----

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|  | ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|------------------------------------------------------------------------------------------------|

|  | ☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|--------------------------------------------------------------------------------------|

|  | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|------------------------------------------------------------------------------------------|

|  | ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--|---------|---------------------------------------------------------------------------------------------|

| Title of each class                            |   | Name of each exchange on which registered |
|------------------------------------------------|--------|-------------------------------------------|
| Ordinary Shares, par value NIS 10.00 per share |   | NYSE American LLC                         |

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----

----

----

| 1 | Does not include a total of 258,046 ordinary shares held at that date as treasury shares under Israeli law, all of which were repurchased by Ellomay. For so long as such treasury shares are owned by Ellomay they have no rights and, accordingly, are neither eligible to participate in or receive any future dividends which may be paid to Ellomay’s shareholders nor are they entitled to participate in, be voted at or be counted as part of the quorum for, any meetings of Ellomay’s shareholders. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

|                                            | Page |
|-------------------------------------------------|------|
| Explanatory Note                                | 5    |
| Item 18:    Financial Statements | 5    |
| Item 19:    Exhibits             | 6    |

----

----

| Number |   | Description                                                                                                                                                                                                                                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 1.1    |   | Memorandum of Association of the Registrant (translated from Hebrew), reflecting amendments through June 9, 2011*(1)                                                                                                                       |
| 1.2    |        | Second Amended and Restated Articles of the Registrant, reflecting amendments through June 20, 2012(1)                                                                                                                                     |
| 2.1    |        | Specimen Certificate for ordinary shares(2)                                                                                                                                                                                                |
| 4.1    |        | 1998 Share Option Plan for Non-Employee Directors(3)                                                                                                                                                                                       |
| 4.2    |        | 2000 Stock Option Plan(1)                                                                                                                                                                                                                  |
| 4.3    |        | Form of Indemnification Agreement between the Registrant and its officers and directors(1)                                                                                                                                                 |
| 4.4    |        | Form of Exemption Letter between the Registrant and its officers and directors(1)                                                                                                                                                          |
| 4.5    |        | Form of Registration Rights Agreement, dated September 12, 2005, among the Registrant, certain investors, Bank Hapoalim, Bank Leumi and Israel Discount Bank(4)                                                                            |
| 4.6    |        | Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., effective as of March 31, 2008(5)                                                |
| 4.7    |        | Giaché Building Right Agreement (summary of Italian version)(6)*                                                                                                                                                                      |
| 4.8    |        | Massaccesi Building Right Agreement (summary of Italian version)(6)*                                                                                                                                                                       |
| 4.9    |        | Troia 8 Building Right Agreement (summary of Italian version)(6)*                                                                                                                                                                          |
| 4.10   |        | Troia 9 Building Right Agreement (summary of Italian version)(6)*                                                                                                                                                                          |
| 4.11   |        | Investment Agreement, among U. Dori Group Ltd., U. Dori Energy Infrastructures Ltd. (currently Amos Luzon Entrepreneurship and Energy Group Ltd.) and Ellomay Clean Energy Ltd. , dated November 25, 2010 (summary of Hebrew version)(6)*  |
| 4.12   |        | Shareholders Agreement, among U. Dori Group Ltd. (currently Amos Luzon Entrepreneurship and Energy Group Ltd.), Ellomay Clean Energy Ltd. and U. Dori Energy Infrastructures Ltd., dated November 25, 2010 (summary of Hebrew version)(6)* |
| 4.13   |        | Acquafresca Building Right Agreement (summary of Italian version)(2)*                                                                                                                                                                      |
| 4.14   |        | D’Angella Building Right Agreement (summary of Italian version)(2)*                                                                                                                                                                  |
| 4.15   |        | Rinconada II Building Right Agreement (summary of Spanish version)(2)*                                                                                                                                                                     |
| 4.16   |        | Amendment No. 1 to Management Services Agreement, by and among the Registrant, Kanir Joint Investments (2005) Limited Partnership and Meisaf Blue & White Holdings Ltd., dated June 18, 2013(7)                                        |
| 4.17   |        | Soleco Building Right Agreement (summary of Italian version)(7)*                                                                                                                                                                           |
| 4.18   |        | Tecnoenergy Building Right Agreement (summary of Italian version)(7)*                                                                                                                                                                      |
| 4.19   |        | Deed of Trust between the Registrant and Hermetic Trust (1975) Ltd., governing the Company’s Series A Debentures, dated December 30, 2013 (translation of Hebrew version)(7)*                                                        |
| 4.20   |        | Rodríguez I Lease Agreements (summary of Spanish version)(3)*                                                                                                                                                                         |

----

| Number |   | Description                                                                                                                                                                     |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.21   |        | Rodríguez II Lease Agreements (summary of Spanish version)(3)*                                                                                                             |
| 4.22   |        | Fuente Librilla Lease Agreement (summary of Spanish version)(3)*                                                                                                                |
| 4.23   |        | Updated Directors and Officers Compensation Policy, adopted July 5, 2016(8)                                                                                                     |
| 4.24   |        | Deed of Trust between the Registrant and Hermetic Trust (1975) Ltd., governing the Company’s Series B Debentures, dated March 1, 2017 (translation of Hebrew version)*(9) |
| 4.25   |        | Talmei Yosef Lease Agreement (summary of Hebrew version)(8)*                                                                                                                    |
| 8      |        | List of Subsidiaries of the Registrant(8)                                                                                                                                       |
| 12.1   |        | Certification of Principal Executive Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)                                                          |
| 12.2   |        | Certification of Principal Financial Officer required by Rule 13a-14(a) and Rule 15d-14(a) (Section 302 Certification)                                                          |
| 13     |        | Certification of Principal Executive Officer and Principal Financial Officer required by Rule 13a-14(b) and Rule 15d-14(b) (Section 906 Certification)                          |
| 15.1   |        | Consent of Somekh Chaikin, Member Firm of KPMG International, Independent Registered Public Accounting Firm with respect to our financial statements(8)                         |
| 15.2   |   | Consent of Somekh Chaikin, Member Firm of KPMG International, Independent Registered Public Accounting Firm with respect to the financial statements of Dorad Energy Ltd.       |

