Q3 2023 Enlight Renewable Energy Ltd Earnings Call

Yes.

Speaker 1: Good day and thank you for standing by. Welcome to the Enlight Q3 2023 earnings call and webcast.

Good day and thank you for standing by welcome to the in like Q3, 'twenty to 'twenty three earnings call and webcast.

Speaker 1: At this time all participants are in a listen-only mode. After the speaker's presentation there'll be a question and answer session. To ask a question during the session you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised.

At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one on one on your telephone.

Doesn't have an automated message advising Johan does raise to withdraw your question. Please press star one on one again please be advised that today's conference is being recorded I would now like turn the conference over to your Speaker. Today, you guys have left that V. P of.

Speaker 1: withdraw your question please press star 1 and 1 again. Please be advised that today's conference has been recorded. I would now like to hand the conference over to your speaker today, Josef Leskowicz, VP of M&A and Corporate Finance. Please go.

Hey, corporate finance. Please go ahead.

Speaker 2: Thank you, operator. Good morning, everyone. And thank you for joining our 3rd quarter 2023 earnings conference call for end light renewable energy.

Thank you operator, good morning, everyone and thank you for joining our third quarter 2023 earnings conference call for M might renewable energy before.

Speaker 2: Before beginning this call, I would like to draw participants' attention to the following.

Before beginning this call I would like to draw participants attention to the following certain statements made on the call today, including but not limited to statements regarding business strategies and plans our project portfolio market opportunity and potential growth discussions with commercial counterparties and financing sources progress of company projects, including anticipated timing.

Speaker 2: Certain statements made on the call today, including, but not limited to statements regarding business strategy and plans, a project portfolio market opportunity and potential growth discussions with commercial counterparties and financing sources progress of company projects, including anticipated timing of related approvals and anticipated production delays.

Related approvals and anticipated production delays.

Speaker 2: expected impact from various regulatory developments, completion of development, the potential impact of the current conflict in Israel on our operations and financial condition, and company actions designed to mitigate such impacts, and the company's future financial and operational results and guidance, including revenue and adjusted EBITDA, are forward-looking statements within the meaning of U.S. federal securities law, which reflect management's best judgment based on current available information.

<unk> impact from various regulatory developments completion of development the potential impact of the current conflict in Israel on our operations and financial condition and company actions designed to mitigate such impacts and the company's future financial and operational results and guidance, including revenue and adjusted EBITDA are forward looking statements within the meaning of U S. <unk>.

All Securities law, which reflect management's best judgment based on current available information, we referenced certain project metrics in this earnings call and additional information about such metrics can be found in our earnings release. These.

Speaker 2: We reference certain project metrics in this earnings call, and additional information about such metrics can be found in our earnings release.

Speaker 2: These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our annual report filed with the SEC on March 30, 2023, and other filings for more information on the specific factors that could cause actual results to differ materially from our forward-looking information.

These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our annual report filed with the SEC on March 30th 2023, and other filings for more information on the specific factors that could cause actual results to differ materially from our forward looking information.

Speaker 2: Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Additionally, non-IFRS financial measures may be discussed on the call. These non-IFRS measures should be considered in addition to, and not as a substitute for, or in isolation from our results prepared in accordance with IFRS.

Although we believe these expectations are reasonable we undertake no obligation to revise any statements to reflect changes that occur. After this call. Additionally, non <unk> financial measures may be discussed on the call. These non <unk> measures should be considered in addition to and not as a substitute for or in isolation.

<unk> from our results prepared in accordance with Ifr S. Reconciliations to the most directly comparable <unk> financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our Investor Relations website.

Speaker 2: Reconciliations to the most directly comparable IFRS financial measures are available in the earnings release and the earnings presentation for today's call, which are posted on our Investor Relations website.

Speaker 2: With me this morning are Gilad Yavet, CEO and Co-Founder of Enlight, Nir Yehuda, CFO of Enlight, and Jason Ellsworth, CEO and Co-Founder of Clonera. Gilad will provide some opening remarks and will then turn the call over to Jason for a review of our U.S. activity and then to Nir for a review of our financials. Our executive team will then be available to answer your questions. Thank you, Seth.

With me. This morning are <unk>, CEO and co founder of enlighten near <unk> CFO of enlighten and Jason Houseworth, CEO and cofounder of <unk>.

<unk> will provide some opening remarks and will then turn the call over to Jason for a review of our U S activity and then to Nir for review of our financials. Our executive team will then be available to answer your questions.

Thank you Seth and thank you all for joining us today.

Speaker 3: Before talking about the business in our quarterly performance, I would like to address the current situation in Israel.

Before talking about our business and our quarterly performance I would like to address the current situation in Israel over a month ago is railroad brutally attacked bacteria to organization and now find itself in a state of war with the aim to defend its even population as well as the values of freedom and democracy.

Speaker 3: Over a month ago, Israel was brutally attacked by a terrorist organization and now finds itself in a state of war with the aim to defend its civil population, as well as the values of freedom and democracy.

Speaker 3: Given all the extreme events taking place in our country, we are quite proud that Enlight has succeeded in maintaining its non-profit operations and in parallel engaging in support for society with extensive community outreach and acts of goodwill during this difficult period.

Given all the extreme event taking place in our country. We are quite proud that in light has succeeded in maintaining its nonproliferation and MRO engaging and support for our society with extensive community outreach and act with goodwill during this difficult period.

Speaker 3: It's a tribute to our employees and our company's values that we are able to maintain our commercial growth and success, while at the same time looking after families and small businesses that have been affected by the pandemic.

It's a tribute to our employees and our company's values that we are able to maintain our commercial growth and success. While at the same time looking after your families and small businesses that have been affected by the war.

Speaker 3: In terms of our operational project in Israel, all are producing power hardly without interruption. Moreover, our geographically diversified portfolio is a source of strength for our company. In the first nine months of 2023, 74 percent of our revenues were generated in Europe and in the U.S., with the remaining 26 percent in Israel.

In terms of our operational project in Israel.

Our producing power hardly without interruption. Moreover, our geographically diversified portfolio is a source of strength for our company in the first nine months of 2023, 74% of our revenues were generated in Europe and in the U S with the remaining 26% in Israel.

Speaker 3: Moving on to a discussion of our business and light results for the third quarter and nine months were solid. Third quarter revenue grew 3% year-over-year to $58 million. Net income grew 35% to $26 million, and adjusted EBITDA grew 32% to $47 million in the quarter.

Sure.

Moving onto a discussion of our business in that regard for the third quarter and nine months were historic third quarter revenue grew 3% year over year to $58 million.

Net income grew 35% to $26 million and adjusted EBITDA grew 32% to 47 million in the quarter.

Speaker 3: Revenue for the first nine months of 2023 grew 39% year-over-year to $182 million, nine-month net income grew 201% to $82 million, and adjusted EBITDA grew 64% to $142 million for the nine-month period.

Revenue for the first nine months of 2023 grew 39% year over year to $182 million nine month net income grew 201% to $82 million and adjusted EBITDA grew 64% to $142 million for the nine months period.

Speaker 3: We also saw significant growth in our operating cash flow, which reached $31 million during the quarter and $126 million for the first nine months of 2023, an increase year-over-year of 57% and 135% respectively.

We also saw significant growth in our operating cash flow, which reached $31 million during the quarter and $126 million for the first nine months of 2023, an increase year over year of 57% and 135% respectively.

Speaker 3: Continuing on momentum from last quarter, we are pleased with the progress made on Project Bjornberget in Sweden, which has reached full production.

Continuing our momentum from last quarter. We are pleased with the progress made on project beyond <unk> in Sweden, which has reached full production.

Speaker 3: On the back of solid third quarter results, we reaffirm our full year 2023 guidance.

On the back of solid third quarter results, we reaffirm our full year 2023 guidance.

Speaker 3: Before Jess and Anir go deeper into our project and results, I would like to focus on our company's two main objectives.

Before Jason Nir go deeper into our project and results I would like to focus on our company's two main objectives daily.

Speaker 3: delivering above market product returns and delivering above market growth.

Delivering above market product return and delivering above market growth.

Speaker 3: In recent months, there has been a growing debate amongst investors as to whether product returns are high enough to withstand rising interest.

First let's discuss return.

In recent months there has been a growing debate amongst investors as to whether project returns are high enough to withstand rising interest rates.

Speaker 3: This concern has grown in light of recent announcements from several major companies in the renewable energy sector, cutting their outlook, whether across offshore wind, residential solar, or utility electricity.

This concern has grown in light of recent announcements from several major companies in the renewable energy sector cutting their outlook, whether across offshore wind residential solar or utility in the code.

Speaker 3: I would like to tackle these concerns head-on and be very direct. Project returns that in life remain robust and are increasing. This has been achieved through our clear and defined strategy, which includes, one, amending existing PPA pricing higher while driving pricing significantly higher on newly signed PPAs.

