||||
Income tax expense
|
(128 |
) |
(1,398 |
) | ||||
(Loss)/profit
for the period |
(2,688 |
) |
4,629 |
|||||
Adjusted
EBITDA(1)
|
1,049 |
7,541 |
||||||
Share
of Kenon in total comprehensive income |
(266 |
) |
1,024 |
|||||
Book
value of ZIM investment in Kenon’s books |
— |
427 |
(1) |
Adjusted EBITDA is a non-IFRS financial measure that ZIM defines
as net profit adjusted to exclude financial expenses (income), net, income taxes, depreciation and amortization in order to reach EBITDA,
and further adjusted to exclude non-cash charter hire expenses, capital gains (losses) beyond the ordinary course of business and expenses
related to contingencies. Adjusted EBITDA is a key measure used by ZIM’s management and board of directors to evaluate ZIM’s
operating performance. Accordingly, ZIM believes that Adjusted EBITDA provides useful information to investors and others in understanding
and evaluating ZIM’s operating results and comparing its operating results between periods on a consistent basis, in the same manner
as ZIM’s management and board of directors. The table below sets forth a reconciliation of ZIM’s net (loss)/profit, to EBITDA
and Adjusted EBITDA for each of the periods indicated. |
Year Ended December 31, 2023 |
Year Ended December 31, 2022 |
|||||||
(in millions of USD)
|
||||||||
Net
(loss)/profit for the period |
(2,688 |
) |
4,629 |
|||||
Depreciation
and amortization |
1,472 |
1,396 |
||||||
Financing
expenses, net |
305 |
109 |
||||||
Income
tax (benefits)/expense |
(128 |
) |
1,398 |
|||||
EBITDA
|
(1,039 |
) |
7,532 |
|||||
Impairment
of assets |
2,063 |
- |
||||||
Capital
losses/(gains) beyond the ordinary course of business |
20 |
(1 |
) | |||||
Expenses
related to legal contingencies |
5 |
10 |
||||||
Adjusted
EBITDA |
1,049 |
7,541 |
Year Ended December 31,
|
||||||||
2023 |
2022 |
|||||||
(in millions
of USD) |
||||||||
Share in profits of associated
companies, net |
66 |
85 |
Presentation method in the CPV's consolidated financial
statements |
Revenues from electricity sales and availability
(in $ million)
|
Rate of the total revenues of the group and included
companies (proportionately according to the percentage of holding) * |
||||||
Included and consolidated companies |
458 |
40 |
% |
B. |
Liquidity and Capital Resources |
Year Ended December 31,
|
||||||||
2023 |
2022 |
|||||||
(in millions
of USD) |
||||||||
Continuing operations
|
||||||||
Net cash flows provided by
operating activities |
||||||||
OPC
|
135 |
63 |
||||||
Other
|
142 |
708 |
||||||
Total
|
277 |
771 |
||||||
Net cash flows
used in investing activities |
(432 |
) |
(203 |
) | ||||
Net cash flows
provided by/(used in) financing activities |
324 |
(494 |
) | |||||
Net change in
cash from continuing operations |
169 |
74 |
||||||
Cash—opening
balance |
535 |
475 |
||||||
Effect of exchange rate fluctuations
on balances of cash and cash equivalents |
(7 |
) |
(14 |
) | ||||
Cash—closing
balance |
697 |
535 |
Outstanding
Principal Amount as of December 31, 2023* ($ millions) |
Interest Rate
($ millions) |
Final Maturity |
Amortization Schedule
| ||||
OPC-Hadera:
|
|||||||
Financing agreement(1)
|
180 |
2.4%-3.9%, CPI linked (2/3 of the loan) 3.6%-5.4% (1/3 of the loan)
|
September 2037 |
Quarterly principal payments to maturity, commencing 6 months following
commercial operations of OPC-Hadera power plant | |||
Tzomet:
|
|||||||
Financing agreement(2)
|
315 |
CPI or USD-linked with interest equal to prime plus margin of 0.5-1.5%
- agreement includes provisions for conversion of interest from variable to CPI-linked debenture interest plus margin of 2-3% |
Earliest of 19 years from commercial operations date of Tzomet power
plant and 23 years from the signing date, but no later than December 31, 2042 |
Quarterly principal payments to maturity, commencing close to the
end of the first or second quarter following commercial operations of the Tzomet power plant | |||
Kiryat
Gat |
|||||||
Financing agreement(3)
|
121 |
Variable interest at a rate equal to the Prime interest rate of 0.65%;
NIS government bond plus 2.3% |
May 2039 |
Quarterly repayment of
principal and interest in accordance with amortization schedule
| |||
OPC4:
|
|||||||
Bonds (Series B)(4)(6)
|
271 |
2.75% (CPI-Linked) |
September 2028 |
Semi-annual principal payments commencing on September 30, 2020
| |||
Bonds (Series C)(5)(6)
|
214 |
2.5% |
August 2030 |
12 semi-annual payments (which repayment amounts vary, and range from
5% up to 16% of the total issued amount) commencing in February 2024 | |||
Total |
1,101 |
* |
Includes interest payable, net of expenses. |
(1) |
Represents NIS 652 million converted into USD at the exchange rate for NIS into
USD of NIS 3.627 to $1.00. All debt has been issued in NIS, of which 2/3 is linked to CPI and 1/3 is not linked to CPI. |
(2) |
Represents NIS 1,142 million converted into U.S. Dollars at the exchange rate for NIS
into U.S. Dollar of NIS 3.627 to $1.00. All debt has been issued in NIS, the loan principal of which is not linked to CPI. |
(3) |
Represents NIS 438 million converted into U.S. Dollars at the exchange rate for NIS into
U.S. Dollar of NIS 3.627 to $1.00. All debt has been issued in NIS, the loan principal of which is not linked to CPI. |
(4) |
In April 2020, OPC completed an offering of NIS 400 million (approximately $ 113 million)
of Series B bonds on the TASE, at an annual interest rate of 2.75%. In October 2020, OPC issued 555,555 units of NIS 1,000 Series B bonds,
totaling gross proceeds of NIS 584 million ($ 171 million). The offering was an extension of the existing Series B bonds previously issued
by OPC. The proceeds of the additional Series B issuance were used to redeem Series A bonds (NIS 313 million (approximately $ 86 million))
and in part to fund the CPV acquisition. |
(5) |
In September 2021, OPC issued Series C debentures at a par value of NIS 851 million (approximately
$ 266 million), bearing annual interest of 2.5%. The Series C bonds are repayable over 12 semi-annual payments (which repayment amounts
vary, and range from 5% up to 16% of the total issued amount) commencing in February 2024 with the final payment in August 2030. OPC used
the proceeds from the Series C bonds for the early repayment of project financing debt of OPC-Rotem as described below. |
(6) |
As of December 31, 2023, the balance of interest payable in respect of the Series B and
C debentures amounts to approximately NIS 14 million (approximately $ 4 million). |
• |
minimum projected DSCR, average projected DSCR (in relation to long-term
loans at the commercial operation date of the power plant) and LLCR (at the commercial operation date of the power plant): 1.10—on
the withdrawal dates the ratio must be at least 1.20; |
• |
maintenance of minimum amounts in the reserve accounts in accordance
with the agreement; and |
• |
other non-financial covenants and limitations such as restrictions on
dividend distributions, repayments of shareholder loans, asset sales, pledges investments and incurrence of debt as well as reporting
obligations. |
• |
minimum projected average debt service coverage ratio (ADSCR), average
projected ADSCR and LLCR: 1.05—on the withdrawal dates, Tzomet is required to comply with a minimum contractual ADSCR (i.e., the
lowest contractual ADSCR of all the contractual ADSCRs up to the date of final repayment) an average contractual ADSCR (i.e., the average
contractual ADSCR of all the contractual ADSCRs up to the date of final repayment), and a contractual LLCR on the commencement date of
the commercial operation of at least 1.3; |
• |
maintenance of minimum amounts in the reserve accounts in accordance
with the agreement; and |
• |
other non-financial covenants and limitations such as restrictions on
dividend distributions, repayments of shareholder loans, asset sales, pledge investments and incurrence of debt. |
Project |
Financial
Closing Date |
Total Commitment
(approximately in $millions) |
Total Outstanding/
Issued (approximately in $millions) as of Dec. 31, 2023 |
Maturity
Date |
Annual
interest |
Covenants
| ||||||
Fairview |
March 24, 2017 |
710 |
625(1)
|
June 30, 2025 |
Fixed debt interest rate – 5.4%
SOFR – 8.2%
Weighted-average interest as at December 31, 2023:
5.6% |
Distribution is subject to the project company’s
compliance with several terms and conditions, including compliance with a minimum debt service coverage ratio of 1.2 during the 4 quarters
that preceded the distribution, compliance with reserve requirements (pursuant to the terms of the financing agreement), compliance with
the debt balances target defined in the agreement, and that no ground for repayment or breach event exists (as defined in the financing
agreement). | ||||||
Towantic |
March 11, 2016 |
753 |
655(2)
|
June 30, 2025 |
Fixed debt interest rate – 5.1%
SOFR – 8.7%
Weighted-average interest as at December 31, 2023: 5.9%
|
Similar to Fairview (see above) |
Project |
Financial Closing Date
|
Total Commitment
(approximately in $millions) |
Total Outstanding/ Issued (approximately in $millions) as of Dec. 31, 2023 |
Maturity Date |
Annual interest |
Covenants | ||||||
Maryland |
August 8, 2014 |
450 |
350(3)
|
May 11, 2028 (Term Loan B)
November 11, 2027 (Ancillary Facilities)
|
Fixed debt interest rate – 5.9%
SOFR – 8.9%
Weighted-average interest as at December 31, 2023: 7.0%
|
Historical debt service coverage ratio of 1:1 during the last 4 quarters. Maryland
is currently in compliance with the covenant. A distribution is conditional on the project company complying with several terms and conditions,
including, compliance with a reserve requirements (as provided in the agreement), and that no ground for repayment or breach event exists
in accordance with the financing agreement. | ||||||
Shore
|
December 2018 |
535 |
425(4)
|
Dec. 27, 2025 (Term Loan) Dec. 27, 2023 (Ancillary
Facilities)(2) |
Fixed debt interest rate – 4.1%
SOFR – 9.1%
Weighted-average interest as at December 31, 2023: 5.4%
|
Historic rolling 4 quarter debt service
coverage ratio of 1:1. CPV is currently in compliance with this covenant. Distributions are subject to, among others, certain reserve
requirements, and having no existing default or event of default. | ||||||
Valley
|
June 12, 2015 as amended in June 2023 |
470 |
360(5)
|
Extended to May 31, 2026 |
SOFR – 10.8%
Weighted-average interest as at December 31, 2023: 10.8% |
Distributions are subject to the project company meeting conditions,
including compliance with a minimum debt service coverage ratio of 1.2 during the 4 quarters that preceded the distribution, compliance
with reserve requirements (pursuant to the terms of the financing agreement), compliance with requirements for receipt of a certain permit,
compliance with the debt balances target defined in the agreement, and that no ground for repayment or default event exists (as defined
in the financing agreement). | ||||||
Keenan II |
August 2021 |
120 |
104(6)
|
December 31, 2030 |
Fixed debt interest rate – 2.0%
SOFR – 6.5%
Weighted-average interest as at December 31, 2023: 3.0%
|
Distributions are subject to the project company’s compliance
with several terms and conditions, including compliance with a minimum debt service coverage ratio of 1.15 during the 4 quarters that
preceded the distribution, and that no grounds for repayment or breach event exist (as defined in the financing agreement) | ||||||
Three Rivers |
August 21, 2020 |
875 |
750(7)
|
June 30, 2028(2)
|
Fixed debt interest rate – 4.6%
SOFR – 9.1%
Weighted-average interest as at December 31, 2023: 5.3%
|
Similar to Fairview (see above) |
Project |
Financial Closing Date |
Total Commitment (approximately in $millions) | Total Outstanding/ Issued (approximately in $millions) as of Dec. 31, 2023 |
Maturity Date |
Annual interest |
Covenants | ||||||
Mountain Wind |
April 6, 2023 |
92 |
75(8)
|
April 6, 2028 |
Fixed debt interest rate – 4.9%
SOFR – 7.0%
Weighted-average interest as at December 31, 2023: 5.4%
|
Distributions aresubject to the project company’s compliance
with several terms and conditions, including compliance with a minimum debt service coverage ratio of 1.20 during the preceding 12-month
period that preceded the distribution, and that no grounds for repayment or breach event exist (as defined in the financing agreement).
| ||||||
CPV Maple Hill, Stagecoach, CPV Backbone |
August 23, 2023 |
370(9)
|
331 |
August 23, 2027 or
a year after the conversion date of the third
qualifying project |
Fixed debt interest rate – 6.4%
SOFR – 7.9%
Weighted-average interest as at December 31, 2023: 6.6%
|
Each project is required to meet a projected minimum
DSCR ratio(10) of 1.3, based on the stream of income from
PPAs and green certificates, and 1.8 based on the stream of income from market sales |
(1) |
Consisting of Term Loan (Variable): $510 million, Term Loan (Fixed): $115 million, Ancillary
Facilities (Working Capital Loan: $30; Letters of Credit/LC Loans: approximately $55 million). |
(2) |
Consisting of Term Loan: $655 million, Ancillary Facilities (Working Capital Loan: $21;
Letters of Credit/LC Loans: $77 million) |
(3) |
Consisting of Term Loan: $350 million, Ancillary Facilities (Working Capital Loan and
Letters of Credit: $100 million) |
(4) |
Consisting of Term Loan: $425 million, Ancillary Facilities ($110 million) (reduced to
$95 million as of November 2023). |
(5) |
Consisting of Term Loan: $360 million, Ancillary Facilities (Working Capital Loan: $10;
Letters of Credit/LC Loans: $100 million) |
(6) |
Consisting of Term Loan: $104 million, Ancillary Facilities (Working Capital Loan and
Letters of Credit: $16 million) |
(7) |
Consisting of Term Loan (Variable): $650 million, Term Loan (Fixed): $100 million, Ancillary
Facilities ($125 million). |
(8) |
Consisting of Term Loan (Variable): $19 million, Term Loan (Fixed): $56 million, Ancillary
Facilities ($17 million). |
(9) |
Consisting of Total Financing Commitment: $181 million, Ancillary Facilities (Letters
of Credit: $39 million, Bridge Loan $150 million). |
(10) |
The ratio between the free cash flow for debt service and the principal and interest
payments for the relevant period. |
C. |
Research and Development, Patents and Licenses, Etc.