| * | The original language version is on file with the Registrant and is available upon request. |
|---|---------------------------------------------------------------------------------------------|

| (1) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2012 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (2) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2011 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (3) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2014 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (4) | Included in the Registrant’s Form 6-K dated October 14, 2005 and incorporated by reference herein. |
|-----|----------------------------------------------------------------------------------------------------------|

| (5) | Included in the Registrant’s Form 6-K dated December 1, 2008 and incorporated by reference herein. |
|-----|----------------------------------------------------------------------------------------------------------|

| (6) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2010 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (7) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2013 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (8) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2017 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

| (9) | Previously filed with the Registrant’s Form 20-F for the year ended December 31, 2016 and incorporated by reference herein. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------|

----

|   | Ellomay Capital Ltd.  |
|--------|----------------------------|
|   | By:                        | /*s/ Ran Fridrich* |
|   |                       | *Ran Fridrich* |
|   |                       | *Chief Executive Officer and Director* |

----

----

----

|                              |         |
|-----------------------------------|--------------|
| Auditors' Report                  | FD-2         |
|                              |         |
| Statements of Financial Position  | FD-3         |
|                              |         |
| Statements of Profit or Loss      | FD-4         |
|                              |         |
| Statements of Changes in Equity   | FD-5         |
|                              |         |
| Statements of Cash Flows          | FD-6         |
|                              |         |
| Notes to the Financial Statements | FD-7 - FD-49 |

----

----

----

|                                                         |   |   |       |   | December 31   |   |      | December 31   |   |
|--------------------------------------------------------------|--------|--------|------------|--------|---------------|--------|-----------|---------------|--------|
|                                                         |   |   |       |   | 2017          |   |      | 2016          |   |
|                                                         |   | Note   |       |   | NIS thousands |   |      | NIS thousands |   |
| Current assets                                               |   |   |       |   |          |   |      |          |   |
| Cash and cash equivalents                                    |   |   | 4          |   |          |   | 184,182   |          |   |   | 80,967 |   |
| Trade receivables                                            |   |   |       |   |          |   | 330,397   |          |   |   | 294,351 |   |
| Other receivables                                            |   |   | 5          |   |          |   | 83,289    |          |   |   | 37,174 |   |
| Total current assets                                         |   |   |       |   |          |   | 597,868   |          |   |   | 412,492 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Non-current assets                                           |   |   |       |   |          |   |      |          |   |   |   |   |
| Restricted deposit                                           |   |   | 11A1B      |   |          |   | 405,306   |          |   |   | 411,574 |   |
| Prepaid expenses                                             |   |   | 11A2, 11A5 |   |          |   | 43,821    |          |   |   | 45,938 |   |
| Fixed assets                                                 |   |   | 6          |   |          |   | 4,009,008 |          |   |   | 4,170,151 |   |
| Intangible assets                                            |   |   |       |   |          |   | 6,097     |          |   |   | 8,551 |   |
| Total non-current assets                                     |   |   |       |   |          |   | 4,464,232 |          |   |   | 4,636,214 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Total assets                                                 |   |   |       |   |          |   | 5,062,100 |          |   |   | 5,048,706 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Current liabilities                                          |   |   |       |   |          |   |      |          |   |   |   |   |
| Current maturities of loans from banks                       |   |   | 7          |   |          |   | 203,819   |          |   |   | 197,389 |   |
| Current maturity of loans from related parties               |   |   | 9          |   |          |   | 140,464   |          |   |   | 80,000 |   |
| Trade payables                                               |   |   |       |   |          |   | 415,798   |          |   |   | 293,613 |   |
| Other payables                                               |   |   | 8          |   |          |   | 5,649     |          |   |   | 9,152 |   |
| Financial derivatives                                        |   |   |       |   |          |   | 1,191     |          |   |   | - |   |
| Total current liabilities                                    |   |   |       |   |          |   | 766,921   |          |   |   | 580,154 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Non-current liabilities                                      |   |   |       |   |          |   |      |          |   |   |   |   |
| Loans from banks                                             |   |   | 7          |   |          |   | 3,187,873 |          |   |   | 3,367,832 |   |
| Loans from related parties                                   |   |   | 9          |   |          |   | 54,764    |          |   |   | 151,638 |   |
| Provision for dismantling and restoration                    |   |   |       |   |          |   | 36,239    |          |   |   | 35,700 |   |
| Deferred tax liabilities, net                                |   |   | 10         |   |          |   | 89,298    |          |   |   | 65,618 |   |
| Liabilities for employee benefits, net                       |   |   |       |   |          |   | 160       |          |   |   | 160 |   |
| Total non-current liabilities                                |   |   |       |   |          |   | 3,368,334 |          |   |   | 3,620,948 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Equity                                                       |   |   | 12         |   |          |   |      |          |   |   |   |   |
| Share capital                                                |   |   |       |   |          |   | 11        |          |   |   | 11 |   |
| Share premium                                                |   |   |       |   |          |   | 642,199   |          |   |   | 642,199 |   |
| Capital reserve for activities with controlling shareholders |   |   |       |   |          |   | 3,748     |          |   |   | 3,748 |   |
| Retained earnings                                            |   |   |       |   |          |   | 280,887   |          |   |   | 201,646 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Total equity                                                 |   |   |       |   |          |   | 926,845   |          |   |   | 847,604 |   |
|                                                         |   |   |       |   |          |   |      |          |   |   |   |   |
| Total liabilities and equity                                 |   |   |       |   |          |   | 5,062,100 |          |   |   | 5,048,706 |   |