I would like to tackle these concerns.

And be very direct.

Protect returns in light remain robust and are increasing this has been achieved through a clear and defined strategy, which includes one and landing existing PPA pricing higher while driving pricing significantly higher on newly signed Ppas.

Speaker 3: Two, remaining nimble on supply chain, enabling us to capture the value of rapidly easing costs across solar panels and batteries. And three, reaping the benefit of the IRA, which uniquely favor our portfolio. I will now provide details.

Two remaining nimble on supply chain, enabling us to capture the value with rapidly easing costs across solar panels, and battery and three reaping the benefit of the Iia, which uniquely favor our portfolio.

I will now provide details on each of these points.

Speaker 3: First, we amended over 1.8 gigawatts of legacy PPAs in the past 18 months with price increases on average of 25%. There are several more amendments currently.

First we amended over one eight gigawatts with legacy Ppas in the past 18 months with price increases on average of 25%.

There are several more amendments currently under negotiation.

Speaker 3: Moreover, on newly contracted projects, PPA pricing has moved higher. During the third quarter, we signed PPAs in the U.S. at prices on average 25% higher than what we were seeing a year ago.

Moreover, our newly contracted project PPA pricing has moved higher during the third quarter, we signed PPA in the U S at prices on average 25% higher than what we are seeing a year ago.

Speaker 3: Similarly, in Europe , we signed an inflation-linked 15-year CFD at close to 70 euro per megawatt hour.

Clearly in Europe, we signed an inflation linked 15 years Cfd at close to 70, Europe, where megawatt hour.

Speaker 3: How have we managed to amend existing PPAs and drive new PPA pricing higher? With our interconnection advantage. Put simply, we are uniquely positioned to deliver large scale renewable energy projects to utilities who urgently need power now. And our customers are willing to pay.

However, we managed to amend existing Ppas and drive new PPA pricing higher with our interconnection advantage put simply we are uniquely positioned to deliver large scale renewable energy projects to utility who urgently need power now and our customers are willing to pay.

Speaker 3: Second, we have secured a competitive advantage in supply chain. While many have opted to lock in module supply in the U.S. through long-term arrangement and a very high pricing, we chose to enter into flexible contracts that enable us to capture the value of wafer price

Secondly, we have secured a competitive advantage in supply chain, while many have opted to locking module supply in the U S through long term arrangement and a very high pricing, we chose to enter into flexible contracts that enable us to capture that value wafer price decline.

Speaker 3: As a result, today in the U.S., we can buy up to 2 gigawatts of panels at less than 30 cents a watt.

As a result today in the U S. We can buy up to two gigawatts of panel at less than 30 tends to work.

Speaker 3: We were modeling between $0.36 and $0.40 a watt across our U.S. projects just a few months ago. In Europe , the decline has been more dramatic. We can acquire panels today in Europe at less than $0.20

We were modeling between 36 and 40 <unk> across our U S projects, just a few months ago in.

In Europe. The decline has been more dramatic we can acquire balance today in Europe at less than 20 cents per watt.

Speaker 3: Similarly, battery container pricing has come down dramatically in the last three months from $250 to $180 per kilowatt hour than on average, and nearly 30% decline.

Similarly battery container pricing has come down dramatically in the last three months from $250 to 180 per kilowatt hour than the average and nearly 30% decline.

Speaker 3: Some in the sector have been dragged down by legacy PPAs, which have not been amended, coupled with take-or-pay equipment contracts at high prices.

In short.

Selling the sector is being dragged down by legacy Ppas, which have not been amended coupled with take or pay equipment contract at high pricing.

Speaker 3: On the other hand, we've been able to generate significant operating leverage from declining equipment costs while pushing PPA prices higher, driving robust project

On the other hand, we've been able to generate significant operating leverage from declining equipment costs, while pushing PPA prices higher driving robust project returns.

Speaker 3: Finally, we are reaping the benefits of the IRA in the U.S. in addition to the increased tax equity we can raise on projects under the PTC track, which benefits our West States focus portfolio. We also stand to benefit from tax credit adders. Approximately one quarter of our U.S. projects are eligible for the energy community adder. The most recent examples of this are Atrisco, Quail Ranch, and Rustic Hill, all of which are in our mature portfolio.

Finally, we are reaping the benefit of the IRI in the U S. In addition to the increased tax equity we can raise on project under the BDC track, which benefits our west States focused portfolio. We also stand to benefit from tax credit either.

Approximately one quarter of our U S projects are eligible for the energy community theater. The most recent examples of this are a <unk> <unk> and <unk> Q all of which are in our mature portfolio.

Speaker 3: Putting this all together, based on the above factors, we are now modeling a substantial improvement in the returns we expect to generate from our 3.6 gigawatt and 5.5 gigawatt hour of projects that are expected to COD between 2024 and 2026.

Putting this altogether based on the above factors. We are now modeling a substantial improvement in the returns we expect to generate from our three six gigawatt and five five gigawatt hour of projects that are expected to <unk> between 2024 and 2026.

This portfolio is now expected to generate an unlevered ratio of around 10% approximately 80 basis points higher than our expectation for models, we prepared in the second quarter.

Speaker 3: Even in a higher base rate environment, with these unlevered returns, we expect to deliver healthy meat in levered product.

Even in a higher base rate environment with this unlevered returns, we expect to deliver healthy mid teen Levered project returns.

Speaker 3: And to be very clear, our focus on returns is a fundamental feature of a joint developer and IPP business model.

And to be very clear our focus on returns is a fundamental feature of joint developer and IPP business model.

Speaker 3: The alignment of interest that results from both the developer and IPP being under one umbrella means that Enlight is focused on developing projects that our internal IPP can profitably host.

The alignment of interest that results from both the developer and IBP being under one umbrella means that in light is focused on developing projects that are internal IPP can profitably halt.

Speaker 3: Driven by the strong project fundamentals, we aren't giving up on our growth. We are continuing to accelerate.

Driven by the strong project fundamentals, we aren't giving up on our growth. We are continuing to accelerated we reached commercial operation on 256 megawatts of generation and 90 megawatt hours of energy storage during the quarter, including Genesis with the largest renewable energy.

Speaker 3: We reached commercial operation on 256 megawatts of generation and 90 megawatt hours of energy storage during the quarter, including Genesys Wind, the largest renewable energy product in Israel.

Speaker 3: We have thus completed the entirety of our plan to reach 1.8 gigawatts of operational generation by the end of 2023.

Next thing Israel.

We have completed the entirety of our plan to reach one eight gigawatts of operational generation by the end of 2023.

Speaker 3: We also made significant strides on the conversion of our development portfolio. We added 530 megawatts and 1.3 gigawatt hour to our mature project portfolio, including Country Acres, a new and substantial project in California, as well as Quail Ranch, the second phase of our flagship Atrisco project.

We also made significant strides on the conversion of our development portfolio.

We added 530 megawatts in one three gigawatt hour to a mature project portfolio, including country acreage and units extension project in California, as well as quell ranch in the second phase of our flagship in critical product.

Speaker 3: Both projects, which have signed PPAs and signed interconnection agreements, are targeted for commercial operation in 26 and 25, respectively.

Both projects, which have signed Ppas and signed interconnection agreements are targeted for commercial operation in 2006 and 25, respectively.

Speaker 3: I do want to note that we are now expecting a delay at project COVAR, which is expected to COD in 26 versus our original expectation in 24.

However.

I do want to note that we are now expecting delay at project fuel bar, which is expected to COPD in 'twenty six versus our original expectation in 'twenty five.

Speaker 3: The delay has been driven by an interconnection queue reform being implemented by APS in Arizona, which will delay the receipt of our interconnection agreement.

The delay has been driven by an interconnection queue, we fall.

<unk> implemented by Aps in Arizona, which will delay the receipt of our interconnection agreement too.

Speaker 3: To compensate for the delay, we've been able to accelerate some of our other major projects from 26 to 25, highlighting the depth of our development engine.

To compensate for the delay we've been able to accelerate some of our other major projects from 26% to 25% highlighting the depth of our development engine Jay.

Speaker 3: Jason will elaborate more on COBAR and our plans for 2025 and 2026 in the U.S.

Jason will elaborate more on <unk> and our plan for 2025 and 2026 in the U S.

Speaker 3: Finally, to deliver above-market growth and above-market project returns, we are working also to optimize the access to high-quality capital and debt. We are in the final stages of achieving financial close on two major projects, the solar portion of Atrisco in the U.S., as well as the solar plus storage cluster in Israel. In total, we expect to secure above $500 million of project finance.

Finally to deliver above market growth and above market project return we.

We are working also to optimize the access to high quality capital and debt.