|
D. |
Trend Information |
Zone |
Q4 2023 |
2023 |
Q4 2022 |
2022 |
||||||||||||
PJM West (Shore, Maryland) |
$ |
36.31 |
$ |
33.06 |
$ |
68.74 |
$ |
73.09 |
||||||||
PJM AD Hub (Fairview) |
$ |
31.30 |
$ |
30.81 |
$ |
64.70 |
$ |
69.42 |
||||||||
NYISO Zone G (Valley) |
$ |
31.52 |
$ |
33.27 |
$ |
73.04 |
$ |
82.21 |
||||||||
ISO-NE Mass Hub (Towantic) |
$ |
34.66 |
$ |
36.82 |
$ |
76.92 |
$ |
85.56 |
||||||||
PJM ComEd (Three Rivers) |
$ |
26.31 |
$ |
26.68 |
$ |
52.30 |
$ |
60.40 |
E. |
Critical Accounting Estimates |
• |
allocation of acquisition costs; |
• |
long-term investment (Qoros); |
• |
Recoverable amount of cash-generating unit that includes goodwill; and
|
• |
Recoverable amount of cash-generating unit of investment in equity-accounted
companies (ZIM). |
F. |
Disclosure of Registrant’s Action to Recover
Erroneously Awarded Compensation |
ITEM 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Name |
Age |
Function |
Original Appointment Date
|
Current Term Begins |
Current Term Expires
| |||||
Antoine Bonnier |
40 |
Board Member |
2016 |
2023 |
2024 | |||||
Laurence N. Charney
|
76 |
Chairman of the Audit Committee, Compensation Committee Member, Board
Member, ESG Committee Member |
2014 |
2023 |
2024 | |||||
Barak Cohen |
42 |
Board Member |
2018 |
2023 |
2024 | |||||
Cyril Pierre-Jean Ducau
|
45 |
Chairman of the Board, Nominating and Corporate Governance Committee
Chairman, ESG Committee Member |
2014 |
2023 |
2024 | |||||
N. Scott Fine |
67 |
Audit Committee Member, Compensation Committee Chairman, Board Member
|
2014 |
2023 |
2024 | |||||
Bill Foo |
66 |
Board Member, Nominating and Corporate Governance Committee Member
|
2017 |
2023 |
2024 | |||||
Aviad Kaufman |
53 |
Compensation Committee Member, Board Member, Nominating and Corporate
Governance Committee Member |
2015 |
2023 |
2024 | |||||
Robert L. Rosen1
|
51 |
Board Member and CEO |
2023 |
2023 |
2024 | |||||
Arunava Sen |
63 |
Board Member, Audit Committee Member, ESG Committee Chairman
|
2017 |
2023 |
2024 | |||||
Tan Beng Tee2
|
66 |
Board Member |
2023 |
2023 |
2024 |
Name |
Age |
Position |
||
Robert L. Rosen |
51 |
Chief Executive Officer & Director |
||
Deepa Joseph |
48 |
Chief Financial Officer |
B. |
Compensation |
C. |
Board Practices |
• |
the quality and integrity of our financial statements and internal controls;
|
• |
the compensation, qualifications, evaluation and independence of, and
making a recommendation to our board for recommendation to the annual general meeting for appointment of, our independent registered public
accounting firm; |
• |
the performance of our internal audit function; |
• |
our compliance with legal and regulatory requirements; and |
• |
review of related party transactions. |
• |
reviewing and determining the compensation package for our Chief Executive
Officer and other senior executives; |
• |
reviewing and making recommendations to our board with respect to the
compensation of our non-employee directors; |
• |
reviewing and approving corporate goals and objectives relevant to the
compensation of our Chief Executive Officer and other senior executives, including evaluating their performance in light of such goals
and objectives; and |
• |
reviewing periodically and approving and administering stock options
plans, long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, employee pension and welfare
benefit plans for all employees, including reviewing and approving the granting of options and other incentive awards. |
D. |
Employees |
Company |
December 31, 2023 |
|||
OPC(1)
|
319 |
|||
Kenon
|
6 |
|||
Total
|
325 |
(1) |
This table includes CPV’s employees. |
E. |
Share Ownership |
ITEM 7. |
Major Shareholders and Related Party Transactions
|
A. |
Major Shareholders |
Beneficial Owner |
Ordinary Shares
Owned |
Percentage of Ordinary Shares |
||||||
Ansonia Holdings Singapore
B.V.(1)
|
32,497,569 |
61.6 |
% | |||||
Gilad Altshuler(2)
|
3,475,486 |
6.6 |
% | |||||
Directors and Senior Management
(Executive Officers) |
— |
* |
(3)
|
(1) |
Based solely on the Schedule 13-D/A (Amendment No. 5) filed by Ansonia Holdings Singapore
B.V. with the SEC on July 7, 2021. A discretionary trust, in which Mr. Idan Ofer is the beneficiary, indirectly holds 100% of Ansonia
Holdings Singapore B.V. |
(2) |
Based solely on the Schedule 13-G/A filed by Gilad Altshuler with the SEC on February
12, 2024. According to the Schedule 13-G, the 3,475,486 ordinary shares consists of (i) 3,325,657 ordinary shares by provident and pension
funds managed by Altshuler Shaham Provident & Pension Funds Ltd., a majority-owned, indirect subsidiary of Altshuler-Shaham Ltd.,
(ii) 143,829 ordinary shares held by mutual funds managed by Altshuler Shaham Mutual Funds Management Ltd., also a majority-owned subsidiary
of Altshuler-Shaham Ltd, and (iii) 6,000 ordinary shares held by hedge funds managed by Altshuler Shaham Owl, Limited Partnership, an
affiliate of Altshuler-Shaham Ltd. |
(3) |
Owns less than 1% of Kenon’s ordinary shares. |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
ITEM 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information
|
B. |
Significant Changes |
ITEM 9. |
The Offer and Listing |
A. |
Offer and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
ITEM 10. |
Additional Information |
A. |
Share Capital |
B. |
Constitution |
• |
the conclusion of the next annual general meeting; |
• |
the expiration of the period within which the next annual general meeting
is required by law to be held (i.e., within six months after our financial year end, being December 31); or |
• |
the subsequent revocation or modification of approval by our shareholders
acting at a duly convened general meeting. |
• |
upon any resolution concerning the winding-up of our company under section
160 of the Insolvency, Restructuring and Dissolution Act 2018; and |
• |
upon any resolution which varies the rights attached to such preference
shares. |
• |
all the directors have made a solvency statement in relation to such
redemption; and |
• |
we have lodged a copy of the statement with the Singapore Registrar of
Companies. |
• |
14 days’ written notice to be given by Kenon of a general meeting
to pass an ordinary resolution; and |
• |
21 days’ written notice to be given by Kenon of a general meeting
to pass a special resolution, |
• |
a company and its related companies, the associated companies of any
of the company and its related companies, companies whose associated companies include any of these companies and any person who has provided
financial assistance (other than a bank in the ordinary course of business) to any of the foregoing for the purchase of voting rights;
|
• |
a company and its directors (including their close relatives, related
trusts and companies controlled by any of the directors, their close relatives and related trusts); |
• |
a company and its pension funds and employee share schemes; |
• |
a person and any investment company, unit trust or other fund whose investment
such person manages on a discretionary basis but only in respect of the investment account which such person manages; |
• |
a financial or other professional adviser, including a stockbroker, and
its clients in respect of shares held by the adviser and persons controlling, controlled by or under the same control as the adviser;
|
• |
directors of a company (including their close relatives, related trusts
and companies controlled by any of such directors, their close relatives and related trusts) which is subject to an offer or where the
directors have reason to believe a bona fide offer for the company may be imminent; |
• |
partners; and |
• |
an individual and such person’s close relatives, related trusts,
any person who is accustomed to act in accordance with such person’s instructions and companies controlled by the individual, such
person’s close relatives, related trusts or any person who is accustomed to act in accordance with such person’s instructions
and any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the foregoing for
the purchase of voting rights. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Board of Directors |
||
A typical certificate of incorporation and bylaws
would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the
authorized directors. Under Delaware law, a board of directors can be divided into classes and cumulative voting in the election of directors
is only permitted if expressly authorized in a corporation’s certificate of incorporation. |
The constitution of companies will typically
state the minimum and maximum number of directors as well as provide that the number of directors may be increased or reduced by shareholders
via ordinary resolution passed at a general meeting, provided that the number of directors following such increase or reduction is within
the maximum and minimum number of directors provided in the constitution and the Singapore Companies Act, respectively. Our Constitution
provides that, unless otherwise determined by a general meeting, the minimum number of directors is five and the maximum number is 12.
| |
Limitation on Personal Liability
of Directors | ||
A typical certificate of incorporation provides
for the elimination of personal monetary liability of directors for breach of fiduciary duties as directors to the fullest extent permissible
under the laws of Delaware, except for liability (i) for any breach of a director’s loyalty to the corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section
174 of the Delaware General Corporation Law (relating to the liability of directors for unlawful payment of a dividend or an unlawful
stock purchase or redemption) or (iv) for any transaction from which the director derived an improper personal benefit. A typical certificate
of incorporation would also provide that if the Delaware General Corporation Law is amended so as to allow further elimination of, or
limitations on, director liability, then the liability of directors will be eliminated or limited to the fullest extent permitted by the
Delaware General Corporation Law as so amended. |
Pursuant to the Singapore Companies Act, any
provision (whether in the constitution, contract or otherwise) purporting to exempt or indemnify a director (to any extent) from any liability
attaching in connection with any negligence, default, breach of duty or breach of trust in relation to Kenon will be void except as permitted
under the Singapore Companies Act. Nevertheless, a director can be released by the shareholders of Kenon for breaches of duty to Kenon,
except in the case of fraud, illegality, insolvency and oppression or disregard of minority interests.
Our Constitution currently provides that, subject
to the provisions of the Singapore Companies Act and every other act for the time being in force concerning companies and affecting Kenon,
every director, auditor, secretary or other officer of Kenon and its subsidiaries and affiliates shall be entitled to be indemnified by
Kenon against all liabilities incurred by him in the execution and discharge of his duties and where he serves at the request of Kenon
as a director, officer, employee or agent of any subsidiary or affiliate of Kenon or in relation thereto, including any liability incurred
by him in defending any proceedings, whether civil or criminal, which relate to anything done or omitted or alleged to have been done
or omitted by him as an officer or employee of Kenon, and in which judgment is given in his favor (or the proceedings otherwise disposed
of without any finding or admission of any material breach of duty on his part) or in which he is acquitted, or in connection with an
application under statute in respect of such act or omission in which relief is granted to him by the court. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Interested Shareholders
| ||
Section 203 of the Delaware General Corporation
Law generally prohibits a Delaware corporation from engaging in specified corporate transactions (such as mergers, stock and asset sales,
and loans) with an “interested stockholder” for three years following the time that the stockholder becomes an interested
stockholder. Subject to specified exceptions, an “interested stockholder” is a person or group that owns 15% or more of the
corporation’s outstanding voting stock (including any rights to acquire stock pursuant to an option, warrant, agreement, arrangement
or understanding, or upon the exercise of conversion or exchange rights, and stock with respect to which the person has voting rights
only), or is an affiliate or associate of the corporation and was the owner of 15% or more of the voting stock at any time within the
previous three years.
A Delaware corporation may elect to “opt
out” of, and not be governed by, Section 203 through a provision in either its original certificate of incorporation, or an amendment
to its original certificate or bylaws that was approved by majority stockholder vote. With a limited exception, this amendment would not
become effective until 12 months following its adoption. |
There are no comparable provisions in Singapore
with respect to public companies which are not listed on the Singapore Exchange Securities Trading Limited. | |
Removal of Directors
| ||
A typical certificate of incorporation and bylaws
provide that, subject to the rights of holders of any preferred stock, directors may be removed at any time by the affirmative vote of
the holders of at least a majority, or in some instances a supermajority, of the voting power of all of the then outstanding shares entitled
to vote generally in the election of directors, voting together as a single class. A certificate of incorporation could also provide that
such a right is only exercisable when a director is being removed for cause (removal of a director only for cause is the default rule
in the case of a classified board). |
According to the Singapore Companies Act, directors
of a public company may be removed before expiration of their term of office with or without cause by ordinary resolution (i.e., a resolution
which is passed by a simple majority of those shareholders present and voting in person or by proxy). Notice of the intention to move
such a resolution has to be given to Kenon not less than 28 days before the meeting at which it is moved. Kenon shall then give notice
of such resolution to its shareholders not less than 14 days before the meeting. Where any director removed in this manner was appointed
to represent the interests of any particular class of shareholders or debenture holders, the resolution to remove such director will not
take effect until such director’s successor has been appointed.
Our Constitution provides that Kenon may by ordinary
resolution of which special notice has been given, remove any director before the expiration of his period of office, notwithstanding
anything in Constitution or in any agreement between Kenon and such director and appoint another person in place of the director so removed.
|
Delaware |
Singapore—Kenon Holdings
Ltd. |
Filling Vacancies on the Board
of Directors | ||
A typical certificate of incorporation and bylaws
provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement,
disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining
directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected
director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the
class of directors to which the newly elected director has been elected expires. |
The constitution of a Singapore company typically
provides that the directors have the power to appoint any person to be a director, either to fill a vacancy or as an addition to the existing
directors, but so that the total number of directors will not at any time exceed the maximum number fixed in the constitution. Any newly
elected director shall hold office until the next following annual general meeting, where such director will then be eligible for re-election.
Our Constitution provides that the shareholders may by ordinary resolution, or the directors may, appoint any person to be a director
as an additional director or to fill a vacancy provided that any person so appointed by the directors will only hold office until the
next annual general meeting, and will then be eligible for re-election. | |
Amendment of Governing Documents
| ||
Under the Delaware General Corporation Law, amendments
to a corporation’s certificate of incorporation require the approval of stockholders holding a majority of the outstanding shares
entitled to vote on the amendment. If a class vote on the amendment is required by the Delaware General Corporation Law, a majority of
the outstanding stock of the class is required, unless a greater proportion is specified in the certificate of incorporation or by other
provisions of the Delaware General Corporation Law. Under the Delaware General Corporation Law, the board of directors may amend bylaws
if so authorized in the charter. The stockholders of a Delaware corporation also have the power to amend bylaws. |
Our Constitution may be altered by special resolution
(i.e., a resolution passed by at least a three-fourths majority of the shares entitled to vote, present in person or by proxy at a meeting
for which not less than 21 days’ written notice is given). The board of directors has no right to amend the constitution.
|
Delaware |
Singapore—Kenon Holdings
Ltd. |
Meetings of Shareholders
| ||
Annual and Special Meetings
Typical bylaws provide that annual meetings of
stockholders are to be held on a date and at a time fixed by the board of directors. Under the Delaware General Corporation Law, a special
meeting of stockholders may be called by the board of directors or by any other person authorized to do so in the certificate of incorporation
or the bylaws.
Quorum Requirements
Under the Delaware General Corporation Law, a
corporation’s certificate of incorporation or bylaws can specify the number of shares which constitute the quorum required to conduct
business at a meeting, provided that in no event shall a quorum consist of less than one-third of the shares entitled to vote at a meeting.
|
Annual General Meetings
All companies are required to hold an annual
general meeting once every calendar year. The first annual general meeting was required to be held within 18 months of Kenon’s incorporation
and subsequently, annual general meetings must be held within six months after Kenon’s financial year end.
Extraordinary General Meetings
Any general meeting other than the annual general meeting is
called an “extraordinary general meeting”. Two or more members (shareholders) holding not less than 10% of the total number
of issued shares (excluding treasury shares) may call an extraordinary general meeting. In addition, the constitution usually also provides
that general meetings may be convened in accordance with the Singapore Companies Act by the directors. Notwithstanding anything in the constitution,
the directors are required to convene a general meeting if required to do so by requisition (i.e., written notice to directors requiring
that a meeting be called) by shareholder(s) holding not less than 10% of the total number of paid-up shares of Kenon carrying voting rights.
Our Constitution provides that the directors
may, whenever they think fit, convene an extraordinary general meeting.
Quorum Requirements
Our Constitution provides that shareholders entitled
to vote holding 33 and 1/3% of our issued and paid-up shares, present in person or by proxy at a meeting, shall be a quorum. In the event
a quorum is not present, the meeting (i) (if not requisitioned by shareholders) may be adjourned for one week; and (ii) (if requisitioned
by shareholders) shall be dissolved. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Indemnification of Officers,
Directors and Employers | ||
Under the Delaware General Corporation Law, subject
to specified limitations in the case of derivative suits brought by a corporation’s stockholders in its name, a corporation may
indemnify any person who is made a party to any third-party action, suit or proceeding on account of being a director, officer, employee
or agent of the corporation (or was serving at the request of the corporation in such capacity for another corporation, partnership, joint
venture, trust or other enterprise) against expenses, including attorney’s fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or her in connection with the action, suit or proceeding through, among other things, a majority
vote of a quorum consisting of directors who were not parties to the suit or proceeding, if the person:
•
acted in good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation or, in some circumstances, at least not opposed to its best interests; and
•
in a criminal proceeding, had no reasonable cause to believe his or her conduct was
unlawful.
Delaware corporate law permits indemnification
by a corporation under similar circumstances for expenses (including attorneys’ fees) actually and reasonably incurred by such persons
in connection with the defense or settlement of a derivative action or suit, except that no indemnification may be made in respect of
any claim, issue or matter as to which the person is adjudged to be liable to the corporation unless the Delaware Court of Chancery or
the court in which the action or suit was brought determines upon application that the person is fairly and reasonably entitled to indemnity
for the expenses which the court deems to be proper.
To the extent a director, officer, employee or
agent is successful in the defense of such an action, suit or proceeding, the corporation is required by Delaware corporate law to indemnify
such person for expenses (including attorneys’ fees) actually and reasonably incurred thereby. Expenses (including attorneys’
fees) incurred by such persons in defending any action, suit or proceeding may be paid in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of that person to repay the amount if it is ultimately determined that
that person is not entitled to be so indemnified. |
The Singapore Companies Act specifically provides
that Kenon is allowed to:
•
purchase and maintain for any officer insurance against any liability attaching
to such officer in respect of any negligence, default, breach of duty or breach of trust in relation to Kenon;
•
indemnify such officer against liability incurred by a director to a person other than
Kenon except when the indemnity is against (i) any liability of the director to pay a fine in criminal proceedings or a sum payable to
a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising);
or (ii) any liability incurred by the officer (1) in defending criminal proceedings in which he is convicted, (2) in defending civil proceedings
brought by Kenon or a related company of Kenon in which judgment is given against him or (3) in connection with an application for relief
under specified sections of the Singapore Companies Act in which the court refuses to grant him relief;
•
indemnify any auditor against any liability incurred or to be incurred by such
auditor in defending any proceedings (whether civil or criminal) in which judgment is given in such auditor’s favor or in which
such auditor is acquitted; or
•
indemnify any auditor against any liability incurred by such auditor in
connection with any application under specified sections of the Singapore Companies Act in which relief is granted to such auditor by
a court.
In cases where, inter alia, an officer is sued
by Kenon, the Singapore Companies Act gives the court the power to relieve directors either wholly or partially from the consequences
of their negligence, default, breach of duty or breach of trust. However, Singapore case law has indicated that such relief will not be
granted to a director who has benefited as a result of his or her breach of trust. In order for relief to be obtained, it must be shown
that (i) the director acted reasonably; (ii) the director acted honestly; and (iii) it is fair, having regard to all the circumstances
of the case including those connected with such director’s appointment, to excuse the director.
Our Constitution currently provides that, subject
to the provisions of the Singapore Companies Act and every other act for the time being in force concerning companies and affecting Kenon,
every director, auditor, secretary or other officer of Kenon and its subsidiaries and affiliates shall be entitled to be indemnified by
Kenon against all liabilities incurred by him in the execution and discharge of his duties and where he serves at the request of Kenon
as a director, officer, employee or agent of any subsidiary or affiliate of Kenon or in relation thereto, including any liability incurred
by him in defending any proceedings, whether civil or criminal, which relate to anything done or omitted or alleged to have been done
or omitted by him as an officer or employee of Kenon, and in which judgment is given in his favor (or the proceedings otherwise disposed
of without any finding or admission of any material breach of duty on his part) or in which he is acquitted, or in connection with an
application under statute in respect of such act or omission in which relief is granted to him by the court. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Shareholder Approval of Business
Combinations | ||
Generally, under the Delaware General Corporation
Law, completion of a merger, consolidation, or the sale, lease or exchange of substantially all of a corporation’s assets or dissolution
requires approval by the board of directors and by a majority (unless the certificate of incorporation requires a higher percentage) of
outstanding stock of the corporation entitled to vote.