| /s/ Erez Halfon    |   | /s/ Eli Asulin          |   | /s/ David Bitton        |
|--------------------|--------|-------------------------|--------|-------------------------|
| Erez Halfon        |   | Eli Asulin              |   | David Bitton            |
| Chairman of the    |   | Chief Executive Officer |   | Chief Financial Officer |
| Board of Directors |   |                    |   |                    |

----

----

|                                             |   |   |   | Year ended December 31, |      |
|--------------------------------------------------|--------|--------|--------|-------------------------|-----------|
|                                             |   |   |   | 2017                    |      |   | 2016 |   |   | 2015 |   |
|                                             | Note   |   |   | NIS thousands           |      |   | NIS thousands |   |   | NIS thousands |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |
| Revenues                                         |   |   |   |                    | 2,523,263 |   |   |   | 2,299,565 |   |   |   | 2,356,832 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |
| Operating costs of the power plant               |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |
| Energy costs                                     |   |   |   |                    | 616,221   |   |   |   | 550,401 |   |   |   | 613,689 |   |
| Electricity purchase and infrastructure services |   |   |   |                    | 1,212,431 |   |   |   | 1,104,826 |   |   |   | 1,000,947 |   |
| Depreciation and amortization                    |   |   |   |                    | 208,705   |   |   |   | 209,057 |   |   |   | 209,953 |   |
| Other operating costs                            |   |   |   |                    | 122,345   |   |   |   | 141,132 |   |   |   | 149,808 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |
| Total cost of power plant                        |   |   |   |                    | 2,159,702 |   |   |   | 2,005,416 |   |   |   | 1,974,397 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |
| Profit from operating the power plant            |   |   |   |                    | 363,561   |   |   |   | 294,149 |   |   |   | 382,435 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |
| General and administrative expenses              |   |   | 13     |                    |      |   | 18,712 |   |   |   | 19,178 |   |   |   | 25,681 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit                                 |   |   |   |                    |      |   | 344,849 |   |   |   | 274,971 |   |   |   | 356,754 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Financing income                                 |   |   |   |                    |      |   | 3,195 |   |   |   | 7,025 |   |   |   | 476 |   |
| Financing expenses                               |   |   |   |                    |      |   | 245,122 |   |   |   | 226,054 |   |   |   | 216,808 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Financing expenses, net                          |   |   | 14     |                    |      |   | 241,927 |   |   |   | 219,029 |   |   |   | 216,332 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Profit before taxes on income                    |   |   |   |                    |      |   | 102,922 |   |   |   | 55,942 |   |   |   | 140,422 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Taxes on income                                  |   |   | 10     |                    |      |   | 23,681 |   |   |   | 4,736 |   |   |   | 37,607 |   |
|                                             |   |   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |
| Profit for the year                              |   |   |   |                    |      |   | 79,241 |   |   |   | 51,206 |   |   |   | 102,815 |   |

----

----

|                                 |   |          |   |   |          |   |    | Capital         |   |   |          |   |   |          |    |
|--------------------------------------|--------|---------------|--------|--------|---------------|--------|---------|-----------------|--------|--------|---------------|--------|--------|---------------|---------|
|                                 |   |          |   |   |          |   |    | reserve for     |   |   |          |   |   |          |    |
|                                 |   |          |   |   |          |   |    | activities with |   |   |          |   |   |          |    |
|                                 |   |          |   |   | Share         |   |    | controlling     |   |   | Retained      |   |   |          |    |
|                                      |   | Share capital |   |   | premium       |   |    | shareholders    |   |   | earnings      |   |   | Total equity  |    |
|                                      |   | NIS thousands |   |   | NIS thousands |   |    | NIS thousands   |   |   | NIS thousands |   |   | NIS thousands |    |
| For the year ended December 31, 2017 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |
| Balance as at January 1, 2017   |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 201,646 |   |   |   | 847,604 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Profit for the year                  |   |          | -      |   |          |   | -       |            |   |   | -             |   |   |          | 79,241  |   |   |   | 79,241 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Balance as at December 31, 2017 |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 280,887 |   |   |   | 926,845 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| For the year ended December 31, 2016 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Balance as at January 1, 2016   |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 150,440 |   |   |   | 796,398 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Profit for the year                  |   |          | -      |   |          |   | -       |            |   |   | -             |   |   |          | 51,206  |   |   |   | 51,206 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Balance as at December 31, 2016 |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 201,646 |   |   |   | 847,604 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| For the year ended December 31, 2015 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Balance as at January 1, 2015   |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 47,625  |   |   |   | 693,583 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Profit for the year                  |   |          | -      |   |          |   | -       |            |   |   | -             |   |   |          | 102,815 |   |   |   | 102,815 |   |
|                                 |   |          |   |   |          |   |    |            |   |   |          |   |   |          |    |   |   |   |   |   |
| Balance as at December 31, 2015 |   |          | 11     |   |          |   | 642,199 |            |   |   | 3,748         |   |   |          | 150,440 |   |   |   | 796,398 |   |

