F - 4
F - 5
F - 6
Enlight Renewable Energy Ltd.
F - 7
Exercise of options and conversion of debentures into shares
Increase in ownership rate interest within control
F - 8
F - 9
175,916
F - 10
Profit for the year
F - 11
F - 12
F - 13
Notes to the Financial Statements as of December 31, 2023
The Company is engaged in the initiation, planning, development, construction and operation of projects for the production of electricity from renewable energy sources in Israel, Europe and the United states. In its activities, the Company is engaged, inter alia, in architectural and engineering planning of the aforementioned projects for the production of electricity, in purchasing the components which are required for the construction of those projects, in building the projects, in securing the regulatory permits and licenses which are required for the construction of each project, in the production and sale of electricity to the electric corporation, and in the operation of those facilities, once completed.
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A.
F - 15
B.
F - 16
F - 17
D.
F - 18
Liability in respect of the costs of dismantling and removal of the facility and restoring the site where the facility is located
F - 19
Note 2 - Material Accounting Policies (Cont.)
E.
Deferred costs in respect of projects are costs which were accrued for the development of projects, and for which it is probable that economic benefits will derive to the Company in the future and the costs can be measured reliably. In assessing whether such expenditures can be capitalized, the Company evaluates, among other factors, the likelihood in succeeding to develop a project (i.e. taking into account both physical and regulatory aspects), the progress phase in the development, the Company's experience in the geographic area and with the related regulator, whether there are other obstacles or competitors that might affect the probability to successfully develop etc. The Company assess such likelihood of success in each individual case, If it is probable that the relevant project will be materialized. these costs are capitalized and presented under the item for “deferred costs in respect of projects” in the statement of financial position. If during the process it is no longer probable that the project can be materialized, any related amounts that were previously capitalized are written off (i.e. expensed). Once all the approvals obtained and the project is ready to be constructed on, the related development costs that have been deferred are classified to Fixed assets.
F - 20
F - 21
F - 22
F - 23
The Group holds derivative financial instruments for the purpose of hedging against foreign currency risks, interest rate risks, and electricity price change risk, as well as derivatives which are not used for hedging purposes. For additional details on the derivatives which the Group uses, see Note 26.
The company owns and operates certain projects in the U.S. under tax equity structures to finance the construction of solar projects. Tax equity partnerships are characterised by a tax equity partner, who contributes an upfront payment as part of the initial project investment and generally does not have an operational role in the project. The partner receives a contractually agreed return on the contribution. In order to ‘repay’ the initial contribution and the return, a disproportionate share of the production tax credits (PTCs) or the investment tax credits (ITCs) and other tax attributes (accelerated tax depreciation and other taxable results) are allocated to the partner during the first part of the project's lifetime.
The tax equity structure used in the financial statements is the sale and leaseback transaction (according to IFRS 16). The Company sells eligible solar projects to tax partner and enters into master lease agreements to lease the solar project back for an agreed-upon term. The Company has assessed these arrangements and determined that the transfer of assets should not be accounted for as a sale in accordance with IFRS 15. Therefore, the Company accounts for these transactions using the financing method by recognizing the consideration received as a financing obligation, with the assets subject to the transaction remaining on the balance sheet of the Company and depreciated based on the Company's normal depreciation policy. The aggregate proceeds have been recorded as debt within the consolidated balance sheets. Eligible income tax credits are transferred to the tax partner upon completion of a sale of a solar project. Transfer of tax credits recognized as deferred gain on Company balance sheet. This deferred gain is amortized over time using a straight-line method. Income from amortization is included in other income on our statements of income.
Another structure of Tax Equity is the Flip Point. As of December 31, 2023, the company has no projects that have used this structure.
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The Company, through a subsidiary, has entered into a long-term agreements of providing development and operational management services to projects under development and operational projects owned by third parties for a fixed price. Revenues are recognized on a straight line basis when the performance obligation to provide the service is satisfied throughout the service period.
F - 25
Share-based payments to employees and others who provide similar services are settled with the Group’s equity instruments which are measured at fair value on the grant date. The Group measures, on the grant date, the fair value of the granted equity instruments, using the binomial model (for details regarding the method used to measure the fair value of share-based payments, see Note 18).
In transactions when a subsidiary grants to its employees' rights in the parent Company’s equity instruments, the Group treats the grant as an equity-settled share‑based payment transaction.
