#1Investor Presentation AN חברת החשמל Israel Electric Israel Electric Corp. Business update as of 09/30/2023 December 2023#2Disclaimer חברת החשמל Israel Electric The Company is a public company, with all it entails, and this information provided to you, all or part of it, may constitute "Inside Information" in accordance with Israel's Securities Law, 1968 (hereinafter: "Securities Law"), and making use of this information (including, but not only, by way of carrying out a transaction in a security of IEC, and/or delivering this information, or an opinion regarding a security of IEC, to any third party who may use this information for purposes of such transaction) may constitute a criminal offence pursuant to Securities Law. Please treat this information as CONFIDENTIAL and do not disclose, publish or deliver all or any part of this information, directly or indirectly, to any third party, except for your employees, officers and any person acting for you or on your behalf, strictly on a "need to know" basis, and only after you have notified the person receiving any of this information that the information is confidential and that making use of this information may constitute a criminal offence as specified above This Presentation does not constitute or form part of and should not be construed as an offer to sell or issue, or the solicitation of an offer to buy or acquire, securities of the Company. This Presentation is solely for informational purposes. The information contained in this presentation regarding the Company's operations is concise and presented for convenience purposes only. To get a complete picture of the Company's operations, please refer to the immediate and timely reports of the Company to the Israeli Securities authority and the Tel-Aviv Stock Exchange. This presentation includes forward-looking information, as per its definition in the Securities Law, including forecasts and other information whose realization is uncertain and depends on factors that are not under the control of the Company. These factors are based, among other things, on data that is in the possession of the Company as of this date, internal estimates and expectations of the Company regarding trends in the Company's fields of activity and regarding the implementation of the company's plans. The Company's forecast and expectations included in this presentation may not be realized, in whole or in part, or may be realized in a different manner than expected, inter alia due to factors that some of them are not under the control of the Company, including changes in the market conditions and the Company's business environment, regulatory changes, or the realization of any of the risk factors of the Company. The information contained in this presentation is provided as of the date of this presentation. The Company is not under any obligation to update the information in this presentation or to update the forward-looking statements contained in it. Investor Relations 2#3"Iron Swords" war חברת החשמל Israel Electric ■ Stopping electricity supply to the Gaza Strip according to the Minister of Energy's order (No significant impact is expected on the company's). ■ Use of NIS 1 billion from the company's safety cushion according to the BOD's approval, required for the company's functional continuity and for purchase and storage of fuels to be used by all electricity producers in the market. ■ Coal and diesel oil storage for emergency needs of the Israeli Electricity sector. International rating agency Moody's places IEC's Baa1 ratings on review for downgrade. ■ Decrease in consumers collection - complete cessation of producing and printing invoices for a period of three weeks due to the damage caused to "Beery Print" located at the Beery Kibbutz near the Gaza strip border. Delaying the collection procedures for all debtors across the country and not issuing invoices to residents who were evacuated from their homes. An increase in customer debts amounting to hundreds of millions of NIS, which are expected to be collected in the following periods. Delay and stoppage of projects due to the security situation in the country - postponement of the commercial operation of units 70/80 at the Orot Rabin power plant. Postponement of conversion project of coal-fired units to natural gas. Postponement of the electrification dates of projects in the transmission system, delays in the construction expansion projects of substations and renovations in power plants. ■ Publication of a hearing by the Electricity Authority for regarding the use of the surplus from the sale of Eshkol power plant to finance the war expenses. Extending the term of office of 5 directors whose term has ended for several months as part of a temporary order to enable the normal activity of the company's board of directors. Source: IEC's Financial Statements for 9M.2023 Investor Relations 3#4Agenda 1 Executive Summary 2 Operational Overview 3 Main events during 9M.2023 4 50 Israeli Electricity Sector Financial Overview 6 Sustainability Overview 7 Appendices Investor Relations 4 חברת החשמל Israel Electric#55 חברת החשמל Israel Electric Executive Summary#6Israel Electric Corp. at a Glance חברת החשמל ■ Established in 1923, 99 years of operation, the Israel Electric Corporation Limited ("IEC") is a dominant player in the Israeli electricity sector and is an essential service provider of electricity in Israel, and the sole vertically integrated provider in the electricity chain. ■ The state of Israel, which holds 99.85% of the IEC's shares, is committed for the GHG reduction in line with Paris Climate Agreement. ■ IEC serves residential, commercial, agricultural and industrial customers throughout the State of Israel, including East Jerusalem and the Palestinian Authority (PA). IEC's goal is to maintain its position as the leading business in the Israeli electricity sector. The Company aims to be Israel's leading electricity provider, an efficient and advanced electricity producer, and one of the world's leading and most advanced grid infrastructure companies Israel Electric IEC Power Grid s 400 kV lines 161 kV lines Steam (dual purpose) Gas turbine (internal combustion) / Combined-cycle (internal combustion and steam) Investor Relations 6#7Key Strategic Targets Main Israel's Electricity Company חברת החשמל Israel Electric Continuing to guarantee and improve reliability of the electricity supply, as well as providing backup services for electricity consumers and producers. Adapt to challenges Completing the remaining steps of the sector reform along with preparing for challenges in the evolving electricity market. Financial Robustness Meeting key financial targets and adequate liquidity cushion. Support environmental projects Support the combination of renewable energy, electrical cars, Promoting energy storage facilities. Targeting natural gas as main fuel source in order to reduce the environmental impact. IEC intends to continue to develop and adapt to the changing market structure and conditions as well as to the economic, social and technological changes in Israel and worldwide Investor Relations 7#8Key Financial Highlights - 9M.2023 חברת החשמל Israel Electric Revenues CAPEX Net Financial Debt (1) EBITDA (2) NIS 19.4 billion $5.3 NIS 4.6 billion $1.3 NIS 37.9 billion $10.4 NIS 5.1 billion $1.4 Credit Ratings IEC Global Baa1 Review for downgrade (Moody's) BBB+ Stable (S&P) IEC Local Aa1.il Stable (Midroog) ilAAA Stable (Maalot S&P) Source: IEC's Financial Statements for 9M.2023 1. 