----

----

|                                                                   |   | Year ended December 31, |     |
|------------------------------------------------------------------------|--------|-------------------------|----------|
|                                                                   |   | 2017                    |     |   | 2016 |   |   | 2015 |   |
|                                                                   |   | NIS thousands           |     |   | NIS thousands |   |   | NIS thousands |   |
| Cash flows from operating activities:                                  |   |                    |     |   |   |   |   |   |   |
| Profit for the year                                                    |   |                    | 79,241   |   |   |   | 51,206 |   |   |   | 102,815 |   |
| Adjustments:                                                           |   |                    |     |   |   |   |   |   |   |   |   |   |
| Depreciation, amortization and fuel consumption                        |   |                    | 286,542  |   |   |   | 238,484 |   |   |   | 237,295 |   |
| Taxes on income                                                        |   |                    | 23,681   |   |   |   | 4,736 |   |   |   | 37,607 |   |
| Financing expenses, net                                                |   |                    | 241,927  |   |   |   | 219,029 |   |   |   | 216,332 |   |
|                                                                   |   |                    | 552,150  |   |   |   | 462,249 |   |   |   | 491,234 |   |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Change in trade receivables                                            |   |                    | (35,465  | ) |   |   | (14,761 | ) |   |   | 49,693 |   |
| Change in other receivables                                            |   |                    | (84,857  | ) |   |   | (5,179 | ) |   |   | (20,876 | ) |
| Change in trade payables                                               |   |                    | 123,045  |   |   |   | 48,807 |   |   |   | (129,385 | ) |
| Change in other payables                                               |   |                    | (2,669   | ) |   |   | 677 |   |   |   | (6,842 | ) |
| Change in employee benefits, net                                       |   |                    | -        |   |   |   | - |   |   |   | 55 |   |
|                                                                   |   |                    | 54       |   |   |   | 29,544 |   |   |   | (107,355 | ) |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Net cash provided by operating activities                              |   |                    | 631,445  |   |   |   | 542,999 |   |   |   | 486,694 |   |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                  |   |                    |     |   |   |   |   |   |   |   |   |   |
| Proceeds from (payment for) settlement of financial derivatives        |   |                    | (10,596  | ) |   |   | (2,017 | ) |   |   | 9,609 |   |
| Release of pledged deposits                                            |   |                    | -        |   |   |   | 29,486 |   |   |   | 38,679 |   |
| Insurance proceeds in respect of damage to fixed asset                 |   |                    | 38,742   |   |   |   | - |   |   |   | - |   |
| Investment in long-term restricted deposits                            |   |                    | (34,000  | ) |   |   | (143,891 | ) |   |   | (135,000 | ) |
| Release of long-term restricted deposit                                |   |                    | 25,790   |   |   |   | 70,000 |   |   |   | - |   |
| Long-term prepaid expenses                                             |   |                    | -        |   |   |   | (1,056 | ) |   |   | - |   |
| Investment in fixed assets                                             |   |                    | (121,361 | ) |   |   | (25,415 | ) |   |   | (447,338 | ) |
| Investment in intangible assets                                        |   |                    | (413     | ) |   |   | (2,804 | ) |   |   | (1,767 | ) |
| Interest received                                                      |   |                    | 1,268    |   |   |   | 624 |   |   |   | 115 |   |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Net cash used in investing activities                                  |   |                    | (100,570 | ) |   |   | (75,073 | ) |   |   | (535,702 | ) |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                  |   |                    |     |   |   |   |   |   |   |   |   |   |
| Receipt of long-term loans from related parties                        |   |                    | -        |   |   |   | 16,689 |   |   |   | 23,208 |   |
| Receipt of long-term loans from banks                                  |   |                    | -        |   |   |   | 242,772 |   |   |   | 318,100 |   |
| Repayment of loans from related parties                                |   |                    | (39,628  | ) |   |   | (147,219 | ) |   |   | - |   |
| Repayment of loans from banks                                          |   |                    | (161,668 | ) |   |   | (143,896 | ) |   |   | (105,121 | ) |
| Interest paid                                                          |   |                    | (227,530 | ) |   |   | (408,071 | ) |   |   | (206,032 | ) |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Net cash provided by (used in) financing activities                    |   |                    | (428,826 | ) |   |   | (439,725 | ) |   |   | 30,155 |   |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                   |   |                    | 102,049  |   |   |   | 28,201 |   |   |   | (18,853 | ) |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Effect of exchange rate fluctuations on cash and cash equivalents |   |                    | 1,166    |   |   |   | 872 |   |   |   | (1,031 | ) |
| Cash and cash equivalents at beginning of year                         |   |                    | 80,967   |   |   |   | 51,894 |   |   |   | 71,778 |   |
|                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents at end of year                               |   |                    | 184,182  |   |   |   | 80,967 |   |   |   | 51,894 |   |