F - 26
Contingent consideration as part of a business combination for services to be provided by employees to the company are measured in accordance with IAS19 employee benefits.
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F - 28
F - 29
F - 30
F - 31
F - 32
Enlight Maccabi 2 L.P., Enlight Revivim Ein Gedi L.P., Orsan Energy 3 L.P., A.N. Faran Solar L.P., Enlight Reim Renewable Energy L.P., A.N Mahanim L.P. (altogether hereinafter: "Storage 2")
F - 33
F - 34
F - 35
F - 36
Note 8 - Contract Assets in respect of Concession Arrangements for the Construction and Operation of Photovoltaic Systems
Following the significant change to the terms of the concession arrangement with the state of Israel, which included the execution of significant technological changes to the Halutziot facility in the second quarter of 2022, and the expansion thereof in a manner which is expected to increase the capacity and effectiveness of production, the Company re-evaluated the application of IFRIC 12 (hereinafter: the “Interpretation”), and concluded that the facility no longer falls under the scope of that interpretation. As a result, beginning from the second quarter of 2022, the Halutziot facility will be accounted for as a fixed asset, at cost.
F - 37
F - 38
Presented below is a review of the material projects which are included under wind farms as of the reporting date:
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F - 40
Note 10 - Intangible Assets (Cont.)
For the purpose of impairment testing, goodwill is allocated to the Company’s operations in the United States which represents the lowest level within the Group at which goodwill is monitored for internal management purposes.
Key assumptions used in the calculation of recoverable amounts are discount rates, sponsor cash flows from operating and development projects.
Note 11 - Other Payables
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F - 42
F - 43
Note 12 - Loans from banks and other financial institutions (Cont.)
Index linked loan
F - 44
Charge on the SPV’s assets, cash flow rights, land rights, insurance, collateral from the project contractors, and cross-support between the projects in the cluster, in respect of the debt service. Twelve months after the last COD, a debt sizing test will be carried out. If the debt sizing test does not meet the required ratio, the Company may be required to inject equity in order to reduce debt amount so it meets the debt sizing required ratio.
F - 45
F - 46
Loans from banks and other financial institutions (Cont.)
F - 47
F - 48
As of December 31, 2023, the Company is in compliance with all of the financial covenants in accordance with the trust deed, as stated above.
F - 49
In June 2019, the Company issued, NIS 222,000,000par value of debentures (Series F), with a par value of NIS 1each, with the following main terms:
The ratio of standalone net financial debt to net cap will not exceed 70% during two consecutive financial statements.
F - 50
Note 13 - Debentures (Cont.)
Series D are not linked to any index, have a par value of NIS 1 each, and are repayable in 2 equal payments which will be paid on September 1 2027 and 2029.
The Company’s undertaking to repay the debentures is not secured by any collateral, or any other security.
F - 51
Mostly due to the offsetting of deferred borrowing costs which were prepaid by the project companies on the financial closing dates, and capitalization of finance expenses during the construction period.
Initial creation and index linking vis-à-vis right-of-use asset.
F - 52
F - 53
F - 54
F - 55
F - 56
)
F - 57
F - 58
F - 59
Note 17 - Earnings Per Share
F - 60
F - 61
F - 62
F - 63
F - 64
F - 65
F - 66
Note 25 - Leases
F - 67
F - 68
F - 69
F - 70
F - 71
F - 72
Note 26 - Financial Instruments (Cont.)
Financial risk factors (Cont.)
F - 73
Interest rate risk (Cont.)
F - 74
F - 75
F - 76
F - 77
F - 78
F - 79
December 31
F - 80
F - 81
F - 82
F - 83
F - 84
F - 85
F - 86
F - 87
F - 88
The Company hedges the electricity prices in a CFD (Contract for Difference) format. For 2023 the Company hedged approximately 55% of its electricity production at a weighted average price between EUR 76.09 MWh to EUR 86.63MWh.
For 2024 the Company hedge approximately60% of its forecasted electricity production at a weighted average price of EUR 99.39 MWh.
F - 89
F - 90
F - 91
F - 92
F - 93
F - 94
F - 95
F - 96
F - 97
F - 98
F - 99
F - 100
Note 30 - Events After the End of the Reporting Period (Cont.)