We are in the final stages of achieving financial close on two major projects. The solar portion of the trade is going to the U S as well as the Fuller plus storage clustering in Israel in total we expect to secure above $500 million of project finance, we hope to be able to update you in the coming weeks.

Speaker 3: We hope to be able to update you in the coming weeks as we complete each of these transactions.

We complete each of these transactions.

Speaker 3: Post-closing, we expect to recycle $300 million of excess equity invested in this project back to Enlight. The capital recapped from this project plus the cash we have on hand and cash flow we expect from operational project is expected to provide us with the equity required to deliver a total operational portfolio of 4.6 gigawatts and 3.6 gigawatt hour extending into 2026 CODs.

Post closing, we expect to recycle $300 million of excess equity invested in this project back to enact the catheter recap from these projects plus the cash we have on hand and cash flow. We expect from impression on project is expected to provide us with the equity required to deliver a total operational growth.

Folio of four six gigawatt in three six year with our extending into 2026 year deals.

Speaker 3: To fund further growth thereafter, we expect to execute on our capital recycling strategy, selling down minority stakes in projects.

To fund further growth thereafter, we expect to execute on our capital recycling strategy selling down minority Stakes in projects.

Speaker 3: We began to execute this capital recycling strategy during the third quarter. We sold off our 10% stake in Faraday, a 680 megawatts pre NTP project in Utah for $190,000 per megawatt, obtaining 13 million of capital for future use.

We began to execute this capital recycling strategy during the third quarter, we sold off our 10% stake in <unk>, a 680 megawatts pre NTP project in Utah for $190000 per megawatt outstanding 13 million of capital for future years.

Speaker 3: We also sold our 50% share in several small operation projects, totaling 25 megawatts in Israel for six minutes. These transactions, while small, nevertheless illustrate the potential to unlock value and growth capital through selldowns.

We also saw our 50% share in favor of small operation projects totaling 25 megawatts in Israel.

$6 million.

These transactions, while small nevertheless, illustrates the potential to unlock value and growth capital through sell downs.

Speaker 3: In summary, we see attractive fundamentals in our business, pricing power for our project and easing supply chain and access to product finance, which will all enable us to deliver on our twofold objective of above market product returns and above market growth. I will now hand it off to Jason, who will provide more details on some of our U.S. projects.

In summary, we see attractive fundamentals in our business.

Pricing power for a project and easing supply chain and access to project finance, which will all enable us to deliver on our two fold objective of above market product return and above market growth I will now hand, it off to Jason who will provide more details on some of our U S projects.

Speaker 4: Thank you, Gilad. In the U.S., project fundamentals remain strong. PPA prices are increasing and equipment pricing is falling. At the same time, we are making steady progress in growing and advancing our project portfolio. Against that positive backdrop, it is likely that our flagship COBAR project will be delayed approximately one year due to an interconnection queue reform by Arizona Public Services.

<unk> in the U S project fundamentals remained strong PPA prices are increasing and equipment pricing is falling at the same time, we are making steady progress in growing and advancing our project portfolio against that positive backdrop. It is likely that our flagship C. L bar project will be delayed approximately one.

One year due to an interconnection queue reform by Arizona public services construction on the solar portion of <unk> in New Mexico, comprising 364 megawatts remains on schedule. All major equipment is onsite or project racking is 99% complete and 90.

Speaker 4: Construction on the solar portion of Atrisco in New Mexico, comprising 364 megawatts, remains on schedule. All major equipment is on site. Our project racking is 99% complete and 96% of modules are installed. We plan to achieve COD at the beginning of the third quarter of 2024.

6% of modules are installed we plan to achieve cod at the beginning of the third quarter of 2024 Escalade mentioned, we've materially finalized the definitive documents required for project finance on the solar portion of the <unk>, including term debt and tax equity and closing is expected imminently.

Speaker 4: As Gilad mentioned, we've materially finalized the definitive documents required for project finance on the solar portion of Atrisco, including term debt and tax equity, and closing is expected imminently.

Speaker 4: The storage portion of a Trisco, comprising 1.2 gigawatt hours, is now delayed due to supplier issues.

However.

The storage portion of our trustco comprised a one two gigawatt hours is now delayed due to supplier issues.

Speaker 4: COD is expected during the fourth quarter of 2024. We are evaluating the possibility of a change of storage supplier to meet project timelines and bank financing requirements.

As expected during the fourth quarter of 2024, we are evaluating the possibility of a change of storage supplier to meet project timelines and bank financing requirements.

Speaker 4: In parallel, we are expanding the potential of our Atrisco complex under our land and expand strategy.

In parallel we are expanding the potential of our <unk> complex under our land and expand strategy.

Speaker 4: We are pleased to announce that in October 2023, we signed a PPA with PNM, the current offtaker of Atrisco, for an expansion of Atrisco. The new project, called Quell Ranch, is sized at 120 megawatts of solar and 400 megawatt hours of storage.

We are pleased to announce that in October 2023, we signed a PPA with PNM. The current off taker of the Triska foreign expansion of <unk>. The new project called quell ranch is sized at 120 megawatts of solar and 400 megawatt hours of storage the project will benefit.

Speaker 4: project will benefit from Atrisco's completed development status and therefore has been added to our mature project portfolio this quarter. Moreover, like Atrisco, Quell Ranch will benefit from an energy community tax credit adder. Under our land and expand strategy, we can reduce risk and compress development timelines while increasing

<unk> completed development status and therefore has been added to our mature project portfolio this quarter Mauro.

Moreover, Leica <unk> ranch will benefit from an energy community tax credit at or under our land and expand strategy, we can reduce risk and compressed development timelines, while increasing returns.

Speaker 4: We plan to start construction in 2024 and achieve COD in 2025.

We plan to start construction in 2024 and achieve Sidoti in 2025.

Speaker 4: In addition to Quail Ranch, we also added a large new project to the mature portfolio this quarter called Country Acres. Located in California, it is sized at 392 megawatts of solar and 688 megawatt hours of storage. We recently executed a PPA and interconnection agreement with Sacramento Municipal Utility.

In addition to quell ranch, we also added a large new project to the mature portfolio. This quarter called country acres located in California. It is sized at 392 megawatts of solar and 688 megawatt hours of storage, we recently executed a PPA and.

Interconnection agreement with Sacramento Municipal utility district, the solar is contracted for 30 years and storage for 20 years under bus bar agreement.

Speaker 4: The solar is contracted for 30 years and storage for 20 years under busbar agreement.

Speaker 4: Clean Air has a long history of project development in California and we are excited about this new major project and the quality of our partners.

Clean Air has a long history of project development in California, and we are excited about this new major project and the quality of our partner.

Speaker 4: We expect construction on country acres to begin in 2024 and commercial operations in 2026.

We expect construction on country acres to begin in 2024 and commercial operations in 2026.

Speaker 4: Finally, we expanded our Roadrunner project with Arizona's APCO by additional 44 megawatts of solar and 140 megawatt hours. We continue to work with APCO to meet their growing need for clean and reliable power and capacity.

Finally, we expanded our Roadrunner project with Arizona is atco by additional 44 megawatts of solar and 140 megawatt hours, we continue to work with Atco to meet their growing need for clean and reliable power and capacity.

Speaker 4: In total, between Quail Ranch, Country Acres, and the Roadrunner expansion, we added 556 megawatts of solar and 1,228 megawatt hours of storage to our mature portfolio in the U.S. during the quarter.

In total between quell ranch country acres and the road runner expansion, we added 556 megawatts of solar and 1228 megawatt hours of storage to our mature portfolio in the U S. During the quarter.

Speaker 4: On CO bar are 1.2 gigawatt solar and 800 megawatt hour storage project located in Arizona.

C L bar R. One two gigawatts solar and 800 megawatt hour storage project located in Arizona.

Speaker 4: we expect to see a one-year delay. As Gilad mentioned in September , Arizona Public Services enacted a reform of its interconnection queue process.

We expect to see a one year delay Escalade mentioned in September Arizona public services enacted a reform of its interconnection queue process. The reform changes Aps Interconnection study review from a first come first served basis to our first ready first served approach while <unk> real estate permitting offtake.

Speaker 4: The reform changes APS interconnection study review from a first come, first served basis to a first ready, first served approach. While COBAR's real estate permitting offtake and system impact study are already secured, it is expected that the revised process will cause an approximate one year delay to the project.

And system impact study are already secured it is expected that the revised process will cause an approximate one year delay to the project as a result, we have moved the project's expected CRD from 2025 to 2026, we are working with our partners in the state to try and shorten this delay given the <unk>.

Speaker 4: As a result, we have moved the project's expected COD from 2025 to 2026. We are working with our partners in the state to try and shorten this delay given the project's advanced status.

Speaker 4: To help offset the impact of the COBAR delay, we are accelerating the scheduled COD for Roadrunner.

<unk> advanced status.

