Israel Electric Financial and Sector Reform Update
The Sector Reform
Main points of the reform)¹(
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
Strengthening the
financial stability of IEC
Source: IEC's Financial Statements for 2021FY
00
Compliance with
financial targets
Assets arrangement
Construction &
operation of two
combined cycle gas
turbines at the 'Orot
Rabin' site)2(
Notes:
1.
2.
In accordance with the IEC's undertakings adopted by the IEC's BOD on May 10, 2018, to the extent that the Government resolutions and/or the legislative amendments and/or the administrative decisions and/or the arrangements of the Electricity Authority
and/or the aforesaid licenses given by the State of Israel, that will correspond to the (insofar as these are needed according to the State of Israel position), or that the collective agreement IEC and the employees representatives will not be in force, then all IEC's
undertakings, according to the IEC's undertaking document, will not be in force and the State of Israel will not be able to file claims and/or complain against IEC with respect to those undertakings. On June 3, 2018, the required Government Decision was received,
on July 19, 2018 the Knesset approved the Amendment to the Law, and on May 17, 2018, the Principles of the policy of the Minister and the Electricity Authority's Regulation as aforesaid were published. In addition, on November 4, 2018, the Collective
Agreement came into effect after all the contingent conditions detailed therein were fulfilled. For the purpose of implementing the full structural change outline, it will be required the approval of the regulatory agencies, decisions and regulations of the
Electricity Authority and granting licenses which, as of this date, have not yet been received and there is no certainty regarding the date of determining the agreements or the granting of such licenses and their final terms. As of this date, IEC is unable to reliable
estimate the exact implications of the additional regulations and approvals that have not yet been formulated or received on its financial position and results.
Except of the above, IEC or its generation subsidiary will not construct, replace, operate, plan, strengthen or engage in development of power stations in Israel, whether by itself or as a contractor for a third party, nor will it engage in electricity generation,
including in the framework of micro-generation or renewable energies in Israel, during the years of the reform and afterwards. IEC has undertaken to the State of Israel not to act to obtain new generation licenses or to construct new electricity generation
stations and replace existing stations, and not to act to obtain permits for the operation of power stations for other parties in Israel.
Investor Relations
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