The Delaware General Corporation Law also requires
a special vote of stockholders in connection with a business combination with an “interested stockholder” as defined in section
203 of the Delaware General Corporation Law. For further information on such provisions, see “—Interested
Shareholders” above. |
The Singapore Companies Act mandates that specified
corporate actions require approval by the shareholders in a general meeting, notably:
•
notwithstanding anything in our Constitution, directors are not permitted to carry into
effect any proposals for disposing of the whole or substantially the whole of Kenon’s undertaking or property unless those proposals
have been approved by shareholders in a general meeting;
•
subject to the constitution of each amalgamating company, an amalgamation
proposal must be approved by the shareholders of each amalgamating company via special resolution at a general meeting; and
•
notwithstanding anything in our Constitution, the directors may not, without
the prior approval of shareholders, issue shares, including shares being issued in connection with corporate actions. |
Shareholder Action Without
a Meeting | ||
Under the Delaware General Corporation Law, unless
otherwise provided in a corporation’s certificate of incorporation, any action that may be taken at a meeting of stockholders may
be taken without a meeting, without prior notice and without a vote if the holders of outstanding stock, having not less than the minimum
number of votes that would be necessary to authorize such action, consent in writing. It is not uncommon for a corporation’s certificate
of incorporation to prohibit such action. |
There are no equivalent provisions under the
Singapore Companies Act in respect of passing shareholders’ resolutions by written means that apply to public companies listed on
a securities exchange. | |
Shareholder Suits |
||
Under the Delaware General Corporation Law, a
stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. An individual also may
commence a class action suit on behalf of himself or herself and other similarly situated stockholders where the requirements for maintaining
a class action under the Delaware General Corporation Law have been met. A person may institute and maintain such a suit only if such
person was a stockholder at the time of the transaction which is the subject of the suit or his or her shares thereafter devolved upon
him or her by operation of law. Additionally, under Delaware case law, the plaintiff generally must be a stockholder not only at the time
of the transaction which is the subject of the suit, but also through the duration of the derivative suit. Delaware Law also requires
that the derivative plaintiff make a demand on the directors of the corporation to assert the corporate claim before the suit may be prosecuted
by the derivative plaintiff, unless such demand would be futile. |
Derivative actions
The Singapore Companies Act has a provision which
provides a mechanism enabling any registered shareholder to apply to the court for permission to bring a derivative action on behalf of
the company.
In addition to registered shareholders, courts
are given the discretion to allow such persons as they deem proper to apply as well (e.g., beneficial owners of shares or individual directors).
This provision of the Singapore Companies Act
is primarily used by minority shareholders to bring an action in the name and on behalf of the company or intervene in an action to which
the company is a party for the purpose of prosecuting, defending or discontinuing the action on behalf of the company.
Class actions
The concept of class action suits, which allows
individual shareholders to bring an action seeking to represent the class or classes of shareholders, generally does not exist in Singapore.
However, it is possible as a matter of procedure for a number of shareholders to lead an action and establish liability on behalf of themselves
and other shareholders who join in or who are made parties to the action.
Further, there are certain circumstances in which
shareholders may file and prove their claims for compensation in the event that Kenon has been convicted of a criminal offense or has
a court order for the payment of a civil penalty made against it.
Additionally, for as long as Kenon is listed
in the U.S. or in Israel, Kenon has undertaken not to claim that it is not subject to any derivative/class action that may be filed against
it in the U.S. or Israel, as applicable, solely on the basis that it is a Singapore company. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Dividends or Other Distributions;
Repurchases and Redemptions | ||
The Delaware General Corporation Law permits
a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for the fiscal year
in which the dividend is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the
declaration and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding
stock of all classes having a preference upon the distribution of assets.
Under the Delaware General Corporation Law, any
corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem these shares if the capital of
the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or
redeem out of capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its
shares if the shares are to be retired and the capital reduced. |
The Singapore Companies Act provides that no
dividends can be paid to shareholders except out of profits.
The Singapore Companies Act does not provide
a definition on when profits are deemed to be available for the purpose of paying dividends and this is accordingly governed by case law.
Our Constitution provides that no dividend can be paid otherwise than out of profits of Kenon.
Acquisition of a company’s
own shares
The Singapore Companies Act generally prohibits
a company from acquiring its own shares subject to certain exceptions. Any contract or transaction by which a company acquires or transfers
its own shares is void. However, provided that it is expressly permitted to do so by its constitution and subject to the special conditions
of each permitted acquisition contained in the Singapore Companies Act, Kenon may:
•
redeem redeemable preference shares (the redemption of these shares will not
reduce the capital of Kenon). Preference shares may be redeemed out of capital if all the directors make a solvency statement in relation
to such redemption in accordance with the Singapore Companies Act;
•
whether listed (on an approved exchange in Singapore or any securities exchange outside
Singapore) or not, make an off-market purchase of its own shares in accordance with an equal access scheme authorized in advance at a
general meeting;
•
whether listed on a securities exchange (in Singapore or outside Singapore) or
not, make a selective off-market purchase of its own shares in accordance with an agreement authorized in advance at a general meeting
by a special resolution where persons whose shares are to be acquired and their associated persons have abstained from voting; and
•
whether listed (on an approved exchange in Singapore or any securities exchange outside
Singapore) or not, make a purchase of its own shares under a contingent purchase contract which has been authorized in advance at a general
meeting by a special resolution.
Kenon may also purchase its own shares by an
order of a Singapore court.
The total number of ordinary shares that may
be acquired by Kenon in a relevant period may not exceed 20% of the total number of ordinary shares in that class as of the date of the
resolution pursuant to the relevant share repurchase provisions under the Singapore Companies Act. Where, however, Kenon has reduced its
share capital by a special resolution or a Singapore court made an order to such effect, the total number of ordinary shares shall be
taken to be the total number of ordinary shares in that class as altered by the special resolution or the order of the court. Payment
must be made out of Kenon’s distributable profits or capital, provided that Kenon is solvent. Such payment may include any expenses
(including brokerage or commission) incurred directly in the purchase or acquisition by Kenon of its ordinary shares.
Financial assistance for
the acquisition of shares
Kenon may not give financial assistance to any
person whether directly or indirectly for the purpose of:
•
the acquisition or proposed acquisition of shares in Kenon or units of such shares;
or
•
the acquisition or proposed acquisition of shares in its holding company or ultimate
holding company, as the case may be, or units of such shares.
Financial assistance may take the form of a loan,
the giving of a guarantee, the provision of security, the release of an obligation, the release of a debt or otherwise.
However, Kenon may provide financial assistance
for the acquisition of its shares or shares in its holding company if it complies with the requirements (including, where applicable,
approval by the board of directors or by the passing of a special resolution by its shareholders) set out in the Singapore Companies Act.
Our Constitution provides that subject to the provisions of the Singapore Companies Act, we may purchase or otherwise acquire our own
shares upon such terms and subject to such conditions as we may deem fit. These shares may be held as treasury shares or cancelled as
provided in the Singapore Companies Act or dealt with in such manner as may be permitted under the Singapore Companies Act. On cancellation
of the shares, the rights and privileges attached to those shares will expire. |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Transactions with Officers
and Directors | ||
Under the Delaware General Corporation Law, some
contracts or transactions in which one or more of a corporation’s directors has an interest are not void or voidable because of
such interest provided that some conditions, such as obtaining the required approval and fulfilling the requirements of good faith and
full disclosure, are met. Under the Delaware General Corporation Law, either (i) the stockholders or the board of directors must approve
in good faith any such contract or transaction after full disclosure of the material facts or (ii) the contract or transaction must have
been “fair” as to the corporation at the time it was approved. If board approval is sought, the contract or transaction must
be approved in good faith by a majority of disinterested directors after full disclosure of material facts, even though less than a majority
of a quorum. |
Under the Singapore Companies Act, the chief
executive officer and directors are not prohibited from dealing with Kenon, but where they have an interest in a transaction with Kenon,
that interest must be disclosed to the board of directors. In particular, the chief executive officer and every director who is in any
way, whether directly or indirectly, interested in a transaction or proposed transaction with Kenon must, as soon as practicable after
the relevant facts have come to such officer or director’s knowledge, declare the nature of such officer or director’s interest
at a board of directors’ meeting or send a written notice to Kenon containing details on the nature, character and extent of his
interest in the transaction or proposed transaction with Kenon.
In addition, a director or chief executive officer
who holds any office or possesses any property which, directly or indirectly, duties or interests might be created in conflict with such
officer’s duties or interests as director or chief executive officer, is required to declare the fact and the nature, character
and extent of the conflict at a meeting of directors or send a written notice to Kenon containing details on the nature, character and
extent of the conflict.
The Singapore Companies Act extends the scope
of this statutory duty of a director or chief executive officer to disclose any interests by pronouncing that an interest of a member
of the director’s or, as the case may be, the chief executive officer’s family (including spouse, son, adopted son, step-son,
daughter, adopted daughter and step-daughter) will be treated as an interest of the director.
There is however no requirement for disclosure
where the interest of the director or chief executive officer (as the case may be) consists only of being a member or creditor of a corporation
which is interested in the transaction or proposed transaction with Kenon if the interest may properly be regarded as immaterial. Where
the transaction or proposed transaction relates to any loan to Kenon, no disclosure need be made where the director or chief executive
officer has only guaranteed or joined in guaranteeing the repayment of such loan, unless the constitution provides otherwise.
Further, where the proposed transaction is to
be made with or for the benefit of a related corporation (i.e., the holding company, subsidiary or subsidiary of a common holding company)
no disclosure need be made of the fact that the director or chief executive officer is also a director or chief executive officer of that
corporation, unless the constitution provides otherwise.
Subject to specified exceptions, including a
loan to a director for expenditure in defending criminal or civil proceedings, etc. or in connection with an investigation, or an action
proposed to be taken by a regulatory authority in connection with any alleged negligence, default, breach of duty or breach of trust by
him in relation to Kenon, the Singapore Companies Act prohibits Kenon from: (i) making a loan or quasi-loan to its directors or to directors
of a related corporation (each, a “relevant director”); (ii) giving a guarantee or security in connection with a loan or quasi-loan
made to a relevant director by any other person; (iii) entering into a credit transaction as creditor for the benefit of a relevant director;
(iv) giving a guarantee or security in connection with such credit transaction entered into by any person for the benefit of a relevant
director; (v) taking part in an arrangement where another person enters into any of the transactions in (i) to (iv) above or (vi) below
and such person obtains a benefit from Kenon or a related corporation; or (vi) arranging for the assignment to Kenon or assumption by
Kenon of any rights, obligations or liabilities under a transaction in (i) to (v) above. Kenon is also prohibited from entering into the
transactions in (i) to (vi) above with or for the benefit of a relevant director’s spouse or children (whether adopted or naturally
or step-children). |
Delaware |
Singapore—Kenon Holdings
Ltd. |
Dissenters’ Rights
| ||
Under the Delaware General Corporation Law, a
stockholder of a corporation participating in some types of major corporate transactions may, under varying circumstances, be entitled
to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his or her shares in
lieu of the consideration he or she would otherwise receive in the transaction. |
There are no equivalent provisions under the
Singapore Companies Act. | |
Cumulative Voting |
||
Under the Delaware General Corporation Law, a
corporation may adopt in its bylaws that its directors shall be elected by cumulative voting. When directors are elected by cumulative
voting, a stockholder has the number of votes equal to the number of shares held by such stockholder times the number of directors nominated
for election. The stockholder may cast all of such votes for one director or among the directors in any proportion. |
There is no equivalent provision under the Singapore
Companies Act in respect of companies incorporated in Singapore. |
Anti-Takeover Measures
| ||
Under the Delaware General Corporation Law, the
certificate of incorporation of a corporation may give the board the right to issue new classes of preferred stock with voting, conversion,
dividend distribution, and other rights to be determined by the board at the time of issuance, which could prevent a takeover attempt
and thereby preclude shareholders from realizing a potential premium over the market value of their shares.
In addition, Delaware law does not prohibit a
corporation from adopting a stockholder rights plan, or “poison pill,” which could prevent a takeover attempt and also preclude
shareholders from realizing a potential premium over the market value of their shares. |
The constitution of a Singapore company typically
provides that the company may allot and issue new shares of a different class with preferential, deferred, qualified or other special
rights as its board of directors may determine with the prior approval of the company’s shareholders in a general meeting. Our Constitution
provides that our shareholders may grant to our board the general authority to issue such preference shares until the next general meeting.
For further information, see “Item 3.D Risk Factors—Risks Relating to Our Ordinary Shares—Our
directors have general authority to allot and issue new shares on terms and conditions and with any preferences, rights or restrictions
as may be determined by our board of directors in its sole discretion, which may dilute our existing shareholders. We may also issue securities
that have rights and privileges that are more favorable than the rights and privileges accorded to our existing shareholders”
and “—Preference Shares.”
Singapore law does not generally prohibit a corporation
from adopting “poison pill” arrangements which could prevent a takeover attempt and also preclude shareholders from realizing
a potential premium over the market value of their shares.
However, under the Singapore Code on Take-overs
and Mergers, if, in the course of an offer, or even before the date of the offer announcement, the board of the offeree company has reason
to believe that a bona fide offer is imminent, the board must not, except pursuant to a contract entered into earlier, take any action,
without the approval of shareholders at a general meeting, on the affairs of the offeree company that could effectively result in any
bona fide offer being frustrated or the shareholders being denied an opportunity to decide on its merits.
For further information on the Singapore Code
on Take-overs and Mergers, see “—Takeovers.” |
C. |
Material Contracts |
D. |
Exchange Controls |
E. |
Taxation |
• |
persons that are not U.S. Holders; |
• |
persons that are subject to alternative minimum taxes; |
• |
insurance companies; |
• |
cooperatives; |
• |
pension plans; |
• |
regulated investment companies; |
• |
real estate investment trusts; |
• |
tax-exempt entities; |
• |
banks and other financial institutions; |
• |
broker-dealers; |
• |
pass-through entities; |
• |
persons that hold our ordinary shares through partnerships (or other
entities or arrangements classified as partnerships for U.S. federal income tax purposes); |
• |
persons that acquire our ordinary shares through any employee share option
or otherwise as compensation; |
• |
persons that actually or constructively own 10% or more of the total
combined voting power of all classes of our voting stock or 10% or more of the total value of shares of all classes of our stock;
|
• |
traders in securities that elect to apply a mark-to-market method of
accounting; |
• |
investors that will hold our ordinary shares as part of a “hedge,”
“straddle,” “conversion,” “constructive sale” or other integrated transaction for U.S. federal income
tax purposes; |
• |
investors that have a functional currency other than the U.S. Dollar;
and |
• |
individuals who receive our ordinary shares upon the exercise of compensatory
options or otherwise as compensation. |
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation (or other entity treated as a corporation for U.S. federal
income tax purposes) created in, or organized under the laws of the United States or any state thereof or the District of Columbia;
|
• |
an estate, the income of which is subject to U.S. federal income taxation
regardless of its source; or |
• |
a trust that (i) is subject to the primary supervision of a U.S. court
and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust and (ii) has otherwise
validly elected to be treated as a U.S. person under the Code. |
• |
the excess distribution or gain will be allocated ratably over the U.S.
Holder’s holding period for the ordinary shares; |
• |
the amount allocated to the taxable year of the excess distribution,
or sale or other disposition, and to any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which
we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; |
• |
the amount allocated to each prior taxable year, other than a pre-PFIC
year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and
|
• |
the interest charge generally applicable to underpayments of tax will
be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
J. |
Annual Report to Security Holder |
ITEM 11. |
Quantitative and Qualitative Disclosures about Market
Risk |
• |
currency risk, as a result of changes in the rates of exchange of various
foreign currencies (in particular, the Euro and the New Israeli Shekel) in relation to the U.S. Dollar, our functional currency and the
currency against which we measure our exposure; |
• |
index risk, as a result of changes in the Consumer Price Index;
|
• |
interest rate risk, as a result of changes in the market interest rates
affecting certain of our businesses’ issuance of debt and related financial instruments; and |
• |
price risk, as a result of changes in market prices, such as the price
of certain commodities (e.g., natural gas and heavy fuel oil). |
ITEM 12. |
Description of Securities Other than Equity Securities
|
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
ITEM 13. |
Defaults, Dividend Arrearages and Delinquencies
|
ITEM 14. |
Material Modifications to the Rights of Security Holders
and Use of Proceeds |
ITEM 15. |
Controls and Procedures |
ITEM 16. |
RESERVED |
ITEM 16A. |
Audit Committee Financial Expert |
ITEM 16B. |
Code of Ethics |
ITEM 16C. |
Principal Accountant Fees and Services |
Year ended
December 31, |
||||||||
2023 |
2022 |
|||||||
(in thousands of USD)
|
||||||||
Audit Fees(1)
|
5,030 |
3,960 |
||||||
Audit-Related Fees
|
2 |
2 |
||||||
Tax Fees(2)
|
180 |
314 |
||||||
Total
|
5,212 |
4,276 |
(1) |
Includes fees billed or accrued for professional services rendered by the principal accountant,
and member firms in their respective network, for the audit of our annual financial statements, and those of our consolidated subsidiaries,
as well as additional services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements,
except for those not required by statute or regulation. |
(2) |
Tax fees consist of fees for professional services rendered during the fiscal year by
the principal accountant mainly for tax compliance and assistance with tax audits and appeals. |
ITEM 16D. |
Exemptions from the Listing Standards for Audit Committees
|
ITEM 16E. |
Purchases of Equity Securities by the Issuer and Affiliated
Purchasers |
Period |
(a)
Total number of shares purchased
|
(b)
Average price paid per share
|
(c)
Total number of shares purchased
as part of publicly announced plans or programs |
(d)
Maximum number (or approximate
dollar value) of shares that may yet be purchased under the plans or programs |
||||||||||||
January 1 - 31, 2023
|
||||||||||||||||
February 1 - 28, 2023
|
||||||||||||||||
March 1 - 31, 2023
|
$ |
50,000,000 |
||||||||||||||
April 1 - 30, 2023
|
96,187 |
$ |
27.29 |
96,187 |
$ |
47,374,943 |
||||||||||
May 1 - 31, 2023
|
143,876 |
$ |
28.41 |
240,063 |
$ |
43,287,235 |
||||||||||
June 1 - 30, 2023
|
305,521 |
$ |
25.31 |
545,584 |
$ |
35,553,697 |
||||||||||
July 1 - 31, 2023
|
275,800 |
$ |
24.68 |
821,384 |
$ |
28,747,399 |
||||||||||
August 1 - 31, 2023
|
120,404 |
$ |
25.51 |
941,788 |
$ |
25,676,202 |
||||||||||
September 1 - 30, 2023
|
22,725 |
$ |
23.45 |
964,513 |
$ |
25,143,213 |
||||||||||
October 1 - 31, 2023
|
92,468 |
$ |
20.22 |
1,056,981 |
$ |
23,273,305 |
||||||||||
November 1 - 30, 2023
|
71,587 |
$ |
19.62 |
1,128,568 |
$ |
21,868,789 |
||||||||||
December 1 - 31, 2023
|
1,128,568 |
$ |
21,868,789 |
ITEM 16F. |
Change in Registrant’s Certifying Accountant
|
ITEM 16G. |
Corporate Governance |
ITEM 16H. |
Mine Safety Disclosure |
ITEM 16I. |
Disclosure Regarding Foreign Jurisdictions that Prevent
Inspection |
ITEM 16J. |
Insider Trading Policies |
ITEM 16K. |
Cybersecurity |
ITEM 17. |
Financial Statements |
ITEM 18. |
Financial Statements |
ITEM 19. |
Exhibits |
Exhibit Number |
Description of Document
| |
1.1* | ||
2.1 | ||
2.2 | ||
2.3 | ||
4.1 | ||
4.2 |
||
4.4 | ||
101.INS* |
Inline XBRL Instance Document | |
101.SCH* |
Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* |
Inline XBRL Taxonomy Extension Calculation Linkbase Document
| |
101.DEF* |
Inline XBRL Taxonomy Extension Definition Linkbase Document
| |
101.LAB* |
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
101.PRE* |
Inline XBRL Taxonomy Extension Presentation Linkbase Document
| |
104* |
Inline XBRL for the cover page of this Annual Report on Form 20-F,
included in the Exhibit 101 Inline XBRL Document Set. |
* |
Filed herewith. |
(1) |
Portions of this exhibit have been omitted pursuant to a request for confidential treatment
under Rule 24b-2 of the Exchange Act. Omitted information has been filed separately with the SEC. |
|
Page
|
F-1 – F-4
|
|
F-5 – F-6
|
|
F-7
|
|
F-8
|
|
F-9 – F-11
|
|
F-12 – F-13
|
|
F-14 – F-80
|
KPMG LLP
12 Marina View #15-01
Asia Square Tower 2
Singapore 018961
|
Telephone +65 6213 3388
Fax +65 6225 0984
Internet kpmg.com.sg
|
|
|
KPMG LLP (Registration No. T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
|
|
Kenon Holdings Ltd.