To help offset the impact of the <unk> delay we are accelerating the scheduled for Roadrunner that 294 megawatts of solar and 940 megawatt hours of storage from a 2026 to a 2025 CRD as I mentioned, a moment ago <unk> ranch, including a 100.

Speaker 4: 294 megawatts of solar and 940 megawatt hours of storage from a 2026 to a 2025 COD. As I mentioned a moment ago, Quell Ranch, including 120 megawatts and 400 megawatt hours, entered the mature project portfolio and is also expected to reach COD in 2025.

20 megawatts and 400 megawatt hours entered the mature project portfolio and is also expected to reach Sidoti in 2025. These.

Speaker 4: These projects are both mature and well suited for 2025.

These projects are both mature and well suited for 2025 completion.

Speaker 4: While we are disappointed with the delay to COBAR, the depth of our development portfolio affords us the ability to be nimble. Recapping, we are encouraged by our team's progress in the development and construction of our U.S. portfolio. Where there are delays, we are advancing other portfolio projects to fill our schedule and continue to deliver strong results.

While we are disappointed with the delay to seal bar the depths of our development portfolio affords us the ability to be nimble.

Recapping, we are encouraged by our team's progress in the development and construction of our U S portfolio, where there are delays we are advancing other portfolio of projects to fill our schedule and continue to deliver strong results.

Speaker 4: Our projects are well-sighted and well-developed, evoking strong demand from off-demand.

Our projects are well sided and well developed evoking strong demand from off takers and we are benefiting from falling equipment prices. Overall project returns are robust and we are encouraged by the strength of the U S market.

Speaker 4: and we are benefiting from falling equipment prices. Overall project returns are robust and we are encouraged by the strength of the U.S. market.

Speaker 4: With that, I'll turn it over to Nir to review the company's financial.

With that I'll turn it over to Nir to review the company's financials.

Speaker 3: Thank you, Jason. In the third quarter of 2023, the company's revenue increased to 58 million, up from 56 million last year, a growth rate of 3% year over year. Growth was mainly driven by the revenue contribution of new operational projects and inflation indexation embedded in PPS for already operational projects.

Thank you Jason in the third quarter of 2012, the company's revenue increased to 58 million up from $56 million last year, a growth rate of 3% year over year growth was mainly driven by the revenue contribution of new operational project and inflation indexation embedded in PPS for already.

Speaker 3: This was largely offset by a decline in revenues that had come a year over year, driven by lowered electricity price relative to the price observed in the same quarter last year.

Channel project. This was largely offset by a decline in revenues at <unk> year over year, driven by lower electricity price relative to the price observed in the same quarter last year since the third quarter of last year 544 megawatt 81 megawatt hour of projects started selling electric.

Speaker 3: Since the third quarter of last year, 544 megawatt and 81 megawatt hour of projects started selling electricity, including Bjornberg in Sweden, Apex Solar in the US, ACDC in Hungary, and several small solar and storage projects in Israel.

City, including beyond <unk> in Sweden epic solar in the U S AC DC in Hungary, and several Florida solar and storage project in Israel.

Speaker 3: This project collectively contributed $8 million revenue during the third quarter of 2020.

These projects collectively contributed 8 million revenue during the first quarter of 'twenty three.

Speaker 3: The biggest contributor was Burenberg 5 million, which is now operating at full production.

The biggest contributor was <unk> 5 million, which is now operating at full production.

Speaker 3: Kama revenues fell year over year by 38 percent, 8 million year over year, driven by lower power price relative to last year's peak electricity price.

Tomo revenues fell year over year by 38% 8 million year over year, driven by lower power price relative to last year's peak electricity pricing.

Speaker 3: Finally, the company also benefited from inflation indexation embedded in its PPAs, which contributed an additional $3 million of revenue during the quarter.

Finally, the company also benefited from inflation indexation embedded in its PPA, which contributed an additional $3 million of revenue during the quarter.

Speaker 3: This reflected on average indexation of 7.2% across 592 megawatts of PPAs for projects that have been operational for a full year. Net effects impact was immaterial to results for the quote.

This reflected an ever at indexation of seven 2% across 592 megawatts of Ppas for projects that have been operational for a full year net FX impact was immaterial to results for the quarter.

Speaker 3: Net income increased to 26 million, a growth rate of 35% year-over-year. There was a non-cash benefit of 8 million this quarter attributed to the mark-to-market of interest rate hedge. The company entered into a head of financial growth process at Atrisco. The residual change in net income was driven by a reduction in the expectation for earner payment linked to the acquisition of one of 12 million.

Net income increased to 26 million a growth rate of 35% year over year. There was a non cash benefit of $8 million. This quarter attributed to the mark to market of interest rate hedges the company in that into our head of financial close process at risk.

The residual change in net income was driven by a reduction in the expectations for <unk> payments linked to the acquisition of linear.

Speaker 3: compared to $18 million reduction during the same period in 2022. And again, recognized on project divestitures of $8 million.

<unk> medium.

Compared to $18 million reduction during the same period in 2002, and again recognize on project divestitures of $8 million.

Speaker 3: In the third quarter of 23, the company adjusted EBITDA grew by 32% to 47 million compared to 36 million for the same period in 22. Aside from the factor which affected our revenues growth, important items included gains recognized from project divestiture and the final 2 million installment of compensation payment from Siemens Gamesa linked to the delay in reaching full production at Boeing.

In the third quarter was 23 the company adjusted EBITDA grew by 32% to $47 million compared to 36 million for the same period in 'twenty two aside from the factors, which affected our revenues look important items included against vehicle blurry.

<unk> divestiture.

The final 2 million installment of compensation payments from Siemens Gamesa linked to the delay in reaching full production at <unk>.

Speaker 3: With respect to the diversification, the company sold its 10% stake in the Faraday solar project in the US for $190,000 per megawatt. We recognize a gain of $3 million in the third quarter and expect to recognize an additional gain of $2 million in the fourth quarter.

With respect to the divestitures the company sold its 10% stake in the followed a solar project in the U S for $190000 per megawatt, we recognize again, a $3 million in the third quarter and expect to recognize an additional gain of $2 million in the fourth quarter seemingly.

Speaker 3: Similarly, the company sold 50% of several small operational projects in Israel.

Ali the company sold 50% of several small operational project in Israel.

Speaker 3: for $465,000 per megawatt, recognizing, again, in the third quarter of $5 million.

$465000 per megawatt.

Recognizing again in the third quarter of $5 million.

Speaker 3: These gains were offset by a one million increase in over.

These gains were offset by a 1 million increase in northern Ireland.

Speaker 3: Moving to 23 guidance, we are pleased to reaffirm our full year 23 outlook provided last quarter. We expect annual revenue between $265 to $275 million with adjusted EBITDA between $188 million and $199 million.

Moving to 'twenty three guidance, we are pleased to reaffirm our full year 'twenty three outlook provided last quarter. We expect annual revenues between 265 to 275 million with adjusted EBITDA between $188 million and $199 million.

Speaker 3: Looking to our balance sheet, Enlighten gets a number of capital raising transactions during the quarter. In September , the company raised 390 million shekels, approximately 84 million dollars at the time, of unsecured corporate debt in Israel at an effective rate of 5.8 percent, expanding on the existing senior unsecured 6 series.

Looking to our balance sheet and light engaging a number of capital raising transaction during the quarter in September the company with 319 million chicken approximately $84 million at the time of unsecured corporate debt in Israel, an effective rate of five 8% expanding on the existing.

Senior unsecured say six period.

Speaker 3: We have also been working to achieve financial closing on both Atrisco Solar in the U.S. and our Solar Plus storage project in Israel. We have almost reached the finish line, as definitive documents have been finalized. We hope to be able to update you in coming weeks as we close each of these ones.

We have also been working to achieve financial closing on both a tricycle solar in the U S and our solar plus storage project in Israel. We have almost reached the finish line as definitive again documents have been finalized we hope to be able to update you in coming weeks as we close each of these transactions.

Speaker 3: The combined sum of these two transactions is expected to be more than $500 million. From this amount, there is more than $300 million of access equity capital, which we expect to recycle back to Enlight. This transaction should further strengthen our balance sheet, reinforcing the financial footing needed to deliver the future growth of our business.

The combined some of these two transaction is expected to be more than 500 million from this amount and with more than $300 million of excess equity capital, which we expect to recycle back to align this transaction should further strengthen our balance sheet, we have enforced in the financial footing needed to deliver.

The future growth of our business.

Speaker 3: Finally, at the end of the quarter, we had $170 million of revolving credit facility at several Israeli banks, of which $110 million remain undrawn. The facilities provide us with additional financial firepower and flexibility as we allocate equity investment in projects and optimize project financing over time.