2. Net financial debt is a non-GAAP measure that is defined as credit from banks and other credit providers, plus total long-term debt (including debentures, long-term liabilities to banks, including hedge transactions, liabilities to the State of Israel), leases liabilities and CPI linkage differentials regulatory deferral account, cash and cash equivalents, short-term investments, long and short term receivables in respect of forward contracts and swap transactions, and long-term deposits to secure swap transactions. IEC defines "EBITDA" as a Normalized EBITDA - profit (loss) before income taxes, financial expenses, depreciation and amortization, including movement in regulatory deferral accounts, while neutralizing special non-current events Financial Figures presented in USD according to an average USD/NIS exchange rate of 3.64 as of 9M.2023 Investor Relations 8#9Key Investment Highlights Government Company 99.85% owned by the State of Israel IEC's credit quality is supported by its critical role in Israel's electricity ecosystem Essential Service Provider IEC is an essential service provider of electricity in Israel and the sole vertically integrated provider in the electricity chain Fully Regulated across all segments Electricity Tariff set by the EA, based on forecasted expenses and return on equity, providing predictable revenue to the company Natural Gas Fuel Independence Natural gas from Tamar, Leviathan and other significant natural gas discoveries in Israel have paved the way towards potential fuel independence Investor Relations 9 חברת החשמל Israel Electric#10Key Investment Highlights - cont. Focusing in the T&D segments IEC will focus its activity in the Transmission and Distribution segments and will reduce its share in the generation segment Preparing the ground for renewables חברת החשמל Israel Electric Stable CAPEX in the T&D segments during the coming years in order to enable renewable energy absorption and to achieve the 2030 Ministry of Energy target on renewables Growing attention to ESG aspects Especially in the environmental aspect (conversion of coal units to natural gas), the social aspect (diversity & inclusion) and the governance aspect (deepening corporate governance) Committed to Deleveraging Board and management are committed to deleveraging and are aiming to gradually decrease the ratio of total debt to total assets to 65% by 2025 Investor Relations 10#11Key Financial Targets until end of reform in 2025 Ratios Real net financial debt ratio to normalized EBITDA Total debt to total assets ratio (leverage) International rating Real net financial debt Liquidity (safety cushion) 2023 Targets till 2025 4.3 Mid-target of 5.4 in 2023 65% At least 'BBB' Maximum NIS 36.5 billion 2025 - Maximum NIS 31 billion Subject to meet the financial targets listed above regarding debt ratios Minimum NIS 3 billion Composed of balance of cash and short-term deposits will be no less than NIS 1 billion and unused secured credit lines valid for a period exceeding one year up to NIS 2 billion (On October 12, the Company's BOD authorized to use an amount of NIS 1 billion from the Safety Cushion in order to maintain the Company's functional continuity and for fuel purchase) חברת החשמל Israel Electric Actual as of 09/30/2023 5.9 66% +BBB NIS 37.9 billion The Company complies with the objective Source: IEC's Financial Statements for 9M.2023 Note: The financial targets approved by the Board of Directors On December 13-15, 2022 until the end of the reform period by the year 2025. Mid-targets for 2023 have been updated, among other things, due to the publication of a new tariff base for the generation segment and due to the annual update for 2023, which includes the deployment of consumer debt to the company for the impact of coal prices over three years and the decrease in the return rate in the generation segment Investor Relations 11#12GCA Financial Targets for Government Companies חברת החשמל Israel Electric Ratios Targets Actual as of 09/30/2023 FFO (1) to adjusted financial debt ratio Short term 11% to 18% 9.8% Long term 15% to 23% FFO(1) plus interest to interest ratio Greater than 3 4.93 Return on capital employed (ROCE) ratio (2) 3.3% in 2023(3) 2.9% Source: IEC's Financial Statements for 9M.2023 and a letter regarding the financial targets for Government Companies, circulated by the GCA on November 17, 2021 and approved by the IEC's Board of Directors. FFO is based on calculation of the EBITDA before normalization while neutralizing the change in liabilities with respect to employee benefits (from cash flow report) and other expenses (revenues), net, less interest and taxes paid (from cash flow report) 1. 2. 3. As part of the calculation of the EBITDA for the four quarters and the ROCE ratio, events originating from the activity of the Company for the entire year of 2022 and following the publication of the annual update on 12.26.22 were neutralized Mid-target of ROCE ratio for 2023 have been updated due to the publication of a new tariff base for the generation segment and due to the annual update for 2023, which includes the deployment of consumer debt to the company for the impact of coal prices over three years and the decrease in the return rate in the generation segment Investor Relations 12#1313 חברת החשמל Israel Electric Main events during 9M.2023#14Progress in implementation of the electricity sector reform and structural change Selling generation sites ■ Reading site חברת החשמל Israel Electric On September 13, 2023, the Minister of Energy and Infrastructures approved the recommendation of the team established to examine alternatives for the Reading site (led by the general manager of the Ministry of Energy and Infrastructure), which states that the sale of the site should be promoted as soon as possible for the purpose of establishing temporary generation units through the private sector during the interim period. As well, the team recommended to renovate the existing units in Reading by the company up to a total investment of NIS 50-100 million. Until July 2024, the alternative of the temporary units will be examined regularly, and as soon as there is sufficient certainty for the statutory promotion of this alternative, the renovation of the units will be stopped. The team also recommended a transmission alternative for Reading and the establishment of distributed generation in the Tel-Aviv metropolitan (Gush Dan). ■ Eshkol site The Electricity Authority extended the generation licenses of Eshkol site until June 3, 2024. On October 31, 2023, one offer was submitted by Eshkol Power Energies Ltd as part of an new competitive procedure between the bidders who submitted offers in the original tender for the purchase of Eshkol site. On November 9, 2023, the IEC's BOD approved the announcement of the Tenders Committee of the company on the winning of Eshkol Power Energies Ltd amounts to a total of appx. NIS 9 billion. Source: IEC's Financial Statements for 9M.2023 Investor Relations 14#15Progress in implementation of the electricity sector