----

----

|  | · | Related party as defined in international accounting standard (2009) 24 regarding related parties. |
|--|--------|----------------------------------------------------------------------------------------------------|

|  | · | Interested parties as defined in paragraph 1 of the definition of “interested parties” in a cooperation section 1 of the securities law 1968. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | C. | Licenses and legal environment |
|--|----|--------------------------------|

|  | 1. | The construction of the power plant was officially designated a “National Infrastructure” Project, as defined in paragraph 1 of the Planning and Building Law-1965 by the Prime Minister, Minister of Finance and Minister of the Interior. In July 2009, the Licensing Authority of the National Planning and Construction Board for National Infrastructures approved the building permit for the establishment of a power station. (Building License No. 2-01-2008). |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | On July 9, 2014 and on June 1, 2015, the company submitted to the High Court two petitions against the Public Utilities Authority - Electricity (“PUA”) and the Israeli Electric Corporation Ltd. ("IEC") in view of the PUA’s intention to make a decision which includes, inter alia, to require the private electricity producers to pay IEC a general tariff which referred to by the PUA as “system costs”. The Company’s claims which were raised in the petitions were, inter alia, that the decision is contrary to the explicit instructions of the Electricity Sector Law, 1996, with respect to the manner of determining tariffs by the PUA, also, it has the potential to change the rules of the game established by the PUA and in addition severely undermines the principle of reliance of the Company, the financing entities and other third parties who relied on the information and activities of the PUA. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | 2. | (cont’d) |
|--|----|----------------|

|  | 3. | On January 21, 2015 PUA published a summary decision regarding “Electricity Rates for Customers of IEC in 2015” which includes a reduction of the rates for the Company’s customers. Pursuant to the decision the rates of the manufacturing component which serves as the basis for charging the Company’s customers and to which the gas price is linked, were reduced by about 9% as from February 1, 2015. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|  | 3. | (cont’d) |
|--|----|----------------|

----

----

|  | · | Derivative financial instruments at fair value through profit or loss; |
|--|--------|------------------------------------------------------------------------|

|  | · | Deferred tax liabilities |
|--|--------|--------------------------|

|  | · | Provisions |
|--|--------|------------|

|  | D. | Use of estimates and judgments |
|--|----|--------------------------------|

----

----

----

----

|  | 1. | Non-derivative financial assets |
|--|----|---------------------------------|

----

----

|  | 1. | Non-derivative financial assets (cont’d) |
|--|----|------------------------------------------------|

|  | 2. | Non-derivative financial liabilities |
|--|----|--------------------------------------|

|  | 3. | Derivative financial instruments |
|--|----|----------------------------------|

|  | 4. | CPI-linked assets and liabilities that are not measured at fair value |
|--|----|-----------------------------------------------------------------------|

|  | 5. | Share capital |
|--|----|---------------|

----

----

|  | C. | Fixed assets |
|--|----|--------------|

|  | 1. | Recognition and measurement |
|--|----|-----------------------------|

|  | 2. | Subsequent costs |
|--|----|------------------|

|  | 3. | Depreciation |
|--|----|--------------|

----

----

|  | C. | Fixed assets (cont’d) |
|--|----|-----------------------------|

|  | 3. | Depreciation (cont’d) |
|--|----|-----------------------------|

|                                |                    | Depreciation |   |
|-------------------------------------|-------------------------|--------------|--------|
|                                |                    | rate         |   |
|                                |                    | (percentage) |   |
| Buildings and permanent connections |                    |         | 4      |   |
| Turbine components                  | 4 or by operating hours |         |
| Machinery, equipment and apparatus  |                    | mainly4      |   |
| Monitoring station                  |                    |         | 10     |   |
| Spare parts                         |                    |         | 4      |   |
| Backup diesel                       |                    | upon usage   |   |

|  | 1. | Recognition and measurement |
|--|----|-----------------------------|

|  | 2. | Subsequent expenditure |
|--|----|------------------------|

|  | 3. | Amortization |
|--|----|--------------|

----

----

|  | E. | Impairment |
|--|----|------------|

|  | 1) | Non derivative financial assets |
|--|----|---------------------------------|

|  | 2) | Non-financial assets |
|--|----|----------------------|

----

----

|  | G. | Provisions |
|--|----|------------|

|  | I. | Revenues |
|--|----|----------|

|  | J. | Taxes on Income |
|--|----|-----------------|

----

----

|  | M. | Financing income and expenses |
|--|----|-------------------------------|

----

----

|  | O. | New standards and interpretations not yet adopted |
|--|----|---------------------------------------------------|

|  | (1) | IFRS 9 (2014), Financial Instruments |
|--|-----|--------------------------------------|

|  | (2) | IFRS 15, Revenue from Contracts with Customers |
|--|-----|------------------------------------------------|

|  | (3) | IFRS 16, Leases |
|--|-----|-----------------|

|  | · | An increase in non-current assets and in financial liabilities. |
|--|--------|-----------------------------------------------------------------|

|  | · | An increase in operating profit and financing expenses. |
|--|--------|---------------------------------------------------------|

|  | · | Increase in operating cash flow and decrease in cash flow from financing activities. |
|--|--------|--------------------------------------------------------------------------------------|

----

----

|                   |   | December 31   |    |
|------------------------|--------|---------------|---------|
|                   |   | 2017          |    |   | 2016 |   |
|                   |   | NIS thousands |    |   | NIS thousands |   |
| Balance in banks       |   |          | 6       |   |   |   | 6 |   |
| Deposits on demand (*) |   |          | 184,176 |   |   |   | 80,961 |   |
|                   |   |          |    |   |   |   |   |   |
|                   |   |          | 184,182 |   |   |   | 80,967 |   |
|                                       |   | December 31   |   |
|--------------------------------------------|--------|---------------|--------|
|                                       |   | 2017          |   |   | 2016 |   |
|                                       |   | NIS thousands |   |   | NIS thousands |   |
| Government institutions                    |   |          | 6,656  |   |   |   | 262 |   |
| Receivables for warranty and insurance     |   |          | 55,921 |   |   |   | 25,751 |   |
| Advances to suppliers and prepaid expenses |   |          | 20,712 |   |   |   | 11,161 |   |
|                                       |   |          |   |   |   |   |   |   |
|                                       |   |          | 83,289 |   |   |   | 37,174 |   |