|
Independent auditors’ report
|
Year ended December 31, 2023
|
Impairment assessments of goodwill arising from CPV Group
As discussed in Notes 3.G and 13.C to the consolidated financial statements, the carrying amount of the cash generating unit (CGU) to which goodwill is allocated is reviewed at each reporting date for impairment. As of December 31, 2023, the Group’s goodwill assigned to the renewable energies segment arising from CPV Group amounted to $126 million (Renewable Energy CGU). The Company estimates the recoverable amount of the Renewable Energy CGU based on discounted expected future cash flows. An impairment loss is recognized if the carrying value of the Renewable Energy CGU exceeds its estimated recoverable amount.
KPMG LLP
12 Marina View #15-01
Asia Square Tower 2
Singapore 018961
|
Telephone +65 6213 3388
Fax +65 6225 0984
Internet kpmg.com.sg
|
KPMG LLP (Registration No. T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.
|
|
Kenon Holdings Ltd.
|
Independent auditors’ report
|
Year ended December 31, 2023
|
As at December 31,
|
|||||||||||
2023
|
2022
|
||||||||||
Note
|
$ Thousands
|
||||||||||
Current assets
|
|||||||||||
Cash and cash equivalents
|
5
|
|
|
||||||||
Short-term deposits and restricted cash
|
6
|
|
|
||||||||
Trade receivables
|
|
|
|||||||||
Short-term derivative instruments
|
|
|
|||||||||
Other investments
|
7
|
|
|
||||||||
Other current assets
|
8
|
|
|
||||||||
Total current assets
|
|
|
|||||||||
Non-current assets
|
|||||||||||
Investment in ZIM (associated company)
|
9
|
|
|
||||||||
Investment in OPC’s associated companies |
9
|
|
|
||||||||
Long-term restricted cash
|
|
|
|||||||||
Long-term derivative instruments
|
28.D.1 |
|
|
||||||||
Deferred taxes
|
24.C.2
|
|
|
||||||||
Property, plant and equipment, net
|
12
|
|
|
||||||||
Intangible assets, net
|
13
|
|
|
||||||||
Long-term prepaid expenses and other non-current assets
|
14
|
|
|
* | |||||||
Right-of-use assets, net
|
17
|
|
|
* | |||||||
Total non-current assets
|
|
|
|||||||||
Total assets
|
|
|
* Reclassified
As at December 31,
|
|||||||||||
2023
|
2022
|
||||||||||
Note
|
$ Thousands
|
||||||||||
Current liabilities
|
|||||||||||
Current maturities of loans from banks and others
|
15
|
|
|
||||||||
Trade and other payables
|
16
|
|
|
||||||||
Short-term derivative instruments
|
28.D.1 |
|
|
||||||||
Current tax liabilities
|
|
|
|||||||||
Deferred taxes
|
24.C.2
|
|
|
||||||||
Current maturities of lease liabilities
|
|
|
|||||||||
Total current liabilities
|
|
|
|||||||||
Non-current liabilities
|
|||||||||||
Long-term loans from banks and others
|
15
|
|
|
||||||||
Debentures
|
15
|
|
|
||||||||
Deferred taxes
|
24.C.2
|
|
|
||||||||
Other non-current liabilities
|
16
|
|
|
||||||||
Long-term derivative instruments
|
|
|
|||||||||
Long-term lease liabilities
|
|
|
|||||||||
Total non-current liabilities
|
|
|
|||||||||
Total liabilities
|
|
|
|||||||||
Equity
|
19
|
||||||||||
Share capital
|
|
|
|||||||||
Translation reserve
|
(
|
)
|
|
||||||||
Capital reserve
|
|
|
|||||||||
Accumulated profit
|
|
|
|||||||||
Equity attributable to owners of the Company
|
|
|
|||||||||
Non-controlling interests
|
|
|
|||||||||
Total equity
|
|
|
|||||||||
Total liabilities and equity
|
|
|
____________________________
Cyril Pierre-Jean Ducau
Chairman of Board of Directors
|
____________________________
Robert L. Rosen
CEO
|
____________________________
Deepa Joseph
CFO
|
For the year ended December 31,
|
|||||||||||||||
2023
|
2022
|
2021
|
|||||||||||||
Note
|
$ Thousands
|
||||||||||||||
Revenue
|
20
|
|
|
|
|||||||||||
Cost of sales and services (excluding depreciation and amortization)
|
21
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Depreciation and amortization
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Gross profit
|
|
|
|
||||||||||||
Selling, general and administrative expenses
|
22
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Other income/(expense), net
|
|
|
(
|
)
|
|||||||||||
Operating profit
|
|
|
|
||||||||||||
Financing expenses
|
23
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Financing income
|
23
|
|
|
|
|||||||||||
Financing expenses, net
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Losses related to Qoros
|
10
|
|
|
(
|
)
|
||||||||||
Losses related to ZIM
|
9.B.a
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Share in (losses)/profit of associated companies, net
|
|||||||||||||||
- ZIM
|
9.A.2
|
(
|
)
|
|
|
||||||||||
- OPC’s associated companies
|
9.A.2
|
|
|
(
|
)
|
||||||||||
(Loss)/profit before income taxes
|
(
|
)
|
|
|
|||||||||||
Income tax expense
|
24
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
(Loss)/profit for the year
|
(
|
)
|
|
|
|||||||||||
Attributable to:
|
|||||||||||||||
Kenon’s shareholders
|
(
|
)
|
|
|
|||||||||||
Non-controlling interests
|
|
|
(
|
)
|
|||||||||||
(Loss)/profit for the year
|
(
|
)
|
|
|
|||||||||||
Basic/diluted (loss)/profit per share attributable to Kenon’s shareholders (in dollars):
|
25
|
||||||||||||||
Basic/diluted (loss)/profit per share
|
(
|
)
|
|
|
For the year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
(Loss)/Profit for the year
|
(
|
)
|
|
|
||||||||
Items that are or will be subsequently reclassified to profit or loss
|
||||||||||||
Foreign currency translation differences in respect of foreign operations
|
(
|
)
|
(
|
)
|
|
|||||||
Group’s share in other comprehensive income of associated companies
|
(
|
)
|
|
|
||||||||
Effective portion of change in the fair value of cash-flow hedges
|
(
|
)
|
|
|
||||||||
Change in fair value of other investments at FVOCI
|
|
(
|
)
|
|
||||||||
Change in fair value of derivative financial instruments used for hedging cash flows recorded to the cost of the hedged item
|
(
|
)
|
(
|
)
|
|
|||||||
Change in fair value of derivatives financial instruments used to hedge cash flows transferred to the statement of profit & loss
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Income taxes in respect of components of other comprehensive income
|
|
(
|
)
|
(
|
)
|
|||||||
Total other comprehensive income for the year
|
(
|
)
|
(
|
)
|
|
|||||||
Total comprehensive income for the year
|
(
|
)
|
|
|
||||||||
Attributable to:
|
||||||||||||
Kenon’s shareholders
|
(
|
)
|
|
|
||||||||
Non-controlling interests
|
|
|
(
|
)
|
||||||||
Total comprehensive income for the year
|
(
|
)
|
|
|
Non-
|
|||||||||||||||||||||||||||||||
controlling
|
|||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
|||||||||||||||||||||||||||||
Share
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
profit
|
Total
|
|||||||||||||||||||||||||||
Note
|
$ Thousands
|
||||||||||||||||||||||||||||||
Balance at January 1, 2023
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Transactions with owners, recognised directly in equity
|
|||||||||||||||||||||||||||||||
Contributions by and distributions to owners
|
|||||||||||||||||||||||||||||||
Dividend declared and paid
|
19.D
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Share-based payment transactions
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Own shares acquired
|
19.G
|
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Total contributions by and distributions to owners
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Changes in ownership interests in subsidiaries
|
|||||||||||||||||||||||||||||||
Acquisition of shares of subsidiary from holders of rights not conferring control
|
11.A.2
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Investments from holders of non-controlling interests in equity of subsidiary
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total changes in ownership interests in subsidiaries
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total comprehensive income for the year
|
|||||||||||||||||||||||||||||||
Net (loss)/profit for the year
|
|
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Total comprehensive income for the year
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||
Balance at December 31, 2023
|
|
(
|
)
|
|
|
|
|
|
Non-
|
|||||||||||||||||||||||||||||||
controlling
|
|||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
|||||||||||||||||||||||||||||
Share
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
profit
|
Total
|
|||||||||||||||||||||||||||
Note
|
$ Thousands
|
||||||||||||||||||||||||||||||
Balance at January 1, 2022
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Transactions with owners, recognised directly in equity
|
|||||||||||||||||||||||||||||||
Contributions by and distributions to owners
|
|||||||||||||||||||||||||||||||
Cash distribution to owners of the Company
|
19.F
|
(
|
)
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||||
Share-based payment transactions
|
|
|
|
|
|
||||||||||||||||||||||||||
Total contributions by and distributions to owners
|
(
|
)
|
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||||||||||
Changes in ownership interests in subsidiaries
|
|||||||||||||||||||||||||||||||
Dilution in investment in subsidiary
|
11.A.7 |
|
|
|
|
|
|
|
|||||||||||||||||||||||
Acquisition of subsidiary with non-controlling interest
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Investments from holders of non-controlling interests in equity of subsidiary
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total changes in ownership interests in subsidiaries
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total comprehensive income for the year
|
|||||||||||||||||||||||||||||||
Net profit for the year
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
Total comprehensive income for the year
|
|
(
|
)
|
|
|
|
|
|
|||||||||||||||||||||||
Balance at December 31, 2022
|
|
|
|
|
|
|
|
Non-
|
|||||||||||||||||||||||||||||||
controlling
|
|||||||||||||||||||||||||||||||
Attributable to the owners of the Company
|
interests
|
Total
|
|||||||||||||||||||||||||||||
Share
|
Translation
|
Capital
|
Accumulated
|
||||||||||||||||||||||||||||
Capital
|
reserve
|
reserve
|
profit
|
Total
|
|||||||||||||||||||||||||||
Note
|
$ Thousands
|
||||||||||||||||||||||||||||||
Balance at January 1, 2021
|
|
|
(
|
)
|
|
|
|
|
|||||||||||||||||||||||
Transactions with owners, recognised directly in equity
|
|||||||||||||||||||||||||||||||
Contributions by and distributions to owners
|
|||||||||||||||||||||||||||||||
Share-based payment transactions
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Dividends declared
|
19.D
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Total contributions by and distributions to owners
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||
Changes in ownership interests in subsidiaries
|
|||||||||||||||||||||||||||||||
Dilution in investment in subsidiary
|
11.A.7
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Non-controlling interests in respect of business combinations
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Investments from holders of non-controlling interests in equity of subsidiary
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total changes in ownership interests in subsidiaries
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total comprehensive income for the year
|
|||||||||||||||||||||||||||||||
Net profit for the year
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Other comprehensive income for the year, net of tax
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total comprehensive income for the year
|
|
|
|
|
|
(
|
)
|
|
|||||||||||||||||||||||
Balance at December 31, 2021
|
|
|
|
|
|
|
|
For the year ended December 31,
|
|||||||||||||||
2023
|
2022
|
2021
|
|||||||||||||
Note
|
$ Thousands
|
||||||||||||||
Cash flows from operating activities
|
|||||||||||||||
(Loss)/Profit for the year
|
(
|
)
|
|
|
|||||||||||
Adjustments:
|
|||||||||||||||
Depreciation and amortization
|
|
|
|
||||||||||||
Financing expenses, net
|
23
|
|
|
|
|||||||||||
Share in losses/(profit) of associated companies, net
|
9.A.2
|
|
(
|
)
|
(
|
)
|
|||||||||
Losses related to Qoros
|
10
|
|
|
|
|||||||||||
Losses related to ZIM
|
9.B.a
|
|
|
|
|||||||||||
Share-based payments
|
(
|
)
|
|
|
|||||||||||
Other expenses, net
|
|
|
|
||||||||||||
Income taxes
|
|
|
|
||||||||||||
|
|
|
|||||||||||||
Change in trade and other receivables
|
(
|
) |
(
|
)
|
(
|
)
|
|||||||||
Change in trade and other payables
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Cash generated from operating activities
|
|
|
|
||||||||||||
Dividends received from associated companies, net
|
|
|
|
||||||||||||
Income taxes paid, net
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Net cash provided by operating activities
|
|
|
|
For the year ended December 31,
|
|||||||||||||||
2023
|
2022
|
2021
|
|||||||||||||
Note
|
$ Thousands
|
||||||||||||||
Cash flows from investing activities
|
|||||||||||||||
Short-term deposits and restricted cash, net
|
|
(
|
)
|
|
|||||||||||
Short-term collaterals deposits, net
|
|
(
|
)
|
|
|||||||||||
Investment in long-term deposits, net
|
|
|
|
||||||||||||
Investments in associated companies, less cash acquired
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Acquisition of subsidiary, less cash acquired
|
11.A.4
|
(
|
)
|
|
(
|
)
|
|||||||||
Acquisition of property, plant and equipment, intangible assets and payment of
long-term advance deposits and prepaid expenses |
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Proceeds from sales of interest in ZIM
|
9.B.a.4
|
|
|
|
|||||||||||
Proceeds from distribution from associated companies
|
|
|
|
||||||||||||
Proceeds from sale of subsidiary, net of cash disposed off
|
|
|
|
||||||||||||
Proceeds from sale of other investments
|
|
|
|
||||||||||||
Purchase of other investments
|
(
|
)
|
(
|
)
|
|
||||||||||
Long-term loan to an associate
|
(
|
)
|
|
(
|
)
|
||||||||||
Reimbursement in respect of right-of-use asset
|
|
|
|
||||||||||||
Interest received
|
|
|
|
||||||||||||
Proceeds from/(payment of) transactions in derivatives, net
|
|
|
(
|
)
|
|||||||||||
Payment of financial guarantee
|
10.6
|
|
|
(
|
)
|
||||||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Cash flows from financing activities
|
|||||||||||||||
Repayment of long-term loans, debentures and lease liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Short-term credit from banks and others, net
|
|
|
|
||||||||||||
Proceeds from Veridis transaction
|
11.A.2
|
|
|
|
|||||||||||
Proceeds from issuance of share capital by a subsidiary to non-controlling
interests, net of issuance expenses |
11.A.7 |
|
|
|
|||||||||||
Investments from holders of non-controlling interests in equity of subsidiary
|
|
|
|
||||||||||||
Tax Equity Investment
|
18.A.4.d
|
|
|
|
|
||||||||||
Receipt of long-term loans
|
|
|
|
||||||||||||
Proceeds from/(payment of) derivative financial instruments, net
|
|
(
|
)
|
(
|
)
|
||||||||||
Repurchase of own shares
|
(
|
)
|
|
|
|||||||||||
Costs paid in advance in respect of taking out of loans
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Cash distribution and dividends paid
|
19.D, 19.F
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||
Dividends paid to holders of non-controlling interests
|
|
|
(
|
)
|
|||||||||||
Payment of early redemption commission with respect to the debentures
|
15.1.B
|
|
|
|
(
|
)
|
|||||||||
Proceeds from issuance of debentures, less issuance expenses
|
15.2
|
|
|
|
|||||||||||
Interest paid
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Net cash provided by/(used in) financing activities
|
|
(
|
)
|
|
|||||||||||
Increase in cash and cash equivalents
|
|
|
|
||||||||||||
Cash and cash equivalents at beginning of the year
|
|
|
|
||||||||||||
Effect of exchange rate fluctuations on balances of cash and cash equivalents
|
(
|
)
|
(
|
)
|
|
||||||||||
Cash and cash equivalents at end of the year
|
|
|
|
A. |
The Reporting Entity
|
B. |
Definitions
|
A. |
Declaration of compliance with International Financial Reporting Standards
|
B. |
Functional and presentation currency
|
C. |
Basis of measurement
|
• |
Deferred tax assets and liabilities
|
• |
Derivative instruments
|
• |
Assets and liabilities in respect of employee benefits
|
• |
Investments in associated companies
|
• |
Long-term investment (Qoros)
|
D. |
Use of estimates and judgment
|
1. |
Allocation of acquisition costs
|
2. |
Long-term investment (Qoros)
|
3. |
Recoverable amount of cash-generating unit that includes goodwill
|
4. |
Recoverable amount of cash-generating unit of investment in equity-accounted companies (ZIM)
|
E. |
Israel Hamas War (“the War”)
|
A. |
First-time application of new accounting standards, amendments and interpretations
|
B. |
Basis for consolidation/combination
|
(1) |
Business combinations
|
(2) |
Subsidiaries
|
(3) |
Non-Controlling Interest (“NCI”)
|
(4) |
Investments in equity-accounted investees
|
C. |
Financial Instruments
|
a) |
Classification and measurement of financial assets and financial liabilities
|
- |
The objective of the entity’s business model is to hold the financial asset to collect the contractual cash flows; and |
- |
The contractual terms of the financial asset create entitlement on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
|
- |
It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
|
- |
Its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
|
b) |
Subsequent measurement
|
• |
the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realising cash flows through the sale of the assets;
|
• |
how the performance of the portfolio is evaluated and reported to the Group’s management; |
• |
the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; |
• |
how managers of the business are compensated - e.g. whether compensation is based on the fair value of the assets managed or the contractual cash flows collected; and |
• |
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity. |
• |
contingent events that would change the amount or timing of cash flows; |
• |
terms that may adjust the contractual coupon rate, including variable rate features; |
• |
prepayment and extension features; and |
• |
terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features). |
c) |
Impairment
|
- |
Contract assets (as defined in IFRS 15); |
- |
Financial assets measured at amortized cost; |
- |
Financial guarantees; |
- |
Debt investments; |
- |
Lease receivables. |
Note 3 - Material Accounting Policies (Cont’d)
|
-
|
It is not probable that the borrower will fully meet its payment obligations to the Company, and the Company has no right to perform actions such as the realization of collaterals (if any); or
|
|
-
|
The contractual payments in respect of the financial asset are more than 90 days in arrears.