reform and structural change - cont. חברת החשמל Israel Electric Construction of new CCGT units 70-80 at Orot Rabin site Due to the "Iron Swords" war and the evacuation of GE workers and its subcontractors from the country, the commercial operation date of unit 70 will be postponed to a new date, at least 4 months after the return of all required foreign experts to Israel, and not before May 2024. There is no expected date of the commercial operation of Unit 80. On August 11, 2023, the first ignition of unit 70 was carried out in preparation for synchronizing the unit to the electricity grid. As of September 30, 2023, a total of NIS 3.9 billion was invested in the establishment of the two new CCGT units in Orot Rabin. Converting coal units to NG usage " On May 18, 2023, the company's BOD decided to continue the conversion project of units 1-2 in Rotenberg site only, and to suspend the conversion of units 5-6 in Orot Rabin site. On June 2023, the company's BOD decided to continue the procurement process for converting units 3-4 in Rotenberg site. On August 9, 2023, a gas fire was ignited in Unit 1 in Rotenberg site as part of the system operation tests, prior to the completion of the conversion process. Unit 1 will not complete the conversion operation at the expected date following the stop of the work on the site and the failure to reach the supplier's experts to Israel. Compellation date of the conversion project cannot be estimated. The Company is in ongoing discussions with the Ministry of Energy and the Electricity Authority to fully complete the project. The Company Management's estimate is that after exhausting the discussions with all the authorized State Authorities, the chances of executing the conversion in full (i.e. to all the 6 coal-fired units in the project) outweigh the chances that the conversion will not be executed in full, and the chances of recognizing the full cost of the project outweigh the chances that these will not be recognized. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 15#16Progress in implementation of the electricity sector reform and structural change - cont. Request to close "Netiv Haor" subsidiary חברת החשמל Israel Electric On August 7, 2023, IEC informed the governmental companies authority that Netiv Haor's liquidation process is expected to take a long time and there is great doubt as to whether it will be possible to complete this process by the time of the commercial operation of unit 70. In light of the short timetables until operation of the units, the Company intends to act to continue the operation of the Netiv Ha'Or Company by supplanting the powers or until the appointment of Directors in this company, whichever comes first, including, for the approval of the parent-subsidiary agreements and the submission of the application to the Electricity Authority for receiving the generation license in the name Netiv Ha'Or. IEC is working continuously with the GCA to find additional alternatives that will enable the operation of units 70-80 on time. The company has pledged to the Netiv Haor to support and to enable its operations and obligations in the foreseeable future. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 16#17Progress in implementation of the electricity sector reform and structural change - cont. Investments in the T&D segments חברת החשמל Israel Electric On January 16, 2023, the Minister of Energy determined that the company will maintain its activity in the distribution segment as the holder of an essential service provider license for a period of 20 years. The company has not yet been granted a new license in the transmission segment. On September 21, 2023, the Electricity Authority published a hearing regarding its recommendation to grant the company a new transmission license. The license will replace the parts that refer to the transmission activity in the existing unified license for the company. The license will come into effect after the approval and signature of the Minister of Energy and Infrastructure and will be valid for 20 years. The company continued to increase its investments in the T&D segments and during the first nine months of 2023 invested a total of NIS 3.0 billion in those segments. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 17#18Progress in implementation of the electricity sector reform and structural change - cont. Organizational changes and efficiency program ☐ חברת החשמל Israel Electric From 2018 to September 30, 2023, 1,804 permanent employees retired as part of the reform agreements in parallel with the employment of temporary employees. Competition in the supply segment ☐ On September 7, 2022, the Electricity Authority issued a decision on a market model for generation and storage facilities that regulates the activities of generation facilities in the distribution segment and in particular their possibility of selling electricity directly to suppliers. The quotas for suppliers as determined by the electricity authority will be removed as part of opening the supply market to competition. Renewable energy storage facilities ☐ On January 25, 2023, the electricity authority published a decision which details the principles and volume by which IEC will be allowed to construct storage facilities by 2030, within the area of substations only and subject to receiving a storage license. The decision determines that the company's market share will be 15% of the total storage volume promoted by the private sector, in the previous year, and that in general, the storage deployment will be carried out in accordance with a plan that will be approved by the Noga Company. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 18#19Progress in implementation of the electricity sector reform and structural change - cont. Financial stability ■ חברת החשמל Israel Electric IEC expects that some of the financial stability goals established as part of the reform and some of the goals established in the BOD's decisions may be exceeded, this is in light of: extending the tariff's life of the existing generation units, changes in the capital cost recognition method on both existing generation units and future investments, an increase in investments according to the development plan in the transmission segment for the years 2023-2030, the gas conversion project of coal units at the Rotenberg and Orot Rabin sites, the replacement of meters with smart meters by the end of 2028, the implementation of the wage agreement in the public sector, the accumulated debt of East Jerusalem Electricity Company and the "Iron Swords" war implementations. The Company continues to work with the Electricity Autority and the Ministry of Energy in order to find solutions to finance the scope of the extensive investment activity in the coming years in T&D segments. The Company's management believes that the Company has sufficient funding sources of financing its activities and to repay its obligations in the foreseeable future, and it performs and will continue to perform any action to maintain its financial strength. The Company does not anticipate that failure to meet the financial strength goals, as set forth in the reform, in itself, will have implications for the Company's current activities. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 19#20Additional events חברת החשמל Israel Electric "Kosher Electricity" program ■ On May 7, 2023, the Israeli government approved the first phase of the national plan for energy storage in urban areas. As part of the program, the EA will create the appropriate regulation that will allow the consumption of electricity at a normal rate, in areas where the population requests it. ■ According to the decision, IEC will build a storage facility for the purpose of supply pilot of "kosher electricity" through one facility and will operate to sell the facility and hand over possession of it no later than three years from the day the facility's operation. ■ It was decided to establish an inter-ministerial team to examine the needs for changes required to allow the private sector to provide storage services and in particular Kosher electricity services. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 20 20#21Additional events - cont. Collapse of the crane at Rothenberg site חברת החשמל Israel Electric ■ On May 13, 2023, due to an extreme weather conditions, the crane of the coal pier at the site collapsed, damaging the coal pier and killed 2 people. As a result of the collapse, the bridge was damaged and the ability to unload coal at the pier was disabled. ■ As of April 10, 2023, IEC transports coal using trucks from the Orot Rabin site and also unloads coal at the Port of Ashdod and transports it according to the needs of the Rotenberg site. ■ IEC operates to build a temporary bridge for the purpose of unloading coal at the Rothenberg pier until the end of year 2023, a date which is expected to delay as a result of the "Iron Swords" war. ■ At this stage, it is not possible to assess the full impact of the event on the company's financial condition. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 21 21#22חברת החשמל Israel Electric Operational Overview 22 22#23The IEC Electricity Chain Generation 50 Generation Units in 15 Power Sites Transmission Transformation System Distribution 11 30,113 km Medium Voltage Switching stations Lines 149 Substations 40,955 km Source: IEC Financial Statements for FY2022 Power Lines 806 km 400 kV lines 5,024 km 161 kV line (includes underground lines) 42 km 115 kV lines Low Voltage Lines 53,920 Distribution Transformers Investor Relations 23 23 חברת החשמל Israel Electric Supply 2.7 Million Households 3.0 Million Customers#24Historical Performance (1) Comparison of Key Metrics 12/31/2012 12/31/2022 % Change חברת החשמל Israel Electric IEC Historical CAPEX (3) in the T&D segments (Nis billion) $1.0 Population (2) 3.2 8.0 9.7 21.3% (mn) $0.5 68.4% 1.9 1.9 Number of 2.6 3.0 15.4% Customers (mn) 1.2 Transmission 1.3 network lines 5,338 5,872 10.0% 0.7 (km of circuit) 2012 2022 Distribution network lines (km of circuit) 46,489 71,068 52.9% I Transmission Distribution IEC continues to be the sole vertically integrated electric utility in Israel Source: IEC Financial Statements for FY2011 and for FY2022, IEC Statistical Report for 2011FY and The Electricity Authority - Report on State of Electricity Sector Year of 2021. According to the Israeli Central Bureau of Statistics 1) 2) 3) CAPEX after re-measurements, reform costs and lease Financial Figures denote USD figures at USD/NIS average exchange rate of 3.86 & 3.36 for 2012FY & 2022FY, respectively Investor Relations 24 24#25The IEC Transmission Segment Development plans for 2023-2027 in the transmission segment ■ Addition of appx. 738 circuit km ultra-high voltage transmission lines (400 KV). ■ Establishment of appx. 930 circuit km high voltage transmission lines (161 KV). חברת החשמל Israel Electric Upgrading of appx. 989 circuit km of existing network (high voltage poles) and re-construction of appx. 462 circuit km. ■ Addition of appx. 155 km underground cable circuits. ■ Construction of 3 new switching stations so that by the end of 2025, the total expected capacity in existing and new 400/161 KV switching stations will be 17,695 MVA. ■ As of the end of 2022, the company has at it's disposal 149 substations with total capacity of 19,486 MVA. ☐ By the end of 2025, the total capacity of the substations is expected to reach 24,849 MVA. Source: IEC's Financial reports for 2022FY Investor Relations 25#26The IEC Generation Segment & Fuel Mix ■ Construction of two combined cycle gas turbines (units 70-80) at the 'Orot Rabin' site. ■ Deactivation and Preservation of coal-fired Units 1-4 at 'Orot-Rabin' site in order to guarantee the reliability of electricity supply to consumers. חברת החשמל Israel Electric Fuel Mix by Electricity Generated January 1-September 30, 2023 Natural gas & LNG 61.8% Coal 37.9% ■ Conversion of the remaining 6 coal units to natural gas gradually until 2026 (units 5-6 at 'Orot Rabin' and units 1-4 at 'Rothenberg'). Total generation in the electricity sector is expected to be coal free, based on natural gas and renewable energies no later than year 2026. Diesel oil & Fuel oil 0.3% IEC Generation Facilities (1) January 1 - December 31, 2022 No. of units Installed Capacity (MW) Steam (dual purpose) (coal and fuel oil) (2,3) 10 4,840 Steam (dual-purpose) (natural gas and fuel / diesel oil) 6 1,340 Gas turbine (internal combustion) (industrial gas) 9 914 Natural gas & LNG 56.9% Coal 42.6% Gas turbine (internal combustion) (jet engine) Combined cycle (internal combustion and steam) Total 16 504 9 3,357 50 10,955 Diesel oil & Fuel oil 0.5% Source: IEC's Financial Statements for 2022FY and for 9M.2023 1) As of December 31, 2022 2) 3) Units 1-4 at the Orot Rabin Power Station will be transferred to preservation subject to the following conditions: three natural gas reservoirs in separate infrastructure + start of the first CCGT activation. Please see the decision of the Minister of Energy relative to the preservation of units 1-4 of February 8, 2021 published on the EA website In accordance with the Minister of Energy's policy principles, which was published on the Ministry of Energy's website on November 24,2019, it was decided that units 5-6 at Orot Rabin Power Station and units 1-4 at Rutenberg Power Station will gradually converse using natural gas in order to stop routine coal use until 2025 and no later than 2026. Investor Relations 26#27Natural Gas Overview Firm gas supply from Tamar Field " ☐ A long term Gas Sale and Purchase Agreement (GSPA) was signed on March 2012. On January 24, 2022, an amendment to the agreement was signed with all Tamar partners, following the contractual first price reopening date. חברת החשמל Israel Electric Reduction of the contractual gas price applicable for the Take or Pay (TOP) quantity in a rate that is a few percent higher than the maximum rate of first price re-opener in the GSPA Agreement. According to the GSPA, the gas price for the minimum charged amount is linked to the US CPI. Few restrictions for the US CPI indexation have been set in the amendment. ■ The parties' entitlement was maintained for another re-opener date for the minimum amount (in the range of up to 10% supplement or reduction) on December 31, 2024 (instead of the re-opener date set in the GSPA agreement - July 1, 2024). ■ The agreement term was extended for another 2.5 years until December 31, 2030. ■ Commitment to purchase additional 16 BCM according to the