Finally as of the end of the quarter, we had $170 million of revolving credit facility at several Israeli bank of which $110 million. We made on June the facilities provide us with additional financial firepower and flexibility as we allocate equity investment in project.

Speaker 3: In conclusion, we benefit from a strong funding position and access to capital with clear plans to deliver on our mature portfolio. We are executing well and are very excited about the future.

And optimized project financing over time.

In conclusion, we benefit from a strong funding position and access to capital with clear plans to deliver now mature portfolio.

Executing well and are very excited about the future.

Speaker 3: With that, I will turn it over to the operator for your question. Operator?

With that I will turn it over to the operator for your question operator.

Speaker 1: Thank you. To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again. Please stand by while we compile the Q&A roster. We will now go to the phone.

Thank you to all.

I'll ask a question you in its press star one on one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again, please standby, while we compile the Q&A roster.

We will now go to the SaaS question.

Speaker 1: And your first question comes from the line of Mark Stroud from J.P. Morgan. Please go ahead.

One minute please.

And your first question comes from the line of Mark styles from Jpmorgan. Please go ahead.

Speaker 4: Yes, thank you very much for taking our questions. Jason, I'm going to go back to the interconnection reform with the COBAR project. Thanks for the color there. When you look at your other projects that are pending over the next few years, let's say, are there other utilities, other states, any level that are looking at similar reforms? And how do you think about the risks on some of the other projects?

Yes. Thank you very much for taking my questions.

Jason I wanted to go back to the.

The interconnection reform with the CEO of our project.

Thanks for the color there can you when you look at your other projects that are pending over the next few years, let's say.

Are there other utilities other states kind of any level that are looking at similar reforms and how do you think about the risks.

Speaker 4: Yeah, that's a great question. Mark. We're watching that carefully across all of the utilities. The fortunate thing is we have.

On some of the other projects.

Yes, that's a great question, Mark we're watching that carefully across all of the utilities. The fortunate thing is we have.

Speaker 4: such an advanced status across all of our portfolio, including

Such an advanced status across all of our portfolio, including approximately 10 gigawatts.

Speaker 4: Approximately 10 gigawatts of of solar.

Speaker 4: And that has put us in a position to be well out ahead of changes.

Of solar.

And that has put us in a position to be well out ahead of changes the impact on Seo bar is is is procedural and says we worked through that certainly that has a has a delay but it is not impacting the remainder of our remainder of our projects and <unk>.

Speaker 4: The impact on COBAR is procedural, and as we work through that, certainly that has a delay, but it is not impacting

Speaker 4: The remainder of our remainder of our projects in Arizona, so it's very specific to seal bar and we don't currently see a risk to our other projects in terms of.

Resona. So it's very specific to <unk> and we don't currently see a risk to our other projects in terms of.

Speaker 4: interconnection to reform and changes there. Of course, there are overall delays in

Interconnection queue reform and changes there of course, there are overall delays and in the market in terms of Q <unk>.

Speaker 4: in the market in terms of Q and projects that are sitting in the back of those Qs are seeing delays and many of those are seeing significant delays if they are to be successful at all. Projects that are at the head of the Qs, as much of our portfolio are, are advancing and continuing to move forward. We're also continuing to use, as we've said in the past,

And projects that are sitting in the in the back of those Qs are seeing delays.

And many of those are seeing significant delays if if if they are to be successful at all.

<unk> that are at the head of the Qs as much of our portfolio are advancing and and continuing to move forward. We're also continuing to use as we have said in the past.

Speaker 4: engineering and procurement agreements with utilities in order to accelerate.

Engineering and procurement agreements with utilities in order to accelerate.

Speaker 4: The process that allows the utility to advance the work on their side in advance of having the facility studies complete or in advance of an LGIA in such a way that project timelines are benefited.

The process that allows the utility to advance the work on their side.

In advance of having the facility studies complete or in advance of an L. Gia in such a way that project timelines are benefited.

Speaker 5: Okay, thank you, Jason. And then a follow up, probably for.

Okay. Thank you Jason.

And then a follow up probably for Jawad.

Speaker 5: you know, obviously want to be sensitive to the, the, uh, what, you know, what's happening in Israel right now. But, uh, I, I do want to ask, uh, if there have been any, any employees that had been called up for service, uh, you know, kind of how we should think about, you know, what, what roles might be.

Obviously want to be sensitive to the.

Whats happening in Israel, right now, but I.

I did want to ask if there've been any any employees that had been called up for service.

Kind of just how we should think about what what roles might be.

Speaker 5: uh might be impacted there and kind of your ability to uh to kind of backfill for that thank

Might be impacted there and kind of your ability to kind of backfill for that thank you.

Speaker 6: Yeah, thank you very much. It's a great question. So I will start with the answer by saying that what we see in Israel right now is that we continue, we are able to continue the operations of all our sites in close to 100 percent, despite

Yes.

You're very much it's a great question so.

I will start with the answer by saying that what we see in Israel right. Now is that we continue and we are able to continue the operations.

Our all our sites in close to 100%.

Despite all the events.

Speaker 6: In terms of the employees, so first is a matter of figures. So about 45% of the total employees of the group are located in Israel 120 more or less out of

In terms of the employees, so first as a matter of.

Figures, so about 45% of the total employees of the group are located in Israel 100, and.

20, more or less out of.

Speaker 6: close to 300. About, I would say, a quarter of them are either in reserve service or spouses of people that are in reserve service.

At close to 300.

About.

I would say a quarter of them are either in reserve service or.

Spouses of people that are in reserve service.

Speaker 6: But the remainder of the employees are supporting all the operations, so we are very confident and but also very

But the remainder of the employees are supporting all the operations. So we are.

Very confident and but also very proud.

Speaker 6: in our employees, in the way they are handling the situation, and also in parallel supporting the civil society.

In our employees in the way they are handling the situation and also in <unk>.

Speaker 7: in many many actions that we are doing to support other businesses and also civil populations. We feel that this is part of the values of the company and we are doing it without affecting the business side. Okay, best of luck. Thank you very much.

Supporting the Civil Society in many many actions that we are doing to support other businesses and also civil populations. We feel that this is part of the values of the company.

And we are doing it without affecting the business site.

Okay.

Good luck, thank you very much.

Thank you.

We will now go to our next question.

Speaker 1: And the next question comes from the line of Julianne Lynn Smith from Bank of America. Please go ahead.

The next question comes from the line of Julianna.

Glenn Smith from Bank of America. Please go ahead.

Speaker 5: Hey, guys, it's Alex for Julian today. Thanks for taking our questions. Wanted to press a little bit more just on the sort of financing environment that you guys are operating in. Obviously, at Trisco, good to see that sort of fully termed out and ready to close at this point. We believe that it's still a little bit delayed from your expectations and beyond just the sort of back and forth between investors and counterparties across the space on returns. There's also been a lot of debate around ability to get tax equity, the transfer market, and the evolution there. I'm just curious if you can kind of give us what you guys are seeing the latest.

Hey, guys its Alex variable on for Julien today, Thanks for taking our questions.

Wanted to press a little bit more just on the sort of financing environment that you guys are operating in obviously, it's frisco good to see that.

Sure a fully termed out and ready to close at this point. If you believe that is still a little bit delayed from your expectations and beyond.

Just sort of back and forth between investors and counterparties across the space on returns. There has also been a lot of debate around ability.

The ability to get tax equity the transfer market and the evolution. There I'm just curious if you can kind of give us. What you guys are seeing the latest do you expect to use PTC or ITC transfer deals here forward.

Speaker 8: Do you expect to use PTC or ITC transfer deals?

Speaker 8: Uh, here forward, and if you can add, I mean, how would that impact the return profile that you guys sort of elegantly laid out at the beginning of the call relative to sort of your underwriting assumptions?

You can add I mean, how would that impact the return profile that you guys sort of elegantly laid out at the beginning of the call relative to sort of your underwriting assumptions.

Speaker 6: Yeah, so first, I'm very happy to update that we did close already the tax equity transaction for the solar portion of Trisco with Bank of America. It's a major transaction and an important milestone for the project and I hope that in the coming days or weeks we're going to close also the debt.

Yes, so first.

I'm very happy to update that we did close already to tax equity transaction for the solar portion of today's call.

Bank of America.

It's a major transaction and an important milestone for the project and I hope that in the coming days or weeks, we're going to close most of the debt.

Speaker 6: side of the project and the solar side of it. And then we'll go for the next milestone of closing tax equity and debt for the battery storage project. So first, in terms of Atrisco, we are very confident.

Side of the project and the storage side of it and then we'll go for the next milestone of closing tax equity and debt.

Battery storage projects. So first in terms of <unk>, we are very confident in executing the projects, we announce and tax equity for the project, we the suppliers out there after the equity and the.

Speaker 6: in executing the project finance and tax equity for the project, the suppliers are there of the equity and the debt, and it's more about the operation of the facility agreements in the current environment in the U.S.