|
- |
the change is necessary as a direct consequence of the reform; and
|
- |
the new basis for determining the contractual cash flows is economically equivalent to the previous basis - i.e. the basis immediately before the change.
|
- |
designating an alternative benchmark rate as the hedged risk;
|
- |
updating the description of hedged item, including the description of the designated portion of the cash flows or fair value being hedged; or
|
- |
updating the description of the hedging instrument.
|
- |
it makes a change required by interest rate benchmark reform by using an approach other than changing the basis for determining the contractual cash flows of the hedging instrument;
|
- |
it chosen approach is economically equivalent to changing the basis for determining the contractual cash flows of the original hedging instrument; and
|
- |
the original hedging instrument is not derecognized
|
D. |
Property, plant and equipment, net
|
(1) |
Recognition and measurement
|
• |
The cost of materials and direct labor; |
• |
Any other costs directly attributable to bringing the assets to a working condition for their intended use; |
• |
Spare parts, servicing equipment and stand-by equipment; |
• |
When the Group has an obligation to remove the assets or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and |
• |
Capitalized borrowing costs. |
(2) |
Subsequent Cost
|
Note 3 - Material Accounting Policies (Cont’d)
(3) |
Depreciation
|
Years
|
|||
Roads, buildings and land (*)
|
|
||
Power plants
|
|
||
Maintenance work
|
|
||
Back up diesel fuel
|
|
E. |
Intangible assets, net
|
(1) |
Recognition and measurement
|
Goodwill
|
Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment; and any impairment loss is allocated to the carrying amount of the equity investee as a whole.
|
|
|
Other intangible assets
|
Other intangible assets, including licenses, patents and trademarks, which are acquired by the Group having finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.
|
(2) |
Amortization
|
• | Power purchase agreement |
• | Others |
(3) |
Subsequent expenditure
|
F. |
Leases
|
Years
|
|||
Land
|
|
||
Others
|
|
G. |
Impairment of non-financial assets
|
H. |
Revenue recognition
|
I. |
Income taxes
|
• |
Temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
|
• |
Temporary differences related to investments in subsidiaries and associates where the Group is able to control the timing of the reversal of the temporary differences and it is not probable that they will reverse it in the foreseeable future; and
|
• |
Taxable temporary differences arising on the initial recognition of goodwill.
|
J. |
Agreements with the tax equity partner
|
K. |
Operating segment and geographic information
|
1. |
OPC Power Plants – OPC Power Plants Ltd. (“OPC Power Plants”) (formerly OPC Israel Energy Ltd.) is a wholly owned subsidiary of OPC Energy Ltd. (“OPC”), which generates and supply electricity and energy in Israel.
|
2. |
CPV Group – CPV Group LP (“CPV Group”) is a limited partnership owned by OPC, which generates and supply electricity and energy in the United States.
|
3. |
ZIM – ZIM Integrated Shipping Services, Ltd., an associated company, is an Israeli global container shipping company.
|
L. |
New standards and interpretations not yet adopted
|
a) |
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
|
b) |
Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
|
c) |
Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
|
d) |
Lack of Exchangeability (Amendments to IAS 21)
|
A. |
Derivatives and Long-term investment (Qoros)
|
B. |
Non-derivative financial liabilities
|
C. |
Fair value of equity-accounted investments (ZIM)
|
1. |
the investment as a whole; or
|
2. |
each individual share making up the investment.
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Cash and cash equivalents in banks
|
|
|
||||||
Time deposits
|
|
|
||||||
|
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Short-term deposits with bank and others
|
|
|
||||||
Short-term restricted cash
|
|
|
||||||
|
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Debt investments - at FVOCI
|
|
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Advances to suppliers
|
|
|
||||||
Prepaid expenses
|
|
|
||||||
Input tax receivable
|
|
|
||||||
Grant receivable (1)
|
|
|
||||||
Deposits in connection with projects under construction (2)
|
|
|
||||||
Others
|
|
|
||||||
|
|
(1) |
See Note 18.A.4.d for more information.
|
(2) |
Collateral provided to secure a hedging agreement in CPV Valley amounting to $
|
A. |
Condensed information regarding significant associated companies
|
1. |
Condensed financial information with respect to the statement of financial position
|
CPV
|
CPV
|
CPV
|
CPV
|
CPV
|
CPV
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
ZIM
|
Fairview
|
Maryland
|
Shore
|
Towantic
|
Valley
|
Three Rivers
|
||||||||||||||||||||||||||||||||||||||||||||||||||
As at December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
2023
|
2022
|
|||||||||||||||||||||||||||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal place of business
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Proportion of ownership interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Current liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||
Non-current liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||
Total net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Group’s share of net assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Excess cost
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||||||
Total impairment loss
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||
Unrecognised losses*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Book value of investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||||||||||
Investments in associated companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. |
Condensed financial information with respect to results of operations
|
CPV
|
CPV
|
CPV
|
CPV
|
CPV
|
CPV
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ZIM**
|
Fairview
|
Maryland
|
Shore
|
Towantic
|
Valley
|
Three Rivers
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the year ended December 31,
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
2023
|
2022
|
2021
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss/income*
|
(
|
)
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
(
|
)
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income *
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total comprehensive income
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kenon’s share of comprehensive income
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kenon’s share of comprehensive income presented in the books
|
(
|
)
|
|
|
|
|
|
|
|
|
(
|
)
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
|
|
* |
Excludes portion attributable to non-controlling interest.
|
** |
As of December 31, 2023, additional share of losses of $
|
B. |
Additional information
|
a. |
ZIM
|
1. |
Financial position
As of December 31, 2023, ZIM’s total equity amounted to $
|
For the year ended
|
|||||||||||||
December 31
|
|||||||||||||
2023
|
2022
|
2021
|
|||||||||||
Note
|
$ Thousands
|
$ Thousands
|
$ Thousands
|
||||||||||
Gain on dilution from ZIM IPO
|
9.B.a.2
|
|
|
|
|||||||||
Loss on dilution from ZIM options exercised
|
9.B.a.3
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Gain on sale of ZIM shares
|
9.B.a.4
|
|
|
|
|||||||||
(Impairment)/write back of ZIM investment
|
9.B.a.5
|
|
(
|
)
|
|
||||||||
(
|
)
|
(
|
)
|
(
|
)
|
2. |
Initial public offering
In February 2021, ZIM completed its initial public offering (“IPO”) of
Prior to the IPO, ZIM obtained waivers from its notes holders, subject to the completion of ZIM’s IPO, by which certain requirements and limitations in respect of repurchase of debt, incurrences of debt, vessel financing, reporting requirements and dividend distributions, were relieved or removed.
As a result of the IPO, Kenon’s interest in ZIM was diluted from
|
3. |
Exercise of ZIM options
In 2023, ZIM issued approximately
|
4. |
Sales of ZIM shares
Between September and November 2021, Kenon sold approximately
In March 2022, Kenon sold approximately
|
5. |
Impairment assessment
For the purposes of Kenon’s impairment assessment of its investment, ZIM is considered one CGU, which consists of all of ZIM’s operating assets. The recoverable amount is based on the higher of the value-in-use and the fair value less cost of disposal (“FVLCOD”).
Year Ended December 31, 2023
As of December 31, 2023, the carrying amount of ZIM has been reduced to zero after taking into account the equity accounted losses of ZIM and therefore, no assessment of further impairment of ZIM was necessary. Further, as of December 31, 2023, Kenon did not identify any objective evidence that the previously recognized impairment loss no longer exists or the previously assessed impairment amount may have decreased, and therefore, in accordance with IAS 36, no reversal of impairment was recognized.
Year Ended December 31, 2022
Kenon identified indicators of impairment in accordance with IAS 28 as a result of a significant decrease in ZIM’s market capitalization towards the end of 2022. Therefore, the carrying value of Kenon’s investment in ZIM was tested for impairment in accordance with IAS 36.
Kenon assessed the fair value of ZIM to be its market value as of December 31, 2022 and also assessed that, based solely on publicly available information within the current volatile shipping industry, no reasonable VIU calculation could be performed. As a result, Kenon concluded that the recoverable amount of its investment in ZIM is the market value. ZIM is accounted for as an individual share making up the investment and therefore no premium is added to the fair value of ZIM. Kenon measures the recoverable amount based on FVLCOD, measured at Level 1 fair value measurement under IFRS 13.
Given that market value is below carrying value Kenon recognized an impairment of $
Year Ended December 31, 2021
Kenon did not identify any objective evidence that its net investment in ZIM was impaired as of 31 December 31, 2021 and therefore, in accordance with IAS 28, no assessment of the recoverable amount of ZIM was performed.
|
C. |
OPC’s associated companies
|
Ownership interest as
at December 31
|
||||||||||||
Note
|
Main location of company’s activities
|
2023
|
2022
|
|||||||||
CPV Valley Holdings, LLC
|
9.C.1
|
|
|
%
|
|
%
|
||||||
CPV, Three Rivers, LLC
|
|
|
%
|
|
%
|
|||||||
CPV Fairview, LLC
|
|
|
%
|
|
%
|
|||||||
CPV Maryland, LLC
|
|
|
%
|
|
%
|
|||||||
CPV Shore Holdings, LLC
|
|
|
%
|
|
%
|
|||||||
CPV Towantic, LLC
|
|
|
%
|
|
%
|
1. |
CPV Valley Holdings, LLC (“CPV Valley”)
CPV Valley’s financial statements as of December 31, 2022 included a disclosure of circumstances related to CPV Valley’s ability to repay its liabilities under its credit agreement of over $
During 2023, CPV Valley’s financing agreement was amended and extended to May 31, 2026. On the signing date of the new financing agreement, CPV Valley repaid $
|
Note 10 – Long-term investment (Qoros)
For the year ended December 31,
|
||||||||||||||||
2023
|
2022
|
2021
|
||||||||||||||
Note
|
$ Thousands
|
|||||||||||||||
Fair value loss on remaining 12% interest in Qoros
|
10.3, 10.5
|
|
|
(
|
)
|
|||||||||||
Payment of financial guarantee
|
10.6
|
|
|
(
|
)
|
|||||||||||
|
|
(
|
)
|
1. |
As of December 31, 2023, the Group holds a
|
2. |
Qoros introduced a New Strategic Partner
In January 2018, the New Qoros Investor purchased
|
3. |
Kenon sells down from 24% to 12%
In January 2019, Kenon, on behalf of its wholly owned subsidiary Quantum (2007) LLC, announced that it had entered into an agreement to sell half (
Subsequent to the sale, the remaining
|
4. |
Agreement to sell remaining 12% interest
In April 2021, Quantum entered into an agreement with the New Qoros Investor to sell all of its remaining
To date, the New Qoros Investor has failed to make any of the required payments under this agreement.
In the fourth quarter of 2021, Kenon started arbitration proceedings against the New Qoros Investor for breach of the agreement and Kenon also started litigation proceedings against the New Qoros Investor with regards to the New Qoros Investor’s obligations to Kenon’s pledged shares in relation to Qoros’ RMB
As a result of the payment delay, Quantum had exercised the Put Option it has to sell its remaining shares to the New Qoros Investor.
|
5. |
Fair value assessment
In September 2021, in light of the events described above, Kenon performed an assessment of the fair value of the long-term investment (Qoros) under IFRS 13 Fair value measurement. Kenon concluded that the fair value of the long-term investment (Qoros) is zero. Therefore, in 2021 Kenon recognized a fair value loss of $
|
6. |
Financial Guarantees Provision and Releases
Following completion of the transaction in 2019 as described in Note 10.3, the New Qoros Investor assumed its proportionate obligations with respect to the Qoros loans. As a result of this and repayments by Qoros in relation to its loans, Chery’s obligations under the loan guarantees were reduced. As of December 31, 2020, Kenon’s back-to-back guarantee obligations to Chery were reduced to approximately $
In the fourth quarter of 2021, Chery paid the full amount of its guarantee obligations. Kenon paid $
As of December 31, 2023, Kenon has pledged substantially all of its interests in Qoros to secure Qoros’ RMB
|
7. |
Restrictions
Qoros has restrictions with respect to distribution of dividends and sale of assets deriving from legal and regulatory restrictions, restrictions under the joint venture agreement and the Articles of Association and restrictions stemming from credit received.
|
A. |
Investments
|
i. |
generation and supply of electricity and energy (electricity, steam and charging services for electric vehicles) in Israel to private customers, Israel Electric Company (“IEC”) and Noga – The Israel Independent System Operator Ltd. (“System Operator” or “Noga’), including initiation, development, construction and operation of power plants and facilities for energy generation;
|
ii. |
generation and supply of electricity and energy in the United States using renewable energy, including development, construction and management of renewable energy power plants; and
|
iii. |
generation and supply of electricity and energy in the United States using conventional (natural gas) power plants, including development, construction and management of conventional energy power plants in the United States.
|
Ownership interest as at December 31
|
|||||||||||
Note |
Main location
of company's
activities
|
2023 |
2022 |
||||||||
OPC Power Plants Ltd.
|
11.A.1
|
Israel
|
|
%
|
|
%
|
|||||
OPC Holdings Israel Ltd.
|
11.A.2
|
Israel
|
|
%
|
|
||||||
CPV Group LP
|
11.A.3
|
USA
|
|
%
|
|
%
|
1. |
OPC Power Plants Ltd. (“OPC Power Plants”)
|
Note 11 – Subsidiaries (Cont’d)
1.1 |
OPC Gat Power Plant (“Gat Partnership”)
On March 30, 2023, the transaction between OPC Power Plants, together with Dor Alon Energy in Israel (1988) Ltd. (“Dor Alon”), and Dor Alon Gas Power Plants Limited Partnership (the “Seller”) for purchase of the rights in a power plant located in Kiryat Gat Industrial Zone (“Gat Partnership”) was completed, and all rights in the Gat Partnership were transferred to OPC.
The transaction was completed for a consideration of NIS
Determination of provisional fair value of identified assets and liabilities
The acquisition of the Gat Partnership was accounted for according to the provisions of IFRS 3 - “Business Combinations”. On the Transaction Completion Date, OPC included the net assets of the Gat Partnership in accordance with their fair value.
As of the approval date of the financial statements, OPC has yet to complete the attribution of acquisition cost to the identifiable assets and liabilities. As a result, some of the fair value data are provisional and there may be changes that will affect the data included below. Set forth below is the fair value of the identifiable assets and liabilities acquired (according to provisional amounts):
|
$ Million
|
||||
Cash and cash equivalents
|
|
|||
Trade and other receivables
|
|
|||
Property, plant, and equipment - facilities and electricity generation and
supply license (1) |
|
|||
Property, plant, and equipment - land owned by the Gat Partnership (2)
|
|
|||
Trade and other payables
|
(
|
)
|
||
Loans from former right holders (3)
|
(
|
)
|
||
Deferred tax liabilities
|
(
|
)
|
||
Identifiable assets, net
|
|
|||
Goodwill (4)
|
|
|||
Total consideration (5)
|
|
(1) |
The Group applied IFRS 3 and allocate the fair value of the facilities and the electricity supply license to a single asset. The fair value was determined by an independent appraiser using the income approach, the MultiPeriod Excess Earning Method. The valuation methodology included several key assumptions that constituted the basis for cash flow forecasts, including, among other things, electricity and gas prices, and nominal post-tax discount rate of
|
(2) |
The fair value of the land was determined by an external and independent land appraiser using the discounted cash flow technique (the discount rate used is
|
(3) |
The loans were repaid immediately after the acquisition date.
|
(4) |
The goodwill arising as part of the business combination reflects the synergy between the activity of the Gat Partnership and the Rotem Power Plant.
|
(5) |
The consideration includes a cash payment of NIS
|
The aggregate cash flows that were used by the Group as a result of the acquisition transaction:
|
$ Million
|
||||
Cash and other cash equivalents paid (excluding consideration used to repay shareholders’ loan)
|
|
|||
Cash and other cash equivalents acquired
|
(
|
)
|
||
|
2. |
OPC Holdings Israel Ltd. (“OPC Holdings Israel”)
In May 2022, OPC had entered into an agreement with Veridis Power Plants (“Veridis”) to form OPC Holdings Israel Ltd. (“OPC Holdings Israel”), which will hold and operate all of OPC’s business activities in the energy and electricity generation and supply sectors in Israel (“Veridis Transaction”).