Company's actual operational needs. ■ The company will undertake to order a minimum daily quantity on an operational basis during the agreement period. Price of gas for the operational quantity and for any additional quantity up to the maximal daily quantity but in excess of the minimal annual quantity (Take or Pay), will be slightly lower than $ 4 per MMBTU without indexation. ■ The amendment to the Tamar agreement entered into force on July 22, 2022 after the fulfillment of all the precedent conditions. The accounting between the parties will be executed retroactively as from July 1, 2021. Source: IEC 's Financial Statements for for 2022FY. Investor Relations 27#28Natural Gas Overview - cont. Gas supply from Leviathan Field חברת החשמל Israel Electric On July 4, 2021 an agreement for Spot sale and purchase of natural gas was signed between IEC and the Leviathan partners. The contract period is one year. On June 23, 2022 the contract period was extended for another year. On June 28, 2023, the agreement was extended for an additional year until July 4, 2024. The price of gas will be determined each month. The contract does not include any obligation regarding the purchased quantities (TOP or minimum quantity). Gas supply from Karish Field On March 14, 2022, IEC entered into an agreement with Energean Israel Limited for Spot sale and purchase of natural gas for one year, starting from the date of delivery of gas from the reservoir. On October 29, 2022, the delivery of gas from the reservoir started and the agreement came into force. On October 15, 2023 the agreement was extended for an additional year until October 17, 2024. The price of gas will be determined each month. The contract does not include any obligations regarding the purchased quantities. Sufficient gas supply and predictable prices - stable operational environment Source: IEC's Financial Statements for 9M.2023 and for 2022FY Investor Relations 28#29The Sector Reform Main points of the reform חברת החשמל Israel Electric Organizational change, efficiency plan and administrative flexibility Essential service provider in the transmission and distribution segments Opening the supply segment market to competition from other entities Transfer of the system Management and additional units to a separate Government company Sale of generation sites and increased competition in the generation segment Value added services, installation of smart meters, construction and operation of storage facilities 00 Strengthening the financial stability of IEC Compliance with financial targets Source: IEC's Financial Statements for 2022FY Investor Relations 29 Assets arrangement Construction & operation of two combined cycle gas turbines at the 'Orot Rabin' site#30The Sector Reform Timeline B Gov' Decision on Reform Done site Done Sale of 'Alon Tavor' Sale of 'Ramat Hovav' site חברת החשמל Israel Electric Done In process Sale of 'East Hagit' site Sale of "Eshkol❞ site In discussions Layout for continued operation of Reading site (in accordance with the Arrangements Law) Delay in schedule By the year Submitting a plan in Reading site for :2032 Done two new CCGT, before depositing Done Separation of the System Management & PDT Commercial In process Construction of the first NG fired CCGT H (unit 70) at 'Orot Rabin' site operation (1,2) Commercial operation(1,2) In process Construction of the second NG fired CCGT H (unit 80) at 'Orot Rabin' site In process Transfer of 'Area D' Possession transferring subject to milestones standing in art agreement In process Preparations for a pilot in the supply segment Pilot in the supply segment Preparations for opening the electricity sector to full competition (3) T=0 06/03/18 T=18 12/3/19 T=22 3/31/20 T=30 12/3/20 T=39 T=41 9/1/21 11/1/21 T=48 6/1/22 T=55 01/01/23 T=61 T=64 6/3/23 T=73 T=74 T=77 9/30/23 11/2023 05/23 06/03/24 09/24 Source: IEC's Financial Statements for 9M.2023 1. 2. 3. Commercial operation is the date on which the generation unit successfully passed all the acceptance tests of the System Manager as defined in the criteria published by the Electricity Authority, and the generation license entered into effect. Following the "Iron Sword" War, there may be additional postponement of operating dates The Electricity Authority (EA) is intended to open the electricity sector to full competition at the beginning of 2024 Investor Relations 30 30#31The Israeli Electricity Sector Structure System Administrator Supply Distribution Transmission Generation Capacity 2020 0% 50% 100% חברת החשמל Israel Electric System Administrator Supply 2025* Distribution Transmission Generation Capacity 0% 20% 40% 60% 80% 100% IPP IEC IPP Historical Distributers IEC Historical Distributers I Noga (Former name SMC) In light of reform in the electricity sector, The Noga company was established in order to manage the electricity system in Israel. The share of IEC in the generation segment will be reduced and the supply segment shall be open to competition. IEC will focus its activity in the T & D segments. The transmission activity and most of the distribution activity shall remain in IEC as Essential Service Provider *The Electricity Authority Forecast Source: The Electricity Authority - Reports on State of Electricity Sector for the years 2019-2021. Investor Relations 31#32Energy Storage Energy Storage Capacity (MW) חברת החשמל Israel Electric Moving towards Energy Storage 1,374 150 580 644 305 300 2022 2025* (1) (2) 161 kv lines PV combined with pupmed storage | Pumped storage ■ In 2022, most of the capacity in storage facilities sourced from a pumped storage facilities. By 2025, the capacity in storage facilities is expected to increase significantly mainly due to the entry of new pumped storage facility, the entry of low and high voltage combined storage PV facilities and the entry of storage facilities by IEC. ■ After 2025, a new pumped storage facility with a capacity of 150 MW is expected to operate. ■ According to the EA's hearing from June 2023, 161 kv storage facilities constructed by the private producers are expected to enter with an approximate capacity of 1,000 MW. ■In the coming years, storage in the market model and storage behind the counter is expected to enter. Source: The Electricity Authority - Report on State of Electricity Sector Year of 2022 ⋅ The Electricity Authority Forecast 1) Competitive procedure 2) Promoted by Israel Electric Investor Relations 32#33IEC's Human Capital 12,754 12,371 Streamlining of IEC's Workforce Number of employees A decrease of 2,066 employees (appx. 16%) of IEC's workforce 11,908 11,902 11,476 11,483 11,391 11,103 חברת החשמל Israel Electric (1) 10,716 10,688 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M.2023 As part of the reform in the electricity sector, an efficiency program is resuming for the years 2023-2025 Source: IEC's Financial Statements for 2014FY-2022FY and for 9M.2023 1. From 2018 to September 30, 2023, 1,804 permanent employees retired as part of the reform agreements in parallel with the employment of temporary employees. Investor Relations 33 33#34חברת החשמל Israel Electric Israeli Electricity Sector 34 =4#35The Electricity Tariff חברת החשמל Israel Electric Tariff Structure In accordance with the Electricity Sector Law, the electricity tariff is set