And the debt.

And it's more about.

The operation of the facility agreements in the current environment in the U S. We are working very closely closely to optimize also the financial.

Speaker 6: We are working very closely to optimize also the financial terms.

Speaker 6: of the deal in order to make sure that we keep.

Terms.

Off of the deal in order to make sure that we keep.

Speaker 6: executing on profitability also. And I think this is also shown in our quarterly numbers where profitability has increased.

Executing on profitability also and I think this is also shown in our quarterly numbers were a profitability has increased and this is what we're doing in the transco. So I agree that there is around a one project one quarter delay, but I think we are very confident and as you see it.

Speaker 6: And this is what we're doing in the three schools. So I agree that there is around a one project one quarter delay, but I think we are very confident and as you see the project is advancing both in terms of its construction and also in terms of finance.

The project is advancing both in terms of its construction and also in terms of our financing.

Speaker 2: And Alex Joseph here just to touch on the strategy kind of in terms of underwriting for the longer term.

And Alex just to touch on the strategy kind of in terms of underwriting for the longer term.

Speaker 2: When we model our projects, particularly for the strategic ones, we're looking to use tax equity in the places which are strategic for us, for the large scale, very material projects in our portfolio. When we look towards some of our projects which may be smaller, we may look to transferability for both ease of execution and liquidity of that market.

When we model our projects, particularly for the strategic ones. We're looking to use tax equity into places, which are strategic for us towards the large scale very material projects in our portfolio. When we look towards some of our projects which may be smaller.

We may look to transfer ability for both use of.

Of execution.

Speaker 9: So we believe we have access to the tax equity market, but we also wanna be selective and use that tax equity for the projects which are most important and meaningful for us.

And liquidity of that market. So we believe we have access to the tax equity market.

But we also want to be selective and use that tax equity for the projects, which are most important and meaningful for us.

Speaker 8: Got it. Yep, makes a ton of sense given the backdrop and the amount of demand out there. On the other side, I mean, congrats again, I guess, on the amount of PPAs you guys sort of continue to reprice and renegotiate. Again, wanted to ask, you know, this is another sort of key debate in the space. How do those discussions go, you know, for you guys and also sort of what are you hearing across the space? Obviously, you operate in mostly a physical power market. Others do some things around virtual PPAs, et cetera. I'm curious sort of like what you're hearing from your customers when you go back to them for those things, what you're hearing from others, and how you expect that to evolve from here given the sort of push-pull of higher rates against much lower equipment costs that you guys alluded to at the beginning of the call. Thanks.

Got it makes sense on the size given the backdrop and the amount of demand out there on.

On the other side I mean, congrats again I guess on the amount of Ppas, you guys sort of continue to reprice.

Renegotiate.

Again wanted to ask this is another sort of key debate in the space how do those discussions go.

For you guys and also sort of what are you hearing across the space, obviously, you're operating in mostly a physical power market.

Others do some things around virtual ppas et cetera, I'm curious sort of what you're hearing from your customers. When you go back to them for those things what you are hearing from others.

How you expect that to evolve from here, given the sort of push and pull of higher rates against much lower equipment costs that you guys alluded to at the beginning of the call. Thanks, Yes, maybe I can start Jason and then you can complementary okay.

Speaker 10: Yeah, maybe I can start, Jason, and then you can compliment me. OK.

Speaker 6: So I would say that first it's very important to reiterate, as we said in previous quarters, that all the discussions we are doing with the utilities on the repricing are doing in goodwill and in mutual interest. There is nothing that is legal about these discussions. And I think this means that there is a mutual interest.

So I would say that first it's very important to reiterate as we said in previous quarters that OLED discussions we are doing with the utilities on the repricing are doing in goodwill in the mutual interest. There is nothing that is legal about these discussions and I think this means that there is a mutual interest and the interest is to see.

Speaker 10: And the interest is to see projects that are becoming operational soon, because the utilities need the electricity, and as we all see, there are some delays in the market.

Reject as that are becoming.

Operational soon because the utilities need electricity and as we all see there are some delays in the market.

Speaker 6: So whenever projects are more ready to get constructed and to support the need of the utilities, I think there is a strong support from the utilities to help them get there.

Whenever projects are more ready.

To get constructed and two.

Supports the needs of the utilities I think there is a strong support from the utilities to help them.

Speaker 10: And it is true that prices of equipment are going down. From the other side, still, the prices of electricity in the market, which are the alternatives.

Get there.

It is true that prices of equipment are going down from the other side.

Still the prices of electricity in the market, which are the alternatives.

Speaker 6: are much higher and also interest rates are still very high. So I think this still supports.

Are much higher and also interest rates are still very high so I assume there's still support.

Speaker 6: I would say this kind of actions that we are doing and we are still seeing also new PPAs that we've signed in the last quarter that were, they were 25% higher than the price of PPAs on average that we closed on comparing the period last year. So we see that the environment of PPA pricing in the market is also influencing our ability to reprice.

I would say this kind of actions that we are doing and we are still seeing also a new ppas that were signed in the last quarter that were they were 25% higher than the price of Ppas on average that we close on the.

Comparing the period last year, so we say that the environment of PPA pricing in the market is also influencing our ability to reprice.

Speaker 4: Thanks. Yes, I would reiterate that project readiness is a is a key characteristic of those discussions right now. It is so important to the utilities to have line of sight to projects coming on on onto the grid, supplying the needs of their customer base. And so we, in that, in that environment, we've found a, a lot of support for repricing though those conversations are never, never.

Thanks, a lot.

Yes, I would reiterate that project readiness is a is a key characteristic of those discussions right. Now. It is so important to the utilities to have line of sight to projects coming on onto the grid supplying the needs of their customer base and so we in that in that environment.

We've found a lot of support.

For repricing, though those conversations are never never easy.

Speaker 4: They're done respectfully and carefully with the utilities.

Theyre done respectfully and carefully with the utilities, considering their needs and the needs of the project and we have been consistently successful in that we are not looking too.

Speaker 4: considering their needs and the needs of the project.

Speaker 4: And we have been consistently successful in that we we are not looking to advance those beyond what the needs of the projects are in in terms of.

Advanced those beyond what the needs of the projects are in terms of.

Speaker 4: uh... obtaining the the increases that uh... that that are necessary to keep pace with

Obtaining the increases that that.

Speaker 4: with the inflationary environment, especially rate inflation. But with that in mind, the utilities have been very understanding and helpful in that process. And as Gilad has noted, even our new PPAs

Are necessary to keep pace with.

With the inflationary environment.

Especially rate and inflation.

But with that in mind, the utilities have been very understanding and helpful in that process and escalade as noted even our new ppas.

Speaker 4: are seeing roughly the same level of increase versus

Are seeing roughly the same level of increase versus versus some some months and even years ago. So at at a roughly 25% average increase across the board we continue to find reception and support from utilities, though as.

Speaker 4: some months and even years ago. So at a roughly 25% average increase across the board, we continue to find reception and support from utilities. Though, as mentioned, those discussions are carefully orchestrated and done respectfully with the utilities. They're not easy, but they are and have been successful.

As mentioned those those discussions are carefully orchestrated and and done respectfully what the utilities, there theyre not easy, but they are they are and have been successful.

Got it. Thank you guys. So much I will take it yourself.

Speaker 1: Thank you. Once again if you would like to ask a question please press star 1 and 1 on your telephone keypad that is star 1 and 1 to ask a question.

Thank you once again, if you would like to ask a question. Please press star one on one on your telephone keypad.

One on one call ask a question.

We will now go to your next question.

Speaker 1: And your next question comes from the line of Justin Clare from Roth MKM. Please go ahead. Yeah, hi.

And your next question comes from the line of Justin Clare from Roth.

Ma'am. Please go ahead.

Yes, hi, thanks for taking my questions here.

Speaker 5: So, I wanted to go back to the field bar project. So it sounds like it's now planned to be completed in 2026. so just wanted to understand a little bit better.

So I wanted to go back to the <unk> project.

So it sounds like it is now planned to be completed in 2026, So just wanted to understand a little bit better.

Speaker 7: The potential for that timeline to change, whether it could be accelerated back into 2025 or what the risk is that it could be delayed into 2027. And then wondering, you know, what you're waiting on in order to be able to start construction for that project. So that'd be helpful. Thank you. Transcribed by https://otter.ai

The potential for that time timeline to change whether it could be accelerated back into 2025 or what the risk is that it could be delayed into 2027.

And then wondering what youre waiting on in order to be able to start construction for that project.

Yes.

So that'd be helpful. Thank you.

Jason would you like to take that question.

Speaker 4: Yes, thank you get on. Thank you, Justin. That's a good question. So in in terms of the delay by way of specifics.