Upon completion of the Veridis Transaction in 2023, OPC transferred to OPC Holdings Israel, among other things, its
As a result of the Veridis Transaction, OPC holds
The Veridis transaction is accounted for in accordance with the provisions of IFRS 10 – “Consolidated Financial Statements”. Accordingly, all differences between the cash received from Veridis as stated above and the increase in the non-controlling interests were recognized in capital reserve from transactions with non-controlling interests.
|
3. |
CPV Group LP (“CPV Group”)
CPV Group is engaged in the development, construction and management of power plants using renewable energy and conventional energy (power plants running on natural gas of the advanced‑generation combined‑cycle type) in the United States. The CPV Group holds rights in active power plants that it initiated and developed – both in the area of conventional energy and in the area of renewable energy. In addition, through an asset management group the CPV Group is engaged in provision of management services to power plants in the United States using a range of technologies and fuel types, by means of signing asset‑management agreements, usually for short to medium periods. Refer to Note 9.C for further details on associates of CPV Group.
|
4. |
OPC Power Ventures LP (“OPC Power”)
In October 2020, OPC signed a partnership agreement (the “Partnership Agreement” and the “Partnership”, where applicable) with three financial entities to form OPC Power, whereby the limited partners in the Partnership are OPC which holds a
The General Partner of the Partnership, a wholly-owned company of OPC, will manage the Partnership’s business as its General Partner, with certain material actions (or which may involve a conflict of interest between the General Partner and the limited partners), requiring approval of a majority a of special majority (according to the specific action) of the institutional investors which are limited partners. The General Partner is entitled to management fees and success fees subject to meeting certain achievements.
OPC also entered into an agreement with entities from the Migdal Insurance Group with respect to their holdings in the Partnership, whereby OPC granted said entities a put option, and they granted OPC a call option (to the extent that the put option is not exercised), which is exercisable after
The total investment undertakings and provision of shareholders’ loans provided by all partners under the Partnership Agreement pro rata to the holdings discussed above is $
|
In 2021, OPC and the holders of the non-controlling interests provided OPC Power in partnership capital and loans of approximately $
In 2022, the Limited Partners in the Partnership provided OPC Power with equity investments totaling $
In 2023, OPC and non-controlling interests made equity investments in the partnership OPC Power Ventures LP (both directly and indirectly) of NIS
|
5. |
Acquisition of CPV Group
On January 25, 2021 (“Transaction Completion Date”), the Group acquired
On the Transaction Completion Date, in accordance with the mechanism for determination of the consideration as defined in the acquisition agreement, the Buyer paid the sellers approximately $
OPC partially hedged its exposure to changes in the cash flows from payments in US dollars in connection with the agreement for acquisition of the CPV Group by means of forward transactions and dollar deposits. OPC chose to designate the forward transactions as an accounting hedge. On the Transaction Completion Date, OPC recorded an amount of approximately NIS
The contribution of the CPV Group to the Group’s revenue and consolidated loss from the acquisition date until December 31, 2021 amounted to $
Following the acquisition of CPV Group, the fair value of identifiable assets and liabilities as of the acquisition date had been determined to be $
|
6. |
Acquisition of Mountain Wind Power Plant
In January 2023, CPV Group through its
On April 5, 2023, the transaction was completed and CPV Group received all rights in the Mountain Wind Project for consideration of $
|
Determination of fair value of identified assets and liabilities
The acquisition of the Mountain Wind Project was accounted for according to the provisions of IFRS 3 - “Business Combinations”. On the Transaction Completion Date, OPC included the net assets of the Mountain Wind Project in accordance with their fair value.
Set forth below is the fair value of the identifiable assets and liabilities acquired:
|
$ Million
|
||||
Trade and other receivables
|
|
|||
Property, plant, and equipment (1)
|
|
|||
Intangible assets (1)
|
|
|||
Trade and other payables
|
(
|
)
|
||
Liabilities in respect of evacuation and removal
|
(
|
)
|
||
Identifiable assets, net
|
|
|||
Goodwill (2)
|
|
|||
Total consideration
|
|
(1) |
The fair value was determined using the discounted cash flow method. The valuation methodology included a number of key assumptions that constituted the basis for cash flow forecasts, including, among other things, electricity and gas prices, and nominal post-tax discount rate of
|
(2) |
The goodwill in the transaction reflects the business potential of the Group’s entry into the renewable energies market in New England, USA. CPV Group expects that the entire amount of the goodwill will be deductible for tax purposes.
|
7. |
Issuances of new shares by OPC
|
8. |
Rights issuance
|
9. |
Dividends
|
B. |
The following table summarizes the information relating to the Group’s subsidiary in 2023, 2022 and 2021 that has material NCI:
|
As at and for the year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
OPC Energy Ltd.
|
OPC Energy Ltd.
|
OPC Energy Ltd.
|
||||||||||
$ Thousands
|
||||||||||||
NCI percentage *
|
|
%
|
|
%
|
|
%
|
||||||
Current assets
|
|
|
|
|||||||||
Non-current assets
|
|
|
|
|||||||||
Current liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Non-current liabilities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net assets
|
|
|
|
|||||||||
Carrying amount of NCI
|
|
|
|
|||||||||
Revenue
|
|
|
|
|||||||||
Profit/(loss) after tax
|
|
|
(
|
)
|
||||||||
Other comprehensive income
|
(
|
)
|
(
|
)
|
|
|||||||
Profit/(loss) attributable to NCI
|
|
|
(
|
)
|
||||||||
OCI attributable to NCI
|
(
|
) |
(
|
)
|
|
|||||||
Cash flows from operating activities
|
|
|
|
|||||||||
Cash flows used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash flows from financing activites excluding dividends paid to NCI
|
|
|
|
|||||||||
Dividends paid to NCI
|
|
|
(
|
)
|
||||||||
Effect of changes in the exchange rate on cash and cash equivalents
|
(
|
)
|
(
|
)
|
|
|||||||
Net increase/(decrease) in cash and cash equivalents
|
|
|
|
A. |
Composition
|
Roads, buildings and leasehold improvements
|
Facilities,
machinery and equipment
|
Wind turbines
|
Office furniture and equipment
|
Assets under construction
|
Other
|
Total
|
||||||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||||||
Cost
|
||||||||||||||||||||||||||||
Balance at January 1, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Additions
|
|
|
|
(
|
)
|
|
|
|
||||||||||||||||||||
Disposals
|
(
|
)
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||
Reclassification
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||
Differences in translation reserves
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at December 31, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Additions
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Disposals
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||
Reclassification
|
|
|
|
|
(
|
)
|
|
|
||||||||||||||||||||
Acquisitions through business combination
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Differences in translation reserves
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||
Balance at December 31, 2023
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Accumulated depreciation
|
||||||||||||||||||||||||||||
Balance at January 1, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Additions
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Disposals
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
(
|
)
|
||||||||||||||||
Differences in translation reserves
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||||||
Balance at December 31, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Additions
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Disposals
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||||||
Differences in translation reserves
|
(
|
)
|
(
|
)
|
|
|
|
|
(
|
)
|
||||||||||||||||||
Balance at December 31, 2023
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Carrying amounts
|
||||||||||||||||||||||||||||
At January 1, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
At December 31, 2022 | ||||||||||||||||||||||||||||
At December 31, 2023 |
Note 12 – Property, Plant and Equipment, Net (Cont’d)
B. |
The amount of borrowing costs capitalized in 2023 was approximately $
|
C. |
Fixed assets purchased on credit in 2023 was approximately $
|
D. |
The composition of depreciation expenses from continuing operations is as follows:
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Depreciation and amortization included in gross profit
|
|
|
||||||
Depreciation and amortization charged to selling, general and administrative expenses
|
|
|
||||||
Depreciation and amortization from continuing operations
|
|
|
A. |
Composition:
|
Goodwill*
|
PPA**
|
Others
|
Total
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Cost
|
||||||||||||||||
Balance as at January 1, 2022
|
|
|
|
|
||||||||||||
Additions
|
|
|
|
|
||||||||||||
Translation differences
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||
Balance as at December 31, 2022
|
|
|
|
|
||||||||||||
Additions
|
|
|
|
|
||||||||||||
Acquisitions through business combination
|
|
|
|
|
||||||||||||
Impairment
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Translation differences
|
|
|
(
|
)
|
|
|||||||||||
Balance as at December 31, 2023
|
|
|
|
|
||||||||||||
Amortization
|
||||||||||||||||
Balance as at January 1, 2022
|
|
|
|
|
||||||||||||
Amortization for the year
|
|
|
|
|
||||||||||||
Translation differences
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Balance as at December 31, 2022
|
|
|
|
|
||||||||||||
Amortization for the year
|
|
|
|
|
||||||||||||
Translation differences
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Balance as at December 31, 2023
|
|
|
|
|
||||||||||||
Carrying value
|
||||||||||||||||
As at January 1, 2022
|
|
|
|
|
||||||||||||
As at December 31, 2022
|
|
|
|
|
||||||||||||
As at December 31, 2023
|
|
|
|
|
* |
Relates mainly to goodwill arising from the acquisition of CPV Group of $
Refer to Note 11.A.5 for further information.
|
B. |
The total carrying amounts of intangible assets with a finite useful life and with an indefinite useful life or not yet available for use
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Intangible assets with a finite useful life
|
|
|
||||||
Intangible assets with an indefinite useful life or not yet available for use
|
|
|
||||||
|
|
C. |
Impairment testing of goodwill arising from CPV Group
|
1. |
Forecast years - represents the period spanning from January 1, 2024 to December 31, 2054, based on the estimate of the economic life of the power plants and their value as at the end of the forecast period.
|
2. |
Market prices and capacity - market prices (electricity, capacity, RECs, etc.) are based on PPAs and market forecasts received from external and independent information sources, taking into account the relevant area and market for each project and the relevant regulation.
|
3. |
Estimated construction costs of the projects, and entitlement to tax benefits in respect of projects under construction (ITC or production tax credit, as applicable).
|
4. |
The annual long-term inflation rate of
|
5. |
The WACC - calculated for each material project separately, and ranges between
|
D. |
Impairment testing of goodwill arising from Gat Power Plant
|
Note 13 – Intangible Assets, Net (Cont’d)
1. |
For the OPC Rotem Power Plant - based on fair value less cost to sell
|
2. |
For the OPC Hadera and Gat Power Plant - according to their carrying amounts
|
1. |
EBITDA for 2023 at of NIS
|
2. |
An EV/EBITDA multiple of 11.4, based on the OPC’s experience in transactions carried out in the Israeli market in the field of power plants.
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Deferred expenses, net (1)
|
|
|
* |
|||||
Loan to associated company (2)
|
|
|
||||||
Contract costs
|
|
|
||||||
Other non-current assets
|
|
|
|
|||||
|
|
* |
* Reclassified
(1) |
Relates to deferred expenses, net for OPC’s connection fees to the gas transmission network and the electricity grid.
|
(2) |
Mainly relates to loan to CPV Valley with SOFR-based interest plus a weighted average interest margin of approximately
|
As at December 31
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Current liabilities
|
||||||||
Current maturities of long-term liabilities:
|
||||||||
Loans from banks and others
|
|
|
||||||
Non-convertible debentures
|
|
|
||||||
Others
|
|
|
||||||
|
|
|||||||
Non-current liabilities
|
||||||||
Loans from banks and others
|
|
|
||||||
Non-convertible debentures
|
|
|
||||||
|
|
|||||||
Total
|
|
|
A.1
|
Classification based on currencies and interest rates
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Debentures (1)
|
||||||||
In shekels(1)
|
|
|
||||||
Loans from banks and others (2)
|
||||||||
In shekels
|
|
|
||||||
|
|
1. |
Annual interest rates between
|
2. |
Hadera: Annual interest between
|
|
As of December 31, 2023 and 2022, all loans and debentures relate to liabilities incurred by OPC and its subsidiaries.
|
A.2
|
Reconciliation of movements of liabilities to cash flows arising from financing activities
|
Financial liabilities (including interest payable)
|
||||||||||||||||
Loans and credit
|
Loans from holders of interests that do not confer financial control
|
Debentures
|
Financial instruments designated for hedging
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Balance as at January 1, 2023
|
|
|
|
(
|
)
|
|||||||||||
Changes as a result of cash flows from financing activities
|
||||||||||||||||
Payment in respect of derivative financial instruments, net
|
|
|
|
|
||||||||||||
Receipt of loans
|
|
|
|
|
||||||||||||
Repayment of debentures and loans
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
Interest paid
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
Net cash provided by/(used in) financing activities
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Effect of changes in foreign currency exchange rates
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Interest and CPI expenses
|
|
|
|
(
|
) | |||||||||||
Changes in fair value, application of hedge accounting and other
|
|
(
|
)
|
(
|
)
|
|
||||||||||
Business combination |
|
|||||||||||||||
Balance as at December 31, 2023
|
|
|
|
(
|
)
|
Financial liabilities (including interest payable)
|
||||||||||||||||
Loans and credit
|
Loans from holders of interests that do not confer financial control
|
Debentures
|
Financial instruments designated for hedging
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Balance as at January 1, 2022
|
|
|
|
(
|
)
|
|||||||||||
Changes as a result of cash flows from financing activities
|
||||||||||||||||
Payment in respect of derivative financial instruments, net
|
|
|
|
(
|
)
|
|||||||||||
Receipt of loans
|
|
|
|
|
||||||||||||
Repayment of debentures and loans
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
Interest paid
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
Prepaid costs for loans taken
|
(
|
)
|
|
|
|
|||||||||||
Net cash provided by/(used in) financing activities
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Effect of changes in foreign currency exchange rates
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|||||||||
Interest and CPI expenses
|
|
|
|
|
||||||||||||
Changes in fair value, application of hedge accounting and other
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Balance as at December 31, 2022
|
|
|
|
(
|
)
|
1. |
Long-term loans from banks and others
|
A. |
Gat Financing Agreement
|
B. |
OPC Rotem financing agreement
|
C. |
OPC Hadera financing agreement
|
D. |
OPC Tzomet financing agreement
|
E. |
CPV Keenan financing agreement
|
F. |
Mountain Wind Financing Agreement
|
G. |
Financing Agreement for Construction in the US Renewable Energies Segment
|
H.
|
OPC Power – Shareholder Loans
|
2. |
Debentures
|
A. |
Series B Debentures
|
B. |
Series C Debentures
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Trade Payables
|
|
|
||||||
Liability to tax equity partner (1)
|
|
|
||||||
Accrued expenses and other payables
|
|
|
||||||
Government institutions
|
|
|
||||||
Employees and payroll institutions
|
|
|
||||||
Interest payable
|
|
|
||||||
Others
|
|
|
||||||
|
|
A) |
The Group leases the following items:
|
i) |
Land
|
ii) |
OPC gas transmission infrastructure
|
iii) |
Offices
|
iv) |
Low-value items
|
B) |
Right-of-use assets
|
As at December 31, 2023
|
||||||||||||||||
Balance at beginning of year
|
Depreciation charge for the year
|
Adjustments
|
Balance at end of year
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Land
|
|
(
|
)
|
|
|
|||||||||||
PRMS facility
|
|
(
|
)
|
|
|
|||||||||||
Offices
|
|
(
|
)
|
|
|
|||||||||||
Long-term deferred expenses
|
|
(
|
)
|
|
|
|||||||||||
|
(
|
)
|
|
|
As at December 31, 2022
|
||||||||||||||||
Balance at beginning of year
|
Depreciation charge for the year
|
Adjustments
|
Balance at end of year
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Land
|
|
(
|
)
|
(
|
) | |||||||||||
PRMS facility
|
(
|
)
|
|
|||||||||||||
Offices
|
|
(
|
)
|
|
|
|||||||||||
Long-term deferred expenses |
(
|
)
|
( |
) |
|
* | ||||||||||
|
(
|
)
|
|
|
* |
* Reclassified
C) |
Amounts recognized in the consolidated statements of profit & loss and cash flows
|
As at
December 31,
|
As at
December 31,
|
|||||||
2023
|
2022
|
|||||||
$ Thousands
|
$ Thousands
|
|||||||
Interest expenses in respect of lease liability
|
|
|
||||||
Total cash outflow for leases
|
|
|
D) |
Land lease agreements
|
i) |
Lease of OPC Tzomet land
|
ii) |
Purchase of leasehold rights in land
|
iii) |
Backbone lease of land
|
A.
|
Contingent Liabilities
|
1. |
OPC Rotem Power Purchase Agreement
In 2014 (commencing in August), letters were exchanged between OPC Rotem and IEC regarding the tariff to be paid by OPC Rotem to IEC in respect of electricity that it had purchased from the electric grid, in connection with sale of electricity to private customers, where the electricity generation in the power plant was insufficient to meet the electricity needs of such customers.