by the Electricity Authority (EA) and reformulated from time to time. The outline of the formula is as follows: Recognized costs per segment (e.g. fuel costs, operational costs, depreciation costs and financial costs). Some of the recognized costs are also attributed to funding the reform costs Fair rate of return on equity per segment Electricity Tariff Ongoing Update Actual costs are examined every 2 weeks by the EA (at the time of CPI and fuel prices changes) Discrepancies between forecasted costs and actual cost are reconciled on the earlier of: ■A difference of 3.5%, provided that 3 months have passed since the last update ■ A difference of 5.5% ■The Annual Update Annual Update Once a year, The current year's costs are updated based on forecasts as well as on previous years' reckoning - the gap between the previous year's forecast components and the actual costs of the previous year Source: IEC's Financial Statements for 2022FY Investor Relations 35#36The Electricity Tariff Updates Date of update Update rate 01/01/2023 8.2% חברת החשמל Israel Electric 1 Decision factors Ongoing and increase in the global coal prices Prohibition of the Ministry of Environmental Protection to operate old NG units at Eshkol site, which forced to increase the electricity production in coal, delaying the construction of the new 2 CCGT in Hadera Delay in conversion of coal units to NG in Hadera and Ashkelon Increases at the interest rates and Israeli consumer price index 02/01/2023 1.5% Extension of reduction of the excise tax on coal 04/01/2023 2.4% Reduction in coal prices and their stabilization since the beginning of the year Source: IEC's Financial Statements for 2022FY and for 9M.2023, Electricity Authority's decisions no. 62302 as of 01/24/22, no. 63006 as of 04/12/22, no. 63308 as of 07/27/22, no. 64504 as of 12/21/22, no. 64801 as of 01/26/23 and no. 65203 as of 03/26/23- electricity tariff to IEC's consumers Investor Relations 36#37Update of the generation tariff base חברת החשמל Israel Electric ■ On January 9, 2023, the Electricity Authority published a decision regarding a new rate base for the generation segment that will apply until the end of year 2027. This decision includes reference to recognition of the operating costs, cost of capital, recognized assets, working capital, availability of the generation units, and calculation of the gaps between the recognized cost and actual costs. The change of the method of recognizing assets and extending the life of the generation units, affected the costs of 2022 in a direction opposite to the debt arising from the use of coal. The gaps created in the generation segment in 2022, amounting to approximately NIS 1 billion, were also spread over 3 years. The spread of the 2022 fuel debt offset by the effect of the change in methodology of the generation tariff base in 2022 is approximately NIS 2.8 billion over the years 2023-2025. New tariff base for transmission and distribution segments for the coming years has not yet been published. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 37 37#3838 Financial Overview חברת החשמל Israel Electric#39Financial Highlights Revenues חברת החשמל EBITDA (1) Israel Electric (NIS bn) (NIS bn) $7.0 24.7 $7.0 $6.9 $6.9 $5.4 $5.3 23.8 22.2 23.1 $2.2 $2.2 $2.3 $2.1 $1.9 19.4 17.9 7.9 7.5 7.5 $1.4 6.4 6.9 5.1 2019 2020 2021 2022 9M.2022 9M.2023 2019 2020 2021 2022 9M.2022 9M.2023 Historical Investments by segments (CAPEX) (2) Net Financial Debt (4)/EBITDA $1.7 $1.9 (NIS bn) $1.6 $1.5 5.9 6.0 $1.3 5.9x 5.5 5.5x 5.1 $1.2 4.6 1.8 4.4x 4.3x 1.7 4.0 4.0x 4.1x 1.5 1.9 1.1 1.6 1.4 1.2 1.3 1.3 1.1 1.3 2.9 2.2 2.4 1.8 1.4 1.3 ات 2019(3) 2020 2021 2022 9M.2022 9M.2023 (5) (5) 2019 2020 2021 2022 9M.2022 9M.2023 Assets and Liablities which which wasn't directly callsified Others Distribution Transmission ■Supply System Manager Generation Source: IEC's Financial Statements for 2019FY-2022FY and for 9M.2023 1. 2. 3. 4. 5. IEC defines "EBITDA" as a Normalized EBITDA - profit (loss) before income taxes, financial expenses, depreciation and amortization, including movement in regulatory deferral accounts, while neutralizing special non-current events. CAPEX before re-measurements and reform costs. CAPEX also include non-cash adjustments in 2019 in accordance with IFRS 16 (Leases) in the sum of appx, Nis 1.4 billon. IEC defines "net financial debt" as credit from banks and other credit providers, total long-term debt (including debentures, long-term liabilities to banks, including hedge transactions, lease liabilities, debentures to the State of Israel and liabilities to the state of Israel), less cash and cash equivalents, short-term investments and other receivables (including receivables for forward contracts and swap transactions, MTM and long-term deposits and regulatory deferral account assets with respect to linkage differentials) In annualized terms, calculation based on LTM EBITDA,. Financial Figures denote USD figures at USD/NIS average exchange rate of 3.56, 3.44, 3.23, 3.36, 3.32 and 3.64 for 2019FY, 2020FY, 2021FY, 2022FY, 9M.2022 and 9M.2023, respectively Investor Relations 39#40Historical Cash Flow (NIS bn) $1.9 $1.8 6.5 6.5 6.5 $1.5 6.3 5.6 4.8 5.0 $0.8 $0.7 $0.6 2.8 $0.2 0.6 2.2 $0.4 2.3 $0.2 1.4 0.7 חברת החשמל Israel Electric (0.6) (1.3) ($0.4) (1.2) ($0.2) (2.5) ($0.4) (3.8) ($0.8) (4.5) (4.8) (5.2) ($1.1) ($1.2) ($1.3) (6.3) ($1.6) ($1.8) 2019 2020 2021 2022 9M.2022 9M.2023 Operating activities Investment activities, net (1) Financing activities -•-Total Liquidity Source: IEC's Financial Statements for 2018FY-2022FY and for 9M.2023 1. Investment activities excluding repayment (or deposits) of bank deposits. 2. IEC defines "liquidity" as cash and cash equivalents, short term investments and available credit facilities. Financial Figures denote USD figures at USD/NIS average exchange rate of 3.56, 3.44, 3.23, 3.36, 3.32 and 3.64 for 2019FY, 2020FY, 2021FY, 2022FY, 9M.2022 and 9M.2023, respectively. Investor Relations 40#41Net Financial Debt (1) Over Time Prepared According to Government Companies Regulations IFRS חברת החשמל Israel Electric $13.4 (NIS bn) $13.8 51.7 $13.1 49.9 $11.5 46.9 $11.3 $11.7 44.6 43.2 42.1 $10.7 $10.1 $10.4 38.3 $10.3 $10.0 37.9 36.1 $8.7 34.7 32.4 30.0 (2) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M.2023 Source: IEC's Financial Statements for 2012FY-2022FY and for 9M.2023 1. 