----

----

|                            |   |          |      |   | Furniture     |   |   | Leasehold    |   |   |   |   |
|---------------------------------|--------|---------------|-----------|--------|---------------|--------|--------|--------------|--------|--------|--------|--------|
|                            |   | Power plant   |      |   | and equipment |   |   | improvements |   |   | Total  |   |
|                            |   | NIS thousands |      |
| Cost                            |   |          |      |   |          |   |   |         |   |   |   |   |
| Balance as at January 1, 2016   |   |          | 4,739,535 |   |          |   | 2,393  |         |   |   | 736    |   |   |   | 4,742,664 |   |
| Additions                       |   |          | 16,882    |   |          |   | 103    |         |   |   | -      |   |   |   | 16,985 |   |
| Disposals                       |   |          | (26,174   | )      |          |   | -      |         |   |   | -      |   |   |   | (26,174 | ) |
| Balance as at December 31, 2016 |   |          | 4,730,243 |   |          |   | 2,496  |         |   |   | 736    |   |   |   | 4,733,475 |   |
| Additions                       |   |          | 128,513   |   |          |   | 42     |         |   |   | -      |   |   |   | 128,555 |   |
| Disposals                       |   |          | (59,190   | )      |          |   | -      |         |   |   | -      |   |   |   | (59,190 | ) |
| Balance as at December 31, 2017 |   |          | 4,799,566 |   |          |   | 2,538  |         |   |   | 736    |   |   |   | 4,802,840 |   |
|                            |   |          |      |   |          |   |   |         |   |   |   |   |   |   |   |   |
| Depreciation                    |   |          |      |   |          |   |   |         |   |   |   |   |   |   |   |   |
| Balance as at January 1, 2016   |   |          | 354,555   |   |          |   | 1,020  |         |   |   | 118    |   |   |   | 355,693 |   |
| Additions                       |   |          | 233,050   |   |          |   | 682    |         |   |   | 73     |   |   |   | 233,805 |   |
| Disposals                       |   |          | (26,174   | )      |          |   | -      |         |   |   | -      |   |   |   | (26,174 | ) |
| Balance as at December 31, 2016 |   |          | 561,431   |   |          |   | 1,702  |         |   |   | 191    |   |   |   | 563,324 |   |
| Additions                       |   |          | 251,294   |   |          |   | 347    |         |   |   | 74     |   |   |   | 251,715 |   |
| Disposals                       |   |          | (21,207   | )      |          |   | -      |         |   |   | -      |   |   |   | (21,207 | ) |
| Balance as at December 31, 2017 |   |          | 791,518   |   |          |   | 2,049  |         |   |   | 265    |   |   |   | 793,832 |   |
| Carrying amounts                |   |          |      |   |          |   |   |         |   |   |   |   |   |   |   |   |
| As at January 1, 2016           |   |          | 4,384,980 |   |          |   | 1,373  |         |   |   | 618    |   |   |   | 4,386,971 |   |
| As at December 31, 2016         |   |          | 4,168,812 |   |          |   | 794    |         |   |   | 545    |   |   |   | 4,170,151 |   |
| As at December 31, 2017         |   |          | 4,008,048 |   |          |   | 489    |         |   |   | 471    |   |   |   | 4,009,008 |   |

----

----

|                                                                |         |   |   |               |       |   | Carrying amount as at December 31 |   |
|---------------------------------------------------------------------|--------------|--------|--------|--------------------|------------|--------|-----------------------------------|--------|
| Currency and                                                        |         |   |   |               |       |   |                              |   |   |   |
|                                                                     | linkage base |   |   | Effective interest |       |   | 2017                              |   |   | 2016 |   |
|                                                                     |         |   |   | %                  |       |   | NIS thousands                     |   |   | NIS thousands |   |
| Loans from banks                                                    | CPI-linked   |   |   |               | 5.58%-5.77 | %      |                              |   | 3,391,692 |   |   |   | 3,565,221 |   |
| Less current maturities (including interest as at December 31) | NIS          |   |   |               |       |   |                              |   | (203,819 | ) |   |   | (197,389 | ) |
|                                                                |         |   |   |               |       |   |                              |   |   |   |   |   |   |   |
|                                                                |         |   |   |               |       |   |                              |   | 3,187,873 |   |   |   | 3,367,832 |   |
|                                                                                                                          |   | December 31   |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|
|                                                                                                                          |   | 2017          |   |   | 2016 |   |
|                                                                                                                          |   | NIS thousands |   |   | NIS thousands |   |
| Governmental institutions                                                                                                     |   |          | -      |   |   |   | 72 |   |
| Accrued expenses (*)                                                                                                          |   |          | 4,555  |   |   |   | 5,790 |   |
| Other payables                                                                                                                |   |          | 1,094  |   |   |   | 3,290 |   |
|                                                                                                                          |   |          |   |   |   |   |   |   |
|                                                                                                                          |   |          | 5,649  |   |   |   | 9,152 |   |
|                                                                                                                          |   |          |   |   |   |   |   |   |
| (*)          Including other payables due to related and interested parties |   |          | 680    |   |   |   | 4,140 |   |
|                                            |   | December 31   |     |
|-------------------------------------------------|--------|---------------|----------|
|                                            |   | 2017          |     |   | 2016 |   |
|                                            |   | NIS thousands |     |   | NIS thousands |   |
| Shareholders (1)                                |   |          |     |   |   |   |
| Eilat-Ashkelon Infrastructure Services Ltd. (2) |   |          | 74,011   |   |   |   | 85,680 |   |
| Zorlu Enerji Elektrik Uretim A.S. (2)           |   |          | 46,176   |   |   |   | 59,344 |   |
| U. Dori Energy Infrastructure Ltd. (2)          |   |          | 36,809   |   |   |   | 42,663 |   |
| Edelcom Ltd. (2)                                |   |          | 38,232   |   |   |   | 43,951 |   |
|                                            |   |          | 195,228  |   |   |   | 231,638 |   |
| Less current maturities (2)                     |   |          | (140,464 | ) |   |   | (80,000 | ) |
|                                            |   |          |     |   |   |   |   |   |
|                                            |   |          | 54,764   |   |   |   | 151,638 |   |