It is OPC Rotem’s position that the applicable tariff is the “ex-post” tariff, whereas according to IEC in the aforesaid exchange of letters, the applicable tariff is the TAOZ tariff, and based on part of the correspondences even a tariff that is
IEC raised contentions regarding past accountings in respect of the acquisition cost of energy for OPC Rotem’s customers in a case of a load reduction of the plant by the System Operator, and collection differences due to non-transfer of meter data in the years 2013 through 2015. In addition, IEC stated its position with respect to additional matters in the arrangement between the parties relating to the acquisition price of surplus energy and the acquisition cost of energy by OPC Rotem during performance of tests. OPC Rotem’s position regarding the matters referred to by IEC, based on its legal advisors, is different and talks are being held between the parties.
In March 2022, OPC Rotem and the IEC signed a settlement agreement regarding past accounting in respect of the acquisition cost of energy for OPC Rotem’s customers in a case of a load reduction of the plant by Noga, and collection differences due to non-transfer of meter data between 2013 and 2015. As part of the settlement, OPC Rotem paid a total of approximately $
As of December 31, 2023, in OPC Rotem’s estimation, it is more likely than not that OPC Rotem will not pay any additional amounts in respect of the period ended December 31, 2023. Therefore, no provision was included in the financial statements.
|
2. |
Construction agreements |
|
a. |
OPC Hadera
In January 2016, an agreement was signed between OPC Hadera and SerIDOM Servicios Integrados IDOM, S.A.U (“IDOM”), for the design, engineering, procurement and construction of a cogeneration power plant, in consideration of about approximately $
IDOM has provided bank guarantees and a corporate guarantee of its parent company to secure the said obligations, and OPC has provided a corporate guarantee to IDOM, in the amount of $
In accordance with the construction agreement, OPC Hadera is entitled to certain compensation from IDOM in respect of the delay in completion of the construction of the Hadera Power Plant or compensation (limited to the amount of the limit set in the Agreement) in the event of failure to comply with the terms set out in the Agreement with regard to the Power Plant performance. The said compensation is capped by the amounts specified in the construction agreement, and up to an aggregate of $
According to the Construction Agreement, OPC Hadera has a contractual right to deduct any amount due to it under the Construction Agreement, including for the foregoing compensation, from any amounts that it owes to the construction contractor. In 2022, OPC Hadera deducted a total of $
In December 2023, Hadera and the Construction Contractor signed a settlement agreement, according to which, among other things, in exchange for the withdrawal from, and full and final settlement of, the parties' claims in connection with the disputes between Hadera and the Construction Contractor that are the subject of the arbitration proceeding, the Contractor will pay Hadera compensation in the amount of approx. NIS
As a result of the signing of the settlement agreement with the Construction Contractor, as of December 31, 2023, Hadera recognized in its statement of income approximately NIS
|
b. |
OPC Tzomet
|
It is noted that, according to the Construction Contractor, the continuity of construction work was affected, inter alia, by the COVID-19 Crisis, in light of the need for equipment and foreign work teams to arrive, and by delays in the global supply chains of components and equipment required for the project. As of December 31, 2023, OPC Tzomet is holding discussions with the Construction Contractor.
|
c. |
OPC Sorek 2
In May 2020, OPC Sorek 2 signed an agreement with SMS IDE Ltd., which won a tender of the State of Israel for construction, operation, maintenance and transfer of a seawater desalination facility on the “Sorek B” site (the “Sorek B Desalination Facility”), where OPC Sorek 2 will construct, operate and maintain an energy generation facility (“Sorek B Generation Facility”) with a generation capacity of about 87 MW on the premises of the Sorek 2 Desalination Facility, and will supply the energy required for the Sorek B Desalination Facility for a period of 25 years after the operation date of the Sorek B Desalination Facility. At the end of the aforesaid period, ownership of the Sorek B Generation Facility will be transferred to the State of Israel. OPC undertook to construct the Sorek B Generation Facility within 24 months from the date of approval of the National Infrastructure Plan (approved in November 2021), and to supply energy at a specific scope of capacity to the Sorek B Desalination Facility.
OPC Sorek 2’s share of the amount payable to the construction contractor is estimated at approximately $
As a result of the outbreak of the War, Construction Contractor served OPC Sorek 2 with a force majeure notice and OPC Sorek 2 served on its behalf a force majeure notice to IDE.
|
3. |
Agreements for the acquisition of natural gas
|
a. |
OPC Rotem and OPC Hadera
OPC Rotem and OPC Hadera has an agreement with Tamar Group in connection to the supply of natural gas to the power plants. Both OPC Rotem and OPC Hadera undertook to continue to consume all the gas required for its power plants from Tamar Group (including quantities exceeding the minimum quantities) up to the completion date of the commissioning of the Karish Reservoir, except for a limited consumption of gas during the commissioning period of the Karish Reservoir.
In December 2017, OPC Rotem, OPC Hadera, Israel Chemicals Ltd. and Bazan Ltd., engaged in agreements with Energean Israel Ltd. (hereinafter – “Energean”), which has holdings in the Karish Reservoir, for the purchase natural gas. In 2020, Energean notified OPC that “force majeure” events happened during the year, in accordance with the clauses pursuant to the agreements, and that the flow of the first gas from the Karish reservoir is expected to take place during the second half of 2021. OPC rejected the contentions that a “force majeure” event is involved.
Due to the delay in supply of the gas from the Karish Reservoir, OPC Rotem and OPC Hadera will be required to acquire the quantity of gas it had planned to acquire from Energean for purposes of operation of the power plants at present gas prices, which is higher than the price stipulated in the Energean agreement. The delays in the commercial operation date of Energean, and in turn, a delay in supply of the gas from the Karish Reservoir, will have an unfavorable impact on OPC’s profits. In the agreements with Energean, compensation for delays had been provided, the amount of which depends on the reasons for the delay, where the limit with respect to the compensation in a case where the damages caused is “force majeure” is lower. It is noted that the damages that will be caused to OPC stemming from a delay could exceed the amount of the said compensation.
In 2021, OPC Rotem and OPC Hadera received reduced compensation of approximately $
In May 2022, an amendment to the Energean Agreements was signed, which set out, among other things, arrangements pertaining to bringing forward the reduction of the quantities of gas supplied by OPC Rotem and OPC Hadera.
|
Note 18 – Contingent Liabilities and Commitments (Cont’d)
Energean issued OPC Hadera with a notice regarding the completion of the commissioning in relation to the OPC Hadera agreement and OPC Rotem agreement on February 28, 2023 and March 25, 2023 respectively. On March 26, 2023, Energean issued OPC Rotem with a notice in relation to commencement of commercial operation.
OPC Rotem and OPC Hadera recognized contractual financial amount in respect of a netting arrangement by bringing forward of the reduction notice. The total amount of NIS
|
4. |
Other contingent liabilities
|
a. |
Bazan electricity purchase claim
In November 2017, a request was filed with the Tel Aviv-Jaffa District Court to approve a derivative claim on behalf of Bazan. The request is based on the petitioner's contention that the undertaking in the electricity purchase transaction between Bazan and OPC Rotem is an extraordinary interested party transaction that did not receive the approval of the general assembly of Bazan shareholders on the relevant dates. The respondents to the request include Bazan, OPC Rotem, the Israel Corporation Ltd. and the members of Bazan's Board of Directors at the time of entering into the electricity purchase transaction. The requested remedies include remedies such as an injunction and financial remedies.
In July 2018, OPC Rotem submitted its response to the request. Bazan’s request for summary judgement was denied. Negotiations are being held for entering into a compromise agreement that will settle a lawsuit against Rotem and others, which was filed in July 2022.
In February 2023 the court handed down a judgment that approved the settlement agreement and OPC Rotem paid NIS
|
b. |
Oil Refineries Ltd. (now known as “Bazan”) gas purchase claim
In January 2018, a request was filed with the Tel Aviv-Jaffa District Court to approve a derivative claim by a shareholder of Bazan against former and current directors of Bazan, Israel Chemicals Ltd., OPC Rotem, OPC Hadera and IC (collectively the "Group Companies"), over: (1) a transaction of the Group Companies for the purchase of natural gas from Tamar Partners, (2) transactions of the Group Companies for the purchase of natural gas from Energean Israel Ltd. (“Energean”) and (3) transaction for sale of surplus gas to Bazan.
In August 2018, the Group Companies submitted their response to the claim filed. OPC rejected the contentions appearing in the claim and requested summary dismissal of the claim. Evidentiary hearings were held in the second half of 2021, after which summations were submitted in November 2022. In November 2023, the Court dismissed the entire motion.
|
c. |
Inkia Energy Limited (liquidated in 2019)
In December 2017, Kenon, through its wholly-owned subsidiary Inkia Energy Limited (“Inkia”), sold its Latin American and Caribbean power business to an infrastructure private equity firm, I Squared Capital (“ISQ”). Inkia agreed to indemnify the buyer and its successors, permitted assigns, and affiliates against certain losses arising from a breach of Inkia’s representations and warranties and certain tax matters, subject to certain time and monetary limits depending on the particular indemnity obligation. These indemnification obligations were supported by (a) a three-year pledge of shares of OPC which represented
In October 2020, as part of an early repayment of the deferred payment agreement where Kenon received $
|
In March 2022,
In August 2023, all of OPC shares that were previously pledged as part of the Inkia sale were released as part of a settlement agreement.
|
d. |
Tax equity partner agreement in Maple Hill
On May 12, 2023, CPV Group entered into an investment agreement with a tax equity partner totaling approximately $
In consideration for its investment in the project corporation, the tax equity partner is expected to receive most of the project’s tax benefits, including Investment Tax Credit (“ITC”) at a higher rate of
In December 2023, the terms and conditions for the commercial operation of the project were fully met in accordance with the tax equity investment agreement in the project, and the tax equity partner completed its entire investment in the project.
Immediately prior to the completion of the advancement of the tax equity partner’s investment, CPV Group and a third party entered into an agreement for the sale of the ITC grant in consideration for approximately $
|
B. |
Commitments
|
a. |
OPC Power Plants
OPC entered into long-term service maintenance contracts for its operating power plants. The number of maintenance hours and price are specified in the agreements.
OPC entered into long-term infrastructure contracts with Israel National Gas Lines Ltd. (“INGL”) for use of PRMS at its operating power plants. The price is specified in the agreements.
OPC entered into long-term PPAs with its customers (of which some included construction of generation facilities) for sale of electricity and gas. The supply quantity, period and pricing are specified in the agreements. OPC has also entered into long-term PPAs with its suppliers for purchase of electricity and gas. The minimum purchase quantity, period and pricing are specified in the agreements.
OPC entered into long-term construction agreements for constructing its power plants. The price, technical and engineering specifications, and work milestones are specified in the agreements. For more information relating to the construction of the Tzomet power plant, refer to 18.A.2.b.
|
b. |
CPV Group
In June 2023, CPV Group entered into an Engineering, Procurement and Construction ("EPC”) agreement with a construction contractor in respect of the Backbone project. As of the approval date of the financial statements, the total consideration in the EPC agreement was set at a fixed amount of NIS
|
A. |
Share Capital
|
Company
|
||||||||
No. of shares
|
||||||||
('000) | ||||||||
2023
|
2022
|
|||||||
Authorised and in issue at January, 1
|
|
|
||||||
Share repurchase and cancelled
|
(
|
)
|
|
|||||
Issued for share plan
|
|
|
||||||
Authorised and in issue at December. 31
|
|
|
B. |
Translation reserve
|
C. |
Capital reserves
|
D. |
Dividends
|
E. |
Kenon's share plan
|
F. |
Capital reduction
|
G. |
Share repurchase plan
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Revenue from sale of electricity and infrastructure services in Israel
|
|
|
|
|||||||||
Revenue from sale of electricity in US
|
|
|
|
|||||||||
Revenue from sale of steam in Israel
|
|
|
|
|||||||||
Revenue from provision of services and other revenue in US
|
|
|
|
|||||||||
Other revenue in Israel
|
|
|
|
|||||||||
|
|
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Fuels
|
|
|
|
|||||||||
Electricity and infrastructure services
|
|
|
|
|||||||||
Salaries and related expenses
|
|
|
|
|||||||||
Generation and operating expenses and outsourcing
|
|
|
|
|||||||||
Insurance
|
|
|
|
|||||||||
Cost in respect of sale of renewable energy
|
|
|
|
|||||||||
Cost in respect of provision of services revenue and other costs
|
|
|
|
|||||||||
Others
|
|
|
|
|||||||||
|
|
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Payroll and related expenses (1)
|
|
|
|
|||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Professional fees
|
|
|
|
|||||||||
Business development expenses
|
|
|
|
|||||||||
Expenses in respect of acquisition of CPV Group
|
|
|
|
|||||||||
Office maintenance
|
|
|
|
|||||||||
Other expenses
|
|
|
|
|||||||||
|
|
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Interest income from bank deposits
|
|
|
|
|||||||||
Amount reclassified to consolidated statements of profit & loss from capital reserve in respect of cash flow hedges
|
|
|
|
|||||||||
Net change in exchange rates
|
|
|
|
|||||||||
Net change in fair value of derivative financial instruments
|
|
|
|
|||||||||
Net change in the fair value of financial assets held for trade and available for sale
|
|
|
|
|||||||||
Other income
|
|
|
|
|||||||||
Financing income
|
|
|
|
|||||||||
Interest expenses to banks and others
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Amount reclassified to consolidated statements of profit & loss from capital reserve in respect of cash flow hedges
|
(
|
)
|
|
|
||||||||
Impairment loss on debt securities at FVOCI
|
(
|
)
|
(
|
)
|
|
|||||||
Net change in fair value of financial assets held for trade
|
|
(
|
)
|
|
||||||||
Net change in exchange rates
|
|
|
(
|
)
|
||||||||
Net change in fair value of derivative financial instruments
|
|
(
|
)
|
|
||||||||
Early repayment fee (Note 15.B, Note 15.E)
|
|
|
(
|
)
|
||||||||
Other expenses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Financing expenses
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net financing expenses
|
(
|
)
|
(
|
)
|
(
|
)
|
A. |
Components of the Income Taxes
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Current taxes on income
|
||||||||||||
In respect of current year
|
|
|
|
|||||||||
Deferred tax expense/(income)
|
||||||||||||
Creation and reversal of temporary differences
|
|
(
|
)
|
(
|
)
|
|||||||
Total tax expense on income
|
|
|
|
B. |
Reconciliation between the theoretical tax expense (benefit) on the pre-tax income (loss) and the actual income tax expenses
|
For the Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
(Loss)/Profit from continuing operations before income taxes
|
(
|
)
|
|
|
||||||||
Statutory tax rate
|
|
%
|
|
%
|
|
%
|
||||||
Tax computed at the statutory tax rate
|
(
|
)
|
|
|
||||||||
(Decrease) increase in tax in respect of:
|
||||||||||||
Elimination of tax calculated in respect of the Group’s share in profit of associated companies
|
|
(
|
)
|
(
|
)
|
|||||||
Different tax rate applicable to subsidiaries operating overseas
|
|
|
(
|
)
|
||||||||
Income subject to tax at a different tax rate
|
|
|
|
|||||||||
Non-deductible expenses
|
(
|
)
|
|
|
||||||||
Exempt income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Taxes in respect of prior years
|
|
(
|
)
|
(
|
)
|
|||||||
Tax in respect of foreign dividend
|
|
|
|
|||||||||
Share of non-controlling interests in entities transparent for tax purposes
|
|
(
|
)
|
|
||||||||
Tax losses and other tax benefits for the period regarding which deferred taxes were not recorded
|
|
|
|
|||||||||
Other differences
|
|
(
|
)
|
|
||||||||
Tax expense on income included in the statement of profit and loss
|
|
|
|
C.
|
Deferred tax assets and liabilities
|
1. |
Deferred tax assets and liabilities recognized
The deferred taxes are calculated based on the tax rate expected to apply at the time of the reversal as detailed below. Deferred taxes in respect of subsidiaries were calculated based on the tax rates relevant for each country.
|
Note 24 – Income Taxes (Cont’d)
Property plant and equipment
|
Carryforward of losses and deductions for tax purposes
|
Financial instruments
|
Other*
|
Total
|
||||||||||||||||
$ Thousands
|
||||||||||||||||||||
Balance of deferred tax (liability) asset as at January 1, 2022
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
||||||||||||
Changes recorded on the statement of profit and loss
|
(
|
)
|
|
(
|
)
|
|
|
|||||||||||||
Changes recorded in other comprehensive income
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||
Translation differences
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
||||||||||||
Balance of deferred tax (liability) asset as at December 31, 2022
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||
Changes recorded on the statement of profit and loss
|
(
|
)
|
|
|
(
|
)
|
(
|
)
|
||||||||||||
Changes recorded in other comprehensive income
|
|
|
|
|
|
|||||||||||||||
Changes recorded from business combinations
|
(
|
)
|
|
|
|
(
|
)
|
|||||||||||||
Translation differences
|
|
(
|
)
|
|
(
|
)
|
|
|||||||||||||
Balance of deferred tax (liability) asset as at December 31, 2023
|
(
|
)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
* |
This amount includes deferred tax arising from intangibles, undistributed profits, non-monetary items, associated companies and trade receivables distribution.