2. Net financial debt is a non-GAAP measure that is defined as credit from banks and other credit providers, plus total long-term debt (including debentures, long-term liabilities to banks, including hedge transactions, liabilities to the State of Israel), leases liabilities and CPI linkage differentials regulatory deferral account, less; cash and cash equivalents, short-term investments, long and short term receivables in respect of forward contracts and swap transactions, and long-term deposits to secure swap transactions. As from 01/01/2019, "net financial debt" also includes lease liabilities. Figures denote USD figures at USD/NIS average exchange rate of 3.86, 3.61, 3.58, 3.89, 3.84, 3.60, 3.59, 3.56, 3.44,3.23, 3.36 and 3.64 for 2012FY, 2013FY, 2014FY, 2015FY, 2016FY, 2017FY, 2018FY, 2019FY,2020FY, 2021FY, 2022FY and 9M.2023, respectively. Investor Relations 41#42Consolidated Debt Breakdown as of September 30, 2023 Annual Debt Maturities (Principal in NIS billions)(1) חברת החשמל Israel Electric Profile of International IEC $ Bonds (2) Loans from local and foreign banks Outstanding Maturity 24.4 6.8 Amount ($mn) Coupon Local bonds, private bonds and non-bank loans Nov-24 1,250 5.000% Dec-26 125 7.875% 3.5 3.0 6.6 3.0 Dec-27 300 7.750% 1.4 1.9 24.4 Aug-28 1,000 4.250% 3.0 1.6 Mar-30 40 8.940% 1.6 0.2 Feb-32 500 3.750% 10.2023-9.2024 10.2024-9.2025 10.2025-9.2026 10.2026-9.2027 10.2027 and thereafter Dec-96 125 8.100% Interest Rate Exposure(3) Floating 8.4% Type of Instrument(¹) Debt by Currency (1) Debt by Linkage (1) Local public bonds 49.8% NIS non- USD 32.0% linked Foreign bank loans 1.3% Euro 0.7% Local bank loans 7.1% Fixed 91.6% Private bonds and non-bank loans 41.8% Other 3.5% NIS CPI linked 53.8% NIS 63.9% 10.1% Foreign currency 36.1% Source: 1) IEC immediate report on the Corporate Liabilities Status, IEC Financial data. 2) IEC Financial data and Bloomberg as of December 2023 3) IEC's Financial Statements for 2022FY Investor Relations 42#4343 חברת החשמל Israel Electric Sustainability Overview#44Environment, sustainability and corporate governance (ESG) 1 חברת החשמל Israel Electric חברת החשמל Israel Electric Ethical Aspects of Business Conduct Employee health, Wellbeing and working relations Responsible Supply Chain Environment Corporate Governance Diversity & Inclusion Employee Volunteering IEC earned the highest ranking in the Maala (1) 2022 Index: Platinum* (for the ninth consecutive year) Source: IEC's Corporate Sustainability Report for 2021, Maala's rating for IEC for 2023 1. Maala is the non-profit CSR standards-setting organization in Israel who serves the needs of some 120 members, comprised of Israel's large and mid-size companies, committed to excellence in corporate citizenship. The criteria in the rankings are determined by an independent public committee composed of content experts, academics, heads of social environmental organizations and representatives of the business sector. Investor Relations 44#45State of Israel's Commitments on Climate 100 Action Items Just before COP26, the government released a "100 Action Items" plan to develop technologies aimed at reducing CO2 emissions and preparation for climate change with the cooperation of 14 ministries O המשרד להגנת הסביבה Absolute Targets חברת החשמל Israel Electric • State of Israel's goal is to reduce absolute greenhouse gas emissions: By 27% by 2030, from 2015 levels • By 85% by 2050, from 2015 levels Renewable Power Targets • The Minister of Energy announced to phase-out coal-fired power generation no later than 2026 and determined targets for a renewable power generation share of 20% in 2025 and 30% in 2030. IEC will continue to develop the electricity network system in order to enable renewable energy absorption and to achieve the 2030 target • Israel signed the COP26 pledge to phase-out from coal by 2030 for major economies (2040 for the rest) and end investments in new coal power generation plants الوزارة لحماية البيئة Israel Ministry of Environmental Protection Sectoral Targets for Electricity The electricity/heat sector make up approx. 45% of Israel's total emissions (latest data 2019) • State of Israel has a sectoral target to reduce greenhouse gas emissions from electricity generation (IEC & IPP's): By 30% by 2030, from 2015 levels (37.4 MtCO2eq) By 85% at least by 2050, from 2015 levels (37.4 MtCO2eq) Source: Report of greenhouse gas emissions in Israel - Annual Tracking regarding the implementation of the National Program and Goals to reduce greenhouse gas emissions and the commitment of Israel to the climate trust, The Ministry of Environmental protection May 2021; government decision number 171 dated July 25, 2021 "Transition to low carbon economy"; Emissions report of air pollutants from fuel burning, according to fuel consumer, The Israeli Central Bureau of Statistics Investor Relations 45 45#46IEC has taken significant steps to reduce emissions Nitrogen Oxides NOX Sulfur Dioxide SO2 Gram / KWh produced Gram / KWh produced 2.0 1.5 1.0 0.5 1.32 -52% 0.64 0.0 2015 2022 Carbon Dioxide CO2 800 -8% 667 614 600 400 200 0 2015 2022 Source: IEC Environmental report for the year 2022 Investor Relations 46 46 Gram / KWh produced Gram / KWh produced 2.0 1.5 1.34 -71% 1.0 0.5 0.39 0.0 2015 2022 Particulate Matter PM 0.06 0.046 -40% 0.03 0.028 0.00 2015 2022 חברת החשמל Israel Electric#47Coal Usage Over Time חברת החשמל Israel Electric 14.0 Million Ton % of coal out of Total Electricity Market Fuel Mix 61% 11.8 52% 10.9 10.7 49% 44% 9.1 8.2 8.3 7.8 37% 7.2 32% 6.4 6.3 30% 30% 26% 23% 22% Implementing Government policies ■The State of Israel signed the Paris Agreement in 2016 and has significantly limited the usage of coal for electricity generation ■ An emissions reduction project in the larger coal units was executed at a significant cost of NIS 7.1 billion (1) ■ Government target of Israel is to be "coal free" by 2030. The Israeli Electricity Market will stop routine coal use until 2025 and no later than 2026 following the Israeli Minister of Energy's policy principles on 11/24/2019 ■IEC is financially protected from change in fuel mix by the electricity tariff 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Source: IEC's Financial Statements for 2012FY-2022FY, The Electricity Authority Report on State of Electricity Sector Year of 2022 1) The emissions reduction cost does not include interest during the construction period Investor Relations 47 The Future of Coal ■ The current coal capacity is 4,840 MW of which: 1,440 MW will be mothballed in 2023/24 following the Israeli Minister of Energy decision on 2/8/2021 • 3,400 MW are expected to be converted to NG by the end of 2025 following the Israeli Minister of Energy's policy principles on 11/24/2019#48The Israeli Electricity Sector Fuel Mix Electricity Market Fuel Mix (IEC & IPP) (TWH) חברת החשמל Israel Electric 81.7 76.9 72.5 72.8 74.0 13.9 67.4 68.3 69.6 7.5 3.3 4.2 5.7 65.4 0.2 63.5 61.5 61.5 1.8 1.8 2.0 59.8 1.3 58.4 0.2 1.5 0.9 0.9 2.6 9.3 48.8 22.8 21.0 27.1 10.8 30.4 34.4 41.1 43.2 46.3 46.1 51.0 52.3 65.1 38.7 34.2 35.1 32.1 30.1 29.2 24.2 22.0 20.6 21.9 19.0 16.9 16.7 2.8 2010 2011 2012 2013 2014 Coal 2016 2015 ■Natural Gas ■Diesel Fuel The Israeli Electricity Sector is expected to be "coal free" by 2030 (the target may be preceded to 2025)(1) Source: The Electricity Authority - Report on State of Electricity Sector Year of 2022. * The Electricity Authority Forecast 1. For that matter please see the Minister of Energy's statements and the Ministry of Energy's policy for 2030 regarding the rehabilitation from polluting fuels 2017 2018 Other 2019 2020 Renewable Energy 2021 2022 2025* Investor Relations 48#49Thank you! For questions or additional information, please contact IEC Investor Relations: [email protected] Investor Relations 49 49 חברת החשמל Israel Electric#50Appendices 60 50 חברת החשמל Israel Electric#51Income Statement (NIS millions) (NIS millions) Revenues 12/31/2022 23,105 חברת החשמל For the period: 09/30/2022 Israel Electric 09/30/2023 17,906 19,364 Cost of operating the electricity system Fuels 9,561 7,158 5,927 Purchases of electricity 5,933 4,681 5,624 Operation of the generation system 4,094 3,082 2,725 Operation of