Electricity Tariff Update

Electricity sector reform and structural change 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 Authority 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 on it's current activities. Source: IEC's Financial Statements for 2022FY and for 9M.2023 Investor Relations 17

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