|
2. |
The deferred taxes are presented in the statements of financial position as follows:
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
As part of non-current assets
|
|
|
||||||
As part of current liabilities
|
|
(
|
)
|
|||||
As part of non-current liabilities
|
(
|
)
|
(
|
)
|
||||
(
|
)
|
(
|
)
|
Note 24 – Income Taxes (Cont’d)
3. |
Tax and deferred tax balances not recorded
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Losses for tax purposes
|
|
|
4. |
Safe harbor rules
|
Note 25 – Earnings per Share
A. |
(Loss)/Profit allocated to the holders of the ordinary shareholders
|
For the year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
(Loss)/Profit for the year attributable to Kenon’s shareholders
|
(
|
)
|
|
|
B. |
Number of ordinary shares
|
For the year ended December 31
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Thousands
|
||||||||||||
Weighted Average number of shares used in calculation of basic/diluted earnings per share
|
|
|
|
OPC Israel
|
CPV Group
|
ZIM
|
Others
|
Total
|
||||||||||||||||
$ Thousands
|
||||||||||||||||||||
2023
|
||||||||||||||||||||
Revenue
|
|
|
|
|
|
|||||||||||||||
Profit/(loss) before taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Income tax expense
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Profit/(loss) from continuing operations
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Depreciation and amortization
|
|
|
|
|
|
|||||||||||||||
Financing income
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Financing expenses
|
|
|
|
|
|
|||||||||||||||
Other items:
|
||||||||||||||||||||
Losses related to ZIM
|
|
|
|
|
|
|||||||||||||||
Share in profit of CPV excluding share of depreciation and
amortization and financing expenses, net
|
|
|
|
|
|
|||||||||||||||
Changes in net expenses, not in the ordinary course of |
|
|
||||||||||||||||||
Share of changes in fair value of derivative financial instruments |
( |
) |
|
( |
) |
|||||||||||||||
Share in (profit)/loss of associated companies
|
|
(
|
)
|
|
|
|
||||||||||||||
|
|
|
(
|
)
|
|
|||||||||||||||
Adjusted EBITDA
|
|
|
|
(
|
)
|
|
||||||||||||||
Segment assets
|
|
|
|
|
|
|||||||||||||||
Investments in associated companies
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Segment liabilities
|
|
|
|
|
|
Note 26 – Segment, Customer and Geographic Information (Cont’d)
OPC Israel
|
CPV Group
|
ZIM
|
Others
|
Total
|
||||||||||||||||
$ Thousands
|
||||||||||||||||||||
2022
|
||||||||||||||||||||
Revenue
|
|
|
|
|
|
|||||||||||||||
Profit before taxes
|
|
|
|
(
|
)
|
|
||||||||||||||
Income tax expense
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Profit/(loss) from continuing operations
|
|
|
|
(
|
)
|
|
||||||||||||||
Depreciation and amortization
|
|
|
|
|
|
|||||||||||||||
Financing income
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Financing expenses
|
|
|
|
|
|
|||||||||||||||
Other items:
|
||||||||||||||||||||
Losses related to ZIM
|
|
|
|
|
|
|||||||||||||||
Share in profit of CPV excluding share of depreciation and |
|
|
|
|
|
|||||||||||||||
Changes in net expenses, not in the ordinary course of |
|
|
||||||||||||||||||
Share of changes in fair value of derivative financial instruments |
|
|
||||||||||||||||||
Share in profit of associated companies
|
|
(
|
)
|
(
|
)
|
|
(
|
)
|
||||||||||||
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||
Adjusted EBITDA
|
|
|
|
(
|
)
|
|
||||||||||||||
Segment assets
|
|
|
|
|
|
|||||||||||||||
Investments in associated companies
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Segment liabilities
|
|
Note 26 – Segment, Customer and Geographic Information (Cont’d)
OPC Israel
|
CPV Group
|
ZIM
|
Others
|
Total
|
||||||||||||||||
$ Thousands
|
||||||||||||||||||||
2021
|
||||||||||||||||||||
Revenue
|
|
|
|
|
|
|||||||||||||||
(Loss)/profit before taxes
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|
||||||||||||
Income tax benefit/(expense)
|
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
(Loss)/profit from continuing operations
|
(
|
)
|
(
|
)
|
|
(
|
)
|
|
||||||||||||
Depreciation and amortization
|
|
|
|
|
|
|||||||||||||||
Financing income
|
(
|
)
|
(
|
)
|
|
(
|
)
|
(
|
)
|
|||||||||||
Financing expenses
|
|
|
|
|
|
|||||||||||||||
Other items:
|
||||||||||||||||||||
Losses related to Qoros
|
|
|
|
|
|
|||||||||||||||
Losses related to ZIM
|
|
|
|
|
|
|||||||||||||||
Share in profit of CPV excluding share of depreciation and |
|
|
|
|
|
|||||||||||||||
Changes in net expenses, not in the ordinary course of |
|
|
||||||||||||||||||
Share of changes in fair value of derivative financial instruments |
|
|
||||||||||||||||||
Share in losses/(profit) of associated companies
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||
Adjusted EBITDA
|
|
|
|
(
|
)
|
|
||||||||||||||
Segment assets
|
|
|
|
|
|
|||||||||||||||
Investments in associated companies
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Segment liabilities
|
|
|
|
|
|
A. |
Customer and Geographic Information
|
|
2023
|
2022
|
2021
|
|||||||||||||||||||||
Customer
|
Total revenues
|
Percentage of revenues of the Group
|
Total revenues
|
Percentage of revenues of the Group
|
Total revenues
|
Percentage of revenues of the Group
|
||||||||||||||||||
|
||||||||||||||||||||||||
Customer 1
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Customer 2
|
|
|
%
|
|
|
%
|
|
|
%
|
|||||||||||||||
Customer 3
|
|
|
%
|
|
*
|
|
*
|
|
*
|
|
*
|
Note 26 – Segment, Customer and Geographic Information (Cont’d)
Information based on geographic areas
For the year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Israel
|
|
|
|
|||||||||
United States
|
|
|
|
|||||||||
Total revenue
|
|
|
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Israel
|
|
|
||||||
United States
|
|
|
||||||
Others
|
|
|
||||||
Total non-current assets
|
|
|
A. |
Identity of related parties:
|
Note 27 – Related-party Information (Cont’d)
B. |
Transactions with directors and officers (Kenon's directors and officers):
|
Key management personnel compensation
|
For the year ended December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Short-term benefits
|
|
|
||||||
Share-based payments
|
|
|
||||||
|
|
C. |
Transactions with related parties (including associates):
|
For the year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Sale of electricity and revenues from provision of services
|
|
|
|
|||||||||
Cost of sales
|
(
|
)
|
(
|
)
|
|
|||||||
Dividend received from associate
|
|
|
|
|||||||||
Other expenses/(income), net
|
|
|
(
|
)
|
||||||||
Financing (income)/expenses, net
|
(
|
)
|
|
|
D. |
Balances with related parties (including associates):
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
Other related parties *
|
||||||||
$ Thousands
|
||||||||
Cash and cash equivalent
|
|
|
||||||
Short-term deposits and restricted cash
|
|
|
||||||
Trade receivables and other receivables
|
|
|
||||||
Other payables
|
(
|
)
|
(
|
)
|
||||
Loans and Other Liabilities
|
||||||||
In US dollar or linked thereto
|
(
|
)
|
(
|
)
|
* IC, Israel Chemicals Ltd (“ICL”), Oil Refineries Ltd (“Bazan”).
|
These balances relate to amounts with entities that are related to Kenon's beneficial owners.
|
E. |
For further investment by Kenon into OPC, see Note 11.A.7 and 11.A.8.
|
A. |
General
|
B. |
Credit risk
|
(1) |
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as of year end was:
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Carrying amount
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Short-term and long-term deposits and restricted cash
|
|
|
||||||
Trade receivables and other assets
|
|
|
||||||
Short-term and long-term derivative instruments
|
|
|
||||||
Other investments
|
|
|
||||||
|
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Israel
|
|
|
||||||
United States
|
|
|
||||||
|
|
(2) |
Aging of debts
|
As at December 31
|
||||||||
2023
|
2022
|
|||||||
$ Thousands
|
||||||||
Not past due nor impaired
|
|
|
ECL on other investments
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
$ Thousands
|
||||||||||||
Balance as at 1 January
|
|
|
|
|||||||||
Impairment loss on debt securities at FVOCI
|
|
|
|
|||||||||
Balance as at 31 December
|
|
|
|
C. |
Liquidity risk
|
As at December 31, 2023
|
||||||||||||||||||||||||
Book value
|
Projected cash flows
|
Up to 1 year
|
1-2 years
|
2-5 years
|
More than 5 years
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Trade payables
|
|
|
|
|
|
|
||||||||||||||||||
Other current liabilities
|
|
|
|
|
|
|
||||||||||||||||||
Lease liabilities including interest payable *
|
|
|
|
|
|
|
||||||||||||||||||
Debentures (including interest payable) *
|
|
|
|
|
|
|
||||||||||||||||||
Loans from banks and others including interest *
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
* Includes current portion of long-term liabilities.
|
As at December 31, 2022
|
||||||||||||||||||||||||
Book value
|
Projected cash flows
|
Up to 1 year
|
1-2 years
|
2-5 years
|
More than 5 years
|
|||||||||||||||||||
$ Thousands
|
||||||||||||||||||||||||
Non-derivative financial liabilities
|
||||||||||||||||||||||||
Trade payables
|
|
|
|
|
|
|
||||||||||||||||||
Other current liabilities
|
|
|
|
|
|
|
||||||||||||||||||
Lease liabilities including interest payable *
|
|
|
|
|
|
|
||||||||||||||||||
Debentures (including interest payable) *
|
|
|
|
|
|
|
||||||||||||||||||
Loans from banks and others including interest *
|
|
|
|
|
|
|
||||||||||||||||||
|
|
|
|
|
|
* |
Includes current portion of long-term liabilities.
|
D. |
Market risks
|
(1) |
CPI and foreign currency risk
|
As at December 31, 2023
|
|||||||||||||||||||
Currency/
linkage receivable |
Currency/
linkage payable |
Amount
receivable |
Amount
payable |
Expiration
dates |
Fair value
|
||||||||||||||
$ Thousands
|
|||||||||||||||||||
Forward contracts on exchange rates
|
|
|
|
( |
)
|
As at December 31, 2023
|
|||||||||||||||||||
Currency/
linkage receivable |
Currency/
linkage payable |
Amount
receivable |
Amount
payable |
Expiration
dates |
Fair value
|
||||||||||||||
$ Thousands
|
|||||||||||||||||||
Forward contracts on exchange rates
|
|
|
|
As at December 31, 2022
|
|||||||||||||||||||
Currency/
linkage receivable |
Currency/
linkage payable |
Amount
receivable |
Amount
payable |
Expiration
dates |
Fair value
|
||||||||||||||
$ Thousands
|
|||||||||||||||||||
Forward contracts on exchange rates
|
|
|
|
a. |
Breakdown of CPI-linked derivative instruments
The Group’s exposure to index risk with respect to derivative instruments used for hedging purposes is shown below:
|
As at December 31, 2023
|
|||||||||||||||||
Index receivable
|
Interest payable
|
Expiration date
|
Amount of linked principal
|
Fair value
|
|||||||||||||
$ Thousands
|
|||||||||||||||||
CPI-linked derivative instruments
|
|||||||||||||||||
Interest exchange contract
|
|
|
%
|
|
|
|
As at December 31, 2022
|
|||||||||||||||||
Index receivable
|
Interest payable
|
Expiration date
|
Amount of linked principal
|
Fair value
|
|||||||||||||
$ Thousands
|
|||||||||||||||||
CPI-linked derivative instruments
|
|||||||||||||||||
Interest exchange contract
|
|
|
%
|
|
|
|
b. |
Exposure to CPI and foreign currency risks
The Group’s exposure to CPI and foreign currency risk, based on nominal amounts, is as follows:
|
As at December 31, 2023
|
||||||||||||
Foreign currency
|
||||||||||||
Shekel
|
||||||||||||
Unlinked
|
CPI linked
|
Other
|
||||||||||
Non-derivative instruments
|
||||||||||||
Cash and cash equivalents
|
|
|
|
|||||||||
Short-term deposits and restricted cash
|
|
|
|
|||||||||
Trade receivables
|
|
|
|
|||||||||
Other current assets
|
|
|
|
|||||||||
Total financial assets
|
|
|
|
|||||||||
Trade payables
|
|
|
|
|||||||||
Other current liabilities
|
|
|
|
|||||||||
Loans from banks and others and debentures
|
|
|
|
|||||||||
Total financial liabilities
|
|
|
|
|||||||||
Total non-derivative financial instruments, net
|
(
|
)
|
(
|
)
|
|
|||||||
Derivative instruments
|
|
|
|
|||||||||
Net exposure
|
(
|
)
|
(
|
)
|
|
As at December 31, 2022
|
||||||||||||
Foreign currency
|
||||||||||||
Shekel
|
||||||||||||
Unlinked
|
CPI linked
|
Other
|
||||||||||
Non-derivative instruments
|
||||||||||||
Cash and cash equivalents
|
||||||||||||
Short-term deposits and restricted cash
|
||||||||||||
Trade receivables
|
||||||||||||
Other current assets
|
||||||||||||
Long-term deposits and restricted cash
|
||||||||||||
Total financial assets
|
||||||||||||
Trade payables
|
||||||||||||
Other current liabilities
|
||||||||||||
Loans from banks and others and debentures
|
||||||||||||
Total financial liabilities
|
||||||||||||
Total non-derivative financial instruments, net
|
( |
)
|
( |
)
|
( |
)
|
||||||
Derivative instruments
|
|
|||||||||||
Net exposure
|
( |
)
|
( |
)
|
( |
)
|
c. |
Sensitivity analysis
|
As at December 31, 2023
|
||||||||||||||||
10% increase
|
5% increase
|
5% decrease
|
10% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
Shekel/dollar
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Shekel/EUR
|
|
|
(
|
)
|
(
|
)
|
||||||||||
dollar/EUR
|
(
|
)
|
(
|
)
|
|
|
||||||||||
As at December 31, 2023
|
||||||||||||||||
2% increase
|
1% increase
|
1% decrease
|
2% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
CPI
|
(
|
)
|
(
|
)
|
|
|
||||||||||
As at December 31, 2022
|
||||||||||||||||
10% increase
|
5% increase
|
5% decrease
|
10% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
Shekel/dollar
|
(
|
)
|
(
|
)
|
|
|
||||||||||
Shekel/EUR
|
(
|
)
|
(
|
)
|
|
|
||||||||||
As at December 31, 2022
|
||||||||||||||||
2% increase
|
1% increase
|
1% decrease
|
2% decrease
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Non-derivative instruments
|
||||||||||||||||
CPI
|
(
|
)
|
(
|
)
|
|
|
(2) |
Interest rate risk
|
As at December 31,
|
||||||||
2023
|
2022
|
|||||||
Carrying amount
|
||||||||
$ Thousands
|
||||||||
Fixed rate instruments
|
||||||||
Financial assets
|
|
|
||||||
Financial liabilities
|
(
|
)
|
(
|
)
|
||||
(
|
) |
(
|
)
|
|||||
Variable rate instruments
|
||||||||
Financial assets
|
|
|
||||||
Financial liabilities
|
(
|
)
|
(
|
)
|
||||
(
|
)
|
(
|
)
|
As at December 31, 2023
|
||||||||
100bp increase
|
100 bp decrease
|
|||||||
$ Thousands
|
||||||||
Variable rate instruments
|
(
|
)
|
|
As at December 31, 2022
|
||||||||
100bp increase
|
100 bp decrease
|
|||||||
$ Thousands
|
||||||||
Variable rate instruments
|
(
|
)
|
|
As at December 31, 2023
|
||||||||||||||||
1.5% decrease
|
1.0% decrease
|
1.0% increase
|
1.5% increase
|
|||||||||||||
$ Thousands
|
||||||||||||||||
Long-term loans (SOFR)
|
(
|
)
|
(
|
)
|
|
|
||||||||||
Interest rate swaps (SOFR)
|
|
|
(
|
)
|
(
|
)
|
As at December 31, 2023
|
|||||||||||||||||
Linkage
receivable
|
Interest
rate
|
Expiration
date
|
Amount of the linked reserve
|
Fair value
|
|||||||||||||
$ Thousands
|
|||||||||||||||||
Interest rate swaps
|
USD SOFR interest
|
|
%
|
|
|
|
E. |
Fair value
|
(1) |
Fair value compared with carrying value
The Group’s financial instruments include mainly non-derivative assets, such as: cash and cash equivalents, investments, deposits and short-term loans, receivables and debit balances, investments and long-term receivables; non-derivative liabilities: such as: short-term credit, payables and credit balances, long-term loans, finance leases and other liabilities; as well as derivative financial instruments. In addition, fair value disclosure of lease liabilities is not required.
Due to their nature, the fair value of the financial instruments included in the Group’s working capital is generally identical or approximates the book value.
The following table shows in detail the carrying amount and the fair value of financial instrument groups presented in the financial statements not in accordance with their fair value.
|
As at December 31, 2023
|
||||||||
Carrying amount
|
Fair value
|
|||||||
Liabilities
|
$ Thousands
|
|||||||
Non-convertible debentures
|
|
|
||||||
Long-term loans from banks and others (excluding interest)
|
|
|
||||||
Loans from non-controlling interests
|
|
|
As at December 31, 2022
|
||||||||
Carrying amount
|
Fair value
|
|||||||
Liabilities
|
$ Thousands
|
|||||||
Non-convertible debentures
|
|
|
||||||
Long-term loans from banks and others (excluding interest)
|
|
|
||||||
Loans from non-controlling interests
|
|
|
(2) |
Hierarchy of fair value
The following table presents an analysis of the financial instruments measured at fair value, using an evaluation method.
The various levels were defined as follows:
– Level 1: Quoted prices (not adjusted) in an active market for identical instruments.
– Level 2: Observed data, direct or indirect, not included in Level 1 above.
– Level 3: Data not based on observed market data.
|
(3) | Data and measurement of the fair value of financial instruments at Level 2 and 3 |
Type
|
Valuation technique
|
Significant unobservable data
|
Inter-relationship between significant unobservable inputs and fair value measurement
|
Long-term investment (Qoros)
|
|
|
|
1. |
Kenon
|
2. |
OPC
|
Kenon Holdings Ltd. By: /s/ Robert L. Rosen Name:Robert L. Rosen Title: Chief Executive Officer |
ITEM 19. | Exhibits |
Exhibit Number | Description of Document | |
1.1* | ||
2.1 | ||
2.2 | ||
2.3 | ||
4.1 | ||
4.2 | ||
4.4 | ||
101.INS* | Inline XBRL Instance Document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104* | Inline XBRL for the cover page of this Annual Report on Form 20-F, included in the Exhibit 101 Inline XBRL Document Set. |
_______________________________
* | Filed herewith. |
(1) | Portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act. Omitted information has been filed separately with the SEC. |
223