----

----

|  | 1. | In accordance with the agreement regarding the subordinated shareholders’ loans, the loans bear interest at the rate of 10% and are linked to the CPI. As at December 31, 2017, the amount of loans received including accrued interest is NIS 1,168 million, of which an amount of NIS 642 million was converted to equity during 2011-2013. The remaining balance is expected to be repaid in the future subject to compliance with financial covenants as specified in the financing agreements. See Note 11A(1)(a). |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | According to the financing agreements, two years after the date of commercial operation, and subject to the Company’s compliance with financial covenants and other commitments as specified in the agreement, it will be possible to repay shareholders’ loans. During 2017 the company repaid amount of NIS 50 million, NIS 11 million is repayment of interest and linkage differentials and the remaining balance of NIS 39 million is principle repayment. During 2016 the Company repaid amount of NIS 346 million out of approved amount of NIS 350 million and the remaining balance was repaid during 2017 (out of the approved amount NIS 204 million is repayment of interest and linkage differentials and the remaining balance of NIS 146 million is principle repayment). The Company expects to comply with the financial covenants and commitments provided in the financing agreements, and accordingly, after the report date, on January 7, 2018, the company repaid a shareholders’ loans in the amount of NIS 80 million and expect to repay an additional shareholders loan in the amount of NIS 60 million. Considering the above, the Company classified NIS 140 million as current maturities in the financial statements as at December 31, 2017 |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (1) | Presented hereunder are the tax rates relevant to the Company in the years 2015-2018: |
|--|-----|---------------------------------------------------------------------------------------|

----

|  | A. | Details regarding the tax environment of the Company (cont’d) |
|--|----|---------------------------------------------------------------------|

|  | (2) | On January 12, 2012 Amendment 188 to the Income Tax Ordinance (New Version) – 1961 (hereinafter – “the Ordinance”) was published in the Official Gazette. The amendment amended Section 87A to the Ordinance, and provides a temporary order whereby Accounting Standard No. 29 “Adoption of International Financial Reporting Standards (IFRS)” that was issued by the Israel Accounting Standards Board shall not apply when determining the taxable income for the tax years 2010-2011 even if this standard was applied when preparing the financial statements (hereinafter – “the Temporary Order”). On July 31, 2014 Amendment 202 to the Ordinance was issued, by which the Temporary Order was extended to the 2012 and 2013 tax years. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | The Company is an “Industrial Company” as defined in the Encouragement of Industry (Taxes) 1969 and accordingly is entitled to certain benefits including accelerated depreciation. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                 |   | Year ended    |   |   | Year ended    |   |   | Year ended    |   |
|----------------------|--------|---------------|--------|--------|---------------|--------|--------|---------------|--------|
|                 |   | December 31,  |   |   | December 31,  |   |   | December 31,  |   |
|                 |   | 2017          |   |   | 2016          |   |   | 2015          |   |
|                 |   | NIS thousands |   |   | NIS thousands |   |   | NIS thousands |   |
|                 |   |          |   |   |          |   |   |          |   |
| Deferred tax expense |   |          | 23,681 |   |          |   | 4,736  |          |   |   | 37,607 |   |

----

----

|  | C. | Deferred tax liabilities and assets recognized |
|--|----|------------------------------------------------|

|                                                                   |   |          |     |   | Provisions  |   |         |            |   |   |    |   |
|------------------------------------------------------------------------|--------|---------------|----------|--------|-------------|--------|--------------|-----------------|--------|--------|---------|--------|
|                                                                   |   |          |     |   | and other   |   |         |            |   |   |    |   |
|                                                                        |   |          |     |   | timing      |   |         | Tax losses      |   |   |    |   |
|                                                                        |   | Fixed assets  |     |   | differences |   |         | carried forward |   |   | Total   |   |
|                                                                        |   | NIS thousands |     |
| Balance of deferred tax asset (liability) as at January 1, 2016   |   |          | (251,417 | )      |        |   |  13,452 |            |   |   | 177,084 |   |   |   | (60,881 | ) |
|                                                                   |   |          |     |   |        |   |         |            |   |   |    |   |   |   |   |   |
| Changes recognized in the profit and loss statements              |   |          | (146,564 | )      |        |   | (3,096       | )               |   |   | 135,768 |   |   |   | (13,890 | ) |
| impact of decrease in tax rate                                    |   |          | 44,931   |   |        |   | (1,525       | )               |   |   | (34,250 | )      |   |   | 9,154 |   |
|                                                                   |   |          | (101,633 | )      |        |   | (4,621       | )               |   |   | 101,518 |   |   |   | (4,736 | ) |
| Balance of deferred tax asset (liability) as at December 31, 2016 |   |          | (353,050 | )      |        |   | 8,830        |            |   |   | 278,602 |   |   |   | (65,617 | ) |
|                                                                   |   |          |     |   |        |   |         |            |   |   |    |   |   |   |   |   |
| Changes recognized in the profit and loss statements              |   |          | (135,287 | )      |        |   | 574          |            |   |   | 110,002 |   |   |   | (24,711 | ) |
| Impact of decrease in tax rate                                    |   |          | 5,636    |   |        |   | (23          | )               |   |   | (4,583  | )      |   |   | 1,030 |   |
|                                                                   |   |          | (129,651 | )      |        |   | 551          |            |   |   | 105,419 |   |   |   | (23,681 | ) |
| Balance of deferred tax asset (liability) as at December 31, 2017 |   |          | (482,701 | )      |        |   | 9,382        |            |   |   | 384,021 |   |   |   | (89,298 | ) |