the transmission and distribution system and others 2,840 2,130 2,278 Total costs 22,428 17,051 16,554 Profit from operating the electricity system 677 855 Other revenues, net (1,405) (1,390) Sales and marketing expenses 819 603 2,810 (157) 630 Administrative and general expenses 856 630 708 Income from liabilities to pensioners (148) (112) Reform agreement and other agreements results 212 168 (227) 165 Profit from current operations 343 956 1,691 Financial expenses, net 1,356 1,165 1,092 Income (loss) before income taxes (1,013) (209) 599 Expenses (Income) from taxes on income (226) (41) 150 Income (loss) after income taxes (787) (168) 449 Company's share of the profit of asociated companies 2 7 Income (loss) before regulatory deferral accounts (787) (166) 456 Movement in regulatory deferral accounts balances, net of tax 2,561 2,547 1,137 Profit for the period 1,774 2,381 1,593 Profit with respect to cash flow hedging, net of tax 60 23 16 Remeasurement of a defined benefit plan, net of tax 1,693 1,602 1,548 Movement in balances of regulatory deferral accounts balances, ne (181) (208) (84) Comprehensive income for the period 3,346 3,798 3,073 Source: IEC's Financial Statements for 9M 2023 Investor Relations 51#52Balance Sheet (NIS millions) חברת החשמל Israel Electric Assets 12/31/2022 09/30/2022 09/30/2023 Liabilities and Equity 12/31/2022 09/30/2022 09/30/2023 Current assets Current liabilities Cash and cash equivalents 3,654 2,110 817 Credit from banks and other credit providers 5,360 5,467 3,287 Short term investments 459 448 482 Trade payables 3,807 4,490 3,206 Trade receivables for sales of electricity 4,702 5,757 7,049 Other current liabilities 1,365 1,552 1,737 Other current assets 886 1,074 1,499 Customer advances, net of work in progress 834 829 908 Inventory fuel 2,412 2,999 1,181 Provisions 684 671 615 Inventory stores 166 139 190 Total current liabilities 12,050 13,009 9,753 Assets of disposal groups classified as held for sale 1,877 Total current assets 12,279 12,527 13,095 Non-current liabilities Debentures 30,791 28,982 34,076 Liabilities to banks 3,546 3,604 3,377 Liabilities with respect to other benefits after Non-current assets 5,374 5,449 4,631 employment termination Inventory fuel 1,413 1,546 1,284 Deferred taxes, net Long-term receivables 2,111 2,208 1,833 Liability to the State of Israel Investment in associates 13 15 20 Lease liabilities Assets with respect to benefits after 11,000 10,672 13,679 Other liabilities employment termination Fixed assets, net 59,611 59,339 Intangible assets, net 1,153 1,163 59,370 1,137 Total non current liabilities Equity 8,051 8,390 8,789 1,876 1,859 1,923 460 451 488 514 519 508 50,612 49,254 53,792 32,171 32,623 35,244 Total non-current assets 75,301 74,943 77,323 Debit balance of regulatory deferral accounts 11,384 11,159 12,069 Credit balances of regulatory deferral accounts and deferred taxes with respect to regulatory deferral accounts 4,131 3,743 3,698 Total assets and debit balance of regulatory deferral accounts 98,964 98,629 102,487 Total liabilities, equity and credit balance of regulatory deferral accounts 98,964 98,629 102,487 Source: IEC's Financial Statements for 9M.2023 Investor Relations 52 52#53Israel Generation Capacity and Demand Renewable Energy + Pumped-storage hydroelectricity IPPs (1) IPPS Conventional Energy") IEC's Installed Generating Capacity -National Peak Demand חברת החשמל Israel Electric 25,800 (MW) 22,655 21,502 8,400 19,711 18,923 5,100 17,762 17,972 3,956 2,335 2,023 946 1,303 3,334 4,148 14,620 14,600 3,199 14,172 12,746 12,921 13,568 6,600 5,761 5,931 8,700 13,617 13,335 12,752 11,615 11,615 10,955 8,700 2017 2018 2019 2020 2021 2022 2025* Source: IEC's Financial Statements (2017FY-2020FY), The Electricity Authority - Report on State of Electricity Sector Year of 2022. * The Electricity Authority Forecast. The expected IEC's Installed Generating Capacity contains coal units which supposed to undergo a conversion to gas in a total power of 2.8 GW. 1. Installed Generation Capacity of Independent Power Producers ("IPPS") Investor Relations 53#54Demand for Electricity (MW) חברת החשמל Israel Electric National Electricity Peak Demand & Total Electricity Produced in the Entire Sector Trends 14,000 12,000 2.8% Average Annual Growth Rate 10,000 7.6% Average Annual Growth Rate 8,000 6,000 4,000 2,000 1990 1992 (TWh) 75 The demand for electricity in 70 Israel is growing at a fast and steady pace 65 Demand is driven by both 60 population growth and the 77 73 73 74 increase in electricity 64 65 67 68 70 55 consumption per household Multiplied by 3.8 in 32 years 54 54 53 58 60 62 61 50 Noga's demand forecast 45 anticipates an average annual increase of 2.2% in the years 2023 to 2025 40 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Total Electricity Produced in the Sector National Electricity Peak Demand Seasonality in Electricity Demand - Average Consumption of Households (kWh) 1,000 800 600 400 200 0 Q4- Q1- Q2- Q3- Q4- Q1- Q1- Q2- Q3- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 ■Base Heating Cooling Q4- 2021 Q1- Q2- Q3- Q4- 2022 2022 2022 2022 Source: IEC's Annual Financial Statements (1990FY-2022FY), IEC's Statistical data, The Electricity Authority Report on State of Electricity Sector Year of 2022 Investor Relations 54#55The Reform in the Generation Segment (Selected generation sites) חברת החשמל Israel Electric Eilat 92 Haifa 828 Orot Rabin 2,605 Alon Tavor 583 Reading 428 Caesarea 130 Hagit 1,394 Eshkol 1,693 Gezer 1,336 Rothenberg 2,290 Tzafit 583 Hagit: IEC sold units with a capacity of 660 megawatts Ramat Hovav 1,137 Source: IEC 's Financial Statements for 2022FY Investor Relations 55 The numerical figures are in MW - Steam dual purpose: coal and fuel oil Steam dual purpose: natural gas and fuel/ diesel oil - Gas turbine (internal combustion) Combined cycle (internal combustion and steam) A power station planned to be sold during the reform A power station which was sold during the reform#56Sources of Natural Gas in Israeli Waters Investor Relations Block 12 (Aphrodite) Karish Tanin Leviathan Plagik Tamar Ruth Dolphin Dalit Neta & Roie Daniel Shimshon O EPArish As of this date, Tamar, Leviathan & Karish reservoirs are the only active sites Hadera Tel Aviv Avia Kerea Gezer Noa Mari Ashdod Zafit Jerualem Mary B Ashqelon Egypt 10 20 30 40 50 56 Alon Ramat Rotem Hovav Sdom חברת החשמל Israel Electric#57Tariff Comparison to European Countries חברת החשמל Israel Electric (€ cents equivalent) 34.0 Average Price per KWh (1) 2.7 2.3 Serbia Hungary Poland Bulgaria Croatia Slovakia Slovenia Luxembourg 24.3 23.1 23.0 22.9 20.1 18.3 17.4 17.2 15.9 15.3 13.4 13.2 13.1 13.0 12.3 11.9 11.5 10.6 10.0 9.2 9.0 8.5 8.1 6.6 5.5 5.1 Finland France Lithuania Austria Sweden Czechia Germany Portugal Estonia Israel (February 2022) Source: Eurostat, Electricity prices for domestic consumers - bi-annual data, as of H2/2022. Israel rate is based on the last tariff update that does not include VAT (04/01/2023) and converted EUR/NIS exchange rate of 3.93 as of 03/31/2023. 1) Average national price in Euro per kWh without taxes for medium size household consumers (annual consumption between 2,500 and 5,000 kWh). Norway Latvia Romania Spain Cyprus Netherlands Belgium Italy Ireland Denmark Greece Investor Relations