Yes, Thank you get on and thank you Jeff that's a good question. So in terms of the delay by way of specifics. There is a cluster type process that is proceeding and in that process. The timelines S. If a reasonably.

Speaker 4: there is a cluster type process that is proceeding and in that process the timelines if if reasonably measured out we'll put the project into 2026.

<unk>.

Measured out we'll put the project into 2026.

Speaker 4: We are comfortably into 2026. We are working together with the utility and our offtake APS is the interconnection utility the offtake the primary offtake on the co bar project is is SRP we also have a offtake contract with APS at that site

Comfortably into 2026, we are working together with the utility and our offtake Aps is the interconnection utility the offtake the primary offtake on the sale of our project is as SRP.

We also have a <unk>.

<unk> contract with Aps at that site.

Speaker 4: With all of those parties, we are discussing the potential to accelerate given the advanced nature of this project.

With with all of those parties, we are discussing the potential to accelerate given the advanced nature of this part of this project affected systems studies were completed already by all affected parties and so there is potential that the project can be accelerated given its readiness.

Speaker 4: Affected systems studies were completed already by all affected parties.

Speaker 4: And so there is potential that the project can be accelerated given its readiness. We don't have details on that. It is unlikely right now that the project would be accelerated so much as to move it back into 2025, but the current timelines point to a comfortable completion in 2026. Regarding the potential...

We don't have details on that it is unlikely right now that the project would be accelerated so much as to move it back into 2025.

But the current timelines.

Point to a comfortable completion in 2026.

Regarding potential and just and you asked about the potential to accelerate the.

Speaker 4: Accelerate the the build on that project or or start construction and what might gate that of course The interconnection timeline is important for that for purposes of timing out the project and and we we have already Begun engineering and procurement with with the utility. So we executed an EMP agreement

To build on that project or start construction and what might a gate that of course, the interconnection timeline is important for that for purposes of timing out the project and we have already.

Began engineering and procurement with with the utilities. So we executed an E&P agreement with.

Speaker 4: with APS already and so there is certain level of procurement and work that associated with the interconnection that has already begun.

With Aps already and so there are certain certain level of procurement and work associated with interconnection that has already begun.

Okay great.

Speaker 8: Uh, and then, um, just shifting gears a little bit here. Uh, it's so you close the tax equity portion of the financing for the Atrisco project.

Very helpful.

And then just shifting gears a little bit here.

So you closed the tax equity portion of the financing for the <unk> project I was wondering if you.

Speaker 11: I was wondering if you could share how much of the project CAPEX could be supported by the tax equity investment.

If you could share how much of the project Capex could be supported by the tax equity investments and then is that project.

Speaker 11: And then is that project, did you elect for the PTC there and then were you able to also secure the energy community adder as a part of the tax equity investment?

Did you elect for the PTC there and then where are you able to also secure the energy community at or is it part of the tax equity investment.

Speaker 11: And then when we look to future projects, you know, if there are projects that are similar to this with the PTC and energy community, would you expect similar terms for tax equity investments?

And then when we look to future projects.

If there are projects that are similar to this with the PTC and energy community would you expect similar terms for tax equity investment.

Speaker 9: So, thank you for that, Justin. So, it's a PTC deal, just given the generation profile and where it sits in New Mexico, naturally. The adder is not part of the PTC quantum. It is something that we will be monetizing ourselves through the transfer market. And the base tax equity check basically reflects around 50%, a bit north of 50% of project capital.

So thank you for that Justin so the PTC deal.

Just given the generation profile and where it sits in new Mexico naturally.

The adder is is not part of the PTC quantum.

It is something that we will be monetizing ourselves through the transfer market.

And the base tax equity check basically reflects around 50% a bit north of 50% of project Capex.

Speaker 11: Got it. Okay. And then the timing of monetizing it in the transferability market, what would that timing be? Does it need to be closer to COD or after COD? Yeah, that's exactly right. That's exactly right. That would be closer to COD.

Got it Okay and then the.

The timing of monetizing it in the transferability market what would the timing be is that does it need to be closer to COPD or after.

Right, that's exactly right that will be closer to CRB.

Speaker 11: Okay, got it. And then one other one, just on the capital recycling, so this quarter you had completed some minority sales. I was wondering if you could just speak to your plans for either the remainder of 2023 or 2024, any meaningful, you know, size projects that you're looking to complete a minority sell-down in, and then are any of your project timelines dependent on completing those sell-downs in order to acquire the equity capital?

Okay got it.

And then one other one just on the capital recycling. So this quarter you had completed some minority sales was wondering if you could just speak to your plans for either the remainder of 2023 or 'twenty four any meaningful.

Sized projects that Youre looking to complete a minority sell down and then are any of your project timelines dependent on completing those sell downs in order to acquire the equity capital.

Speaker 6: Thank you. I will start by saying that there is no project timeline that is dependent on any sell-down. With the equity that we have right now in hand, we are fully funded to construct the whole material portfolio pipeline, which is about 4.3 gigawatts.

Thank you I will start by saying that there is no project timing is dependent on any sell down with the equity that we have right now in hand, we were.

Our fully funded.

To construct the whole material portfolio pipeline.

Which is about 4.3 gigawatt.

Speaker 10: plus a significant amount of storage. This is the first part. The second part.

Class a significant amount of storage.

This is.

Speaker 12: is that we do a

The first part the second part.

Is it is.

We do.

Speaker 10: I would say part of our strategy is to perform sell-downs in 2024. I don't see additional material sell-downs in 2023, but 2024 is about, I would say, part of our strategy would be to perform sell-downs. This is in order to improve the profitability and also recycle equity for the future projects.

I would say both part of our strategy is.

To perform sale down in 2024, I don't see additional.

Materials <unk> 'twenty three but.

24 is about I would say part of our strategy will be to perform sale loans. This is in order to.

It improves.

The profitability and also recycle equity for the future projects, because we will continue to grow also.

Speaker 6: Because we will continue to grow also towards 26, 27, and we would like the cell dance and the equity that we recycle through cell dance to be part of our resource.

Towards 26, 27, and we would like the sell downs and the equity that we recycled through sell downs to be volatile.

Speaker 6: And by doing that, really minimize the need of equity from the market.

Resources.

And by doing that really minimized the needs of equity from.

The market.

Okay. Thanks very much.

Speaker 1: Thank you. We will now go to our final question for today.

Thank you.

We will now go to our final question for today.

Speaker 1: And the final question comes from the line of David Paz from Wolfe. Please go ahead.

And the final question comes from the line of Dave.

David Paz from Wolfe. Please go ahead.

Okay.

Hi can you hear me.

Speaker 13: Yeah, we can hear you, David. Oh, thank you.

Yes, we can hear you David Thank you.

Just wanted to touch back on the <unk> storage supplier delay, but I believe you mentioned.

Are you well first maybe any more color you can give us on that you didn't address from Kaufman are you using the same supplier for your other storage.

For your other projects.

Storage.

And if so which projects.

Speaker 6: Okay, thank you for the question. First, I will say that currently we are optimistic not to have delays in the supply of the storage part in the project. We are considering replacement of the battery supplier in the project.

Okay. Thank you for the question first I will say that currently we are optimistic not to have delays in the supply of the storage part in the project. We are considering replacement of the battery.

Speaker 10: while the EPC will remain the same, in order to meet or to be more confident in meeting the timetable of the project and some finance ability that will be improved. But we are confident on the ability to,

The supplier in the project, while the EPC.

Will remain the same.

To meet or to be more confident in meeting the timetable of the project in some extreme instability that will be improved.

But we are confident on the ability.

To.

Speaker 6: on the time framework that we are estimating.

Deliver the project on.

The time framework that we are estimated.

Speaker 10: Regarding the future, the second part of the question was on future projects. So as always as part of our supply strategy, we are working with multiple suppliers without exclusivity to any supplier. So we do work also with other channels, not only in this project, but in the future project. So we have the flexibility to do the same thing also in the future project.

And regarding the future.

The second part of the question was on.

On future projects, so as always as part of our supply strategy. We are working with multiple suppliers without exclusivity to any surprise. So we do work closely with other channels not only in this project, but in the future project. So we have the flexibility.

To do the same thing also in the future projects.

Speaker 7: Got it. Thank you. And then just given some of the project shifts that you mentioned, some pushed out, some brought forward, do you still anticipate the same growth rate through 26 as you did, you know, say, a quarter ago? And do you also anticipate or do you and do you anticipate any new common equity through 2026?

Got it. Thank you and then just given some of the project shifts that you mentioned some pushed out some brought forward do you still anticipate the same EBITDA growth rate through 2006, as you did say a quarter ago and do you also anticipate.

Okay, and do you anticipate any new common equity through 2026.

Speaker 9: So thanks for the question, David. So what we've articulated, and you'll see it in the release as well, that we have sufficient equity in terms of the capital we have on hand plus recycled capital. We have enough for 4.6 gigawatts and 3.6 gigawatt hours. Anything in excess of that, we intend to focus on our capital recycling strategy, the minority selldowns, and some of the dispositions that we've outlined.

So thanks for the question, David So what we've articulated and Youll see it in the release as well that we have sufficient equity to in terms of the capital we have on hand, plus recycled capital.

We have enough for $4 six gigawatts and three six gigawatt hours anything in excess of that we intend to focus on our capital recycling strategy.

Minority sell downs and some of the dispositions that we've outlined.

And remind me what was your first question.

Speaker 9: Just do you still anticipate the same bit of growth? Yeah. So, yeah. So, thanks for that. So, we've obviously accelerated some of the projects roughly 400 megawatts and 1.3 gigawatt hours of projects from 26 to 25. Obviously, that doesn't account for the full delay of the COBAR project to 2026.

Just do you still anticipate the same.

EBITDA growth yes.

Yes, so thanks for that so we've obviously accelerated some of the projects.

400 megawatts in one three gigawatt hours of projects from 26% to 25, obviously that doesn't account for the full delay of the <unk> project to 2026, but again as we look towards the end of 2026. The growth is just more back ended.

Speaker 9: But again, as we look towards the end of 2026, the growth is just more back-ended as COBAR will come in 2026, and we'll be benefiting from the growth of that project in 2026.

<unk> will come in 2026 and will be benefiting from the growth of that project in 2026.

Thank you.

Speaker 1: Thank you. We do have a follow-up question. One moment please.

Thank you we do have a follow up question for.

One moment please.

Speaker 1: And the follow-up question comes from the line of Julianne Dunvan-Smith from Bank of America. Please go ahead.

And the follow up question comes from the line of Judy.

Douglas Smith from Bank of America. Please go ahead.

Speaker 8: Hey guys, apologies, wanted to get one quick follow up there if I if I can just on the panel prices you alluded to and sort of the cost items.

Hey, guys apologies just wanted to get one quick follow up there if I if I can.

On the panel prices, you alluded to and sort of the cost items.

Speaker 8: Curious, like if that's sort of what you're seeing across the broader market, or you think that's somewhat unique to some of the supply contracts.

Curious, if that's sort of what youre seeing across the broader market or you think that's somewhat unique to some of the supply contracts.

Speaker 8: that you negotiated, I think, over a year ago with some parties in India or otherwise. And how are you planning to sort of, I guess, expand that panel strategy into the coming years, given the amount of construction or execution that you guys have ahead of you? Thanks.

Negotiated I think over a year ago with some parties in India or otherwise.

How are you planning.

Sort of I guess expand that panel strategy.

In the coming years, given the amount of.

Sort of construction of execution that you guys have ahead of you. Thanks.

Speaker 6: So I would say, and I can start, Tejas, and then you, again, can compliment me. So first, I would say that in an existing contract with where we were able to benefit.

So I would say.

I can start there Jason venue again can complement me. So firstly I would say that in an existing contract with where we were able to benefit from the reduction in prices. Although the contract was already signed because it had some linkage.

Speaker 6: from the reduction in prices, although the contract was already signed because it had some linkage mechanism to the price of polysilicon.

<unk> mechanism.

Speaker 6: So I think this was a very strong upside we got from the, I think, wise supply chain strategy we conducted. And on the broader term, yes, we do see the panel's price dropping off on the broader market, also internationally, maybe even more dramatically internationally. So going forward, we believe we'll continue to benefit from that on increased returns in the project while

The price of polysilicon.

So I think this was a very strong upside we got from <unk>.

I think why supply chain strategy we.

Conducted and on the broader term, yes, we do see the panel price dropping off on the broader market also internationally and maybe even more dramatically internationally. So going forward. We will we believe we will continue to benefit from that.

Returns in the project.

Speaker 6: being able to do that also on the existing projects that we are entering into construction.

Being able to do that also on the existing projects that we are entering into construction.

Thanks, a lot I would add that the.

Speaker 4: India contract was structured in such a way that it was indexed.

India contract was structured in such a way that it was indexed to certain floating prices in the in the industry and and we have we have benefited from that.

Speaker 4: to certain floating prices in the industry, and we have benefited from that. That indexing also provides an anchor for our other negotiations, and so we are seeing similar pricing levels from alternative suppliers, other supplier relationships that we have, and that is benefiting multiple projects beyond the existing India contract.

That indexing also prevent it provides an anchor.

Four.

For our other negotiations and so we are seeing similar pricing levels from alternative suppliers other supplier relationships that we have.

And that is benefiting multiple projects beyond the existing India contract. So we expect to see broader application of those prices and that benefit across the portfolio and are going to.

Speaker 4: So we expect to see broader application of those prices and that benefit across the portfolio and are going to, as we look forward to the coming years.

Yes.

Speaker 4: We continue to expect softness on pricing in terms of modules given the module supply situation across the industry as it impacts our business here in the U.S.

We look forward to the coming years.

We continue.

Continue to expect softness in <unk>.

Pricing in terms of modules given the module supply situation across the industry.

As it impacts our business here in the U S.

Speaker 8: Got it. Yep. Makes sense. Given kind of what we're seeing as well. And just 1 last 1 as far as I know asked about the, the renegotiation and sort of how those discussions go earlier. I'm curious. Also, just, I mean, you guys have alluded, I think, mostly to the, the solar end of it, or the generation stack on the capacity side. We're seeing some really robust.

Got it makes sense given kind of what we're seeing as well and just one last one as far as I know you asked about the renegotiation.

Sort of how those discussions go earlier I'm curious also just I mean, you guys have alluded I think mostly to the solar elevator the generation stack.

On the capacity side, we're seeing some really robust pricing there I think frankly.

Speaker 8: pricing there. I think, frankly, it's almost counterintuitive to what you would see on the cost deflation side for batteries themselves. I'm curious if you're seeing the same and then sort of how capacity prices or tolling agreements, if you will, on storage have evolved in parallel around these rates, gyrations, and the cost of equipment movements.

Almost counterintuitive to what you would see on the cost deflation side for batteries themselves Im curious if youre seeing the same and then sort of how capacity prices or tolling agreements. If you will on storage.

<unk> been parallel around these rates gyrations in the cost of equipment movement.

Speaker 4: Yeah, I'd be happy to take that. No, thanks for pointing that out. It is a really good time for capacity.

Jason why wouldn't you take it yes, I'll be happy to take that and thanks for pointing that out it. It is a really good time for capacity, especially in the west end and over two thirds of our of our portfolio is focused in the western United States, where capacity is in great demand in those.

Speaker 4: especially in the West, and over two-thirds of our portfolio is focused in the Western United States.

Speaker 4: where capacity is in great demand in those markets have have.

Speaker 4: have advanced rather rapidly. We are seeing significant demand that is having a positive impact on rates.

<unk> have.

Have have advanced rather rapidly.

We are seeing significant demand that is having a positive impact on rates.

Speaker 4: especially as we are negotiating multiple contracts and continue to see a demand.

Especially as as we are negotiating multiple multiple contracts and continue to see a demand.

Speaker 4: With every solar contract, we're seeing here in the West demand for capacity.

With every solar contract, we're seeing here in the west demand for capacity.

Speaker 4: The one fundamental driver for that is the limited interconnection capacity that's there.

One fundamental driver for that is that limited interconnection capacity. That's there. So when we have a solar project or other other interconnection capacity. The utilities are looking for the opportunity to.

Speaker 4: When we have a solar project or other interconnection capacity, the utilities are looking for the opportunity to put battery on there, and the demand remains super strong.

Put battery on there and the demand remains super strong.

Speaker 4: We will continue to have some positive announcements as it relates to battery as we move forward. As you can see from

We will continue to have some positive announcements as it relates to battery is as we move forward as you can see from from the information shared here today, a lot of battery attached to the solar that that we are announcing.

Speaker 4: from the information shared here today, a lot of battery attached to the solar that we are now

Speaker 8: Got it. All right. Thanks. I appreciate it. I will definitely take the rest offline this time. I promise. Have a good one.

Got it alright. Thanks, I appreciate it I will definitely take the rest offline. This time, our progress have a good luck.

Speaker 1: Thank you. I will now hand over to Gilad Yavez, CEO and co-founder of Enlight for closing remarks.

Right.

Thank you I will now hand over to Gavin CEO and co founder of a light for closing remarks.

Speaker 6: Thank you, operator. Thank you everyone for your time. We see strong fundamentals for our project and are excited about the year ahead as we execute an above market project returns and above market growth. Thank you, see you next quarter.

Thank you operator, thank you everyone for your time, we see strong fundamentals for a project and are excited about the year heads as we execute an above market project returns and above market growth. Thank you see you next quarter.

Speaker 1: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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Okay.

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So.

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