----

----

|                                                                    |   | Year ended    |    |   | Year ended    |   |   | Year ended    |   |
|-------------------------------------------------------------------------|--------|---------------|---------|--------|---------------|--------|--------|---------------|--------|
|                                                                    |   | December 31,  |    |   | December 31,  |   |   | December 31,  |   |
|                                                                    |   | 2017          |    |   | 2016          |   |   | 2015          |   |
|                                                                    |   | NIS thousands |    |   | NIS thousands |   |   | NIS thousands |   |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Profit before taxes on income                                           |   |          | 102,922 |   |          |   | 55,942 |          |   |   | 140,422 |   |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Statutory tax rate of the company                                       |   |          | 24      | %      |          |   | 25     | %             |   |   | 26.5 | % |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Tax calculated according to the Company’s statutory tax rate |   |          | 24,701  |   |          |   | 13,985 |          |   |   | 37,212 |   |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Impact of decrease in tax rate                                          |   |          | (1,030  | )      |          |   | (9,154 | )             |   |   | - |   |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Non-deductible expenses and others                                      |   |          | 10      |   |          |   | (95    | )             |   |   | 395 |   |
|                                                                    |   |          |    |   |          |   |   |          |   |   |   |   |
| Income tax expense                                                      |   |          | 23,681  |   |          |   | 4,736  |          |   |   | 37,607 |   |

|  | E. | Tax losses carried forward |
|--|----|----------------------------|

|  | F. | Tax assessments |
|--|----|-----------------|

----

----

|  | A. | Commitments |
|--|----|-------------|

|  | 1. | Financing agreements |
|--|----|----------------------|

|  | 1. | The Company is required to maintain a debt coverage ratio of 1.10:1 over two consecutive calculation periods, and a debt coverage ratio of 1.05:1 over the entire calculation period. |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | The Company is required to maintain a minimal loan life coverage ratio of 1.10:1. |
|--|----|-----------------------------------------------------------------------------------|

|  | a. | Capital Injection Agreement and a Subordinated Loan Agreement |
|--|----|---------------------------------------------------------------|

----

----

|  | 1. | Financing agreements (cont’d) |
|--|----|-------------------------------------|

|  | a. | Capital Injection Agreement and a Subordinated Loan Agreement (cont’d) |
|--|----|------------------------------------------------------------------------------|

|  | b. | Bank accounts agreement |
|--|----|-------------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

|  | 3. | The EPC Agreement |
|--|----|-------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

|  | 5. | Gas Pipeline Agreement |
|--|----|------------------------|

|  | 6. | Petrol Storage agreement |
|--|----|--------------------------|

|  | 7. | Agreement to purchase natural gas |
|--|----|-----------------------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

|  | 8. | Agreement to sell electricity |
|--|----|-------------------------------|

|  | 9. | Property tax assessments in respect of the station |
|--|----|----------------------------------------------------|

----

----

|  | a) | Petition to Approve a Derivative Claim filed by Dori Energy and Hemi Raphael |
|--|----|------------------------------------------------------------------------------|

----

----

|  | a) | Petition to Approve a Derivative Claim filed by Dori Energy and Hemi Raphael (cont’d) |
|--|----|---------------------------------------------------------------------------------------------|

|  | b) | A letter from Zorlu |
|--|----|---------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

|  | c) | Petition to Approve a Derivative Claim filed by Edelcom |
|--|----|---------------------------------------------------------|

|  | d) | Statement of Claim filed by Edelcom |
|--|----|-------------------------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

----

----

|  | A. | Commitments (cont’d) |
|--|----|----------------------------|

----

----

|  | 1. | Fixed lien – A fixed lien and first priority mortgage and an assignment by way of lien on all the assets and rights with respect to the power plant in Ashkelon (“the Project”) and all as detailed in the mortgage deed and its appendices. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 2. | Floating lien - An unlimited first priority floating lien on all of the rights and assets of the borrower, any object and/or equipment and any other tangible or intangible asset of any type as specified in the financing agreements. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 3. | Lien on account of guarantees to third parties – a fixed lien, mortgage and assignment by way of a first priority lien, and a second priority lien on all assets and rights with respect to the account of guarantees including the funds, the securities, the documents and the notes of others of any type that will be deposited in the account from time to time, as detailed in the mortgage deed and all of its appendices. In addition, during 2015, deposited NIS 70 million to guarantees to third parties account. During 2016, following the cancellation of the guarantee the lien was removed and the deposit was released. |
|--|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | 4. | Lien on the land of the project – A fixed lien and first priority mortgage and an assignment by way of lien on all of the rights, existing and future, of the pledger with no exceptions, per the development agreement that was signed between the pledger and the Israel Lands Administration (“ILA”) with respect to the land. |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                               |   | Number of shares |    |
|------------------------------------|--------|------------------|---------|
|                               |   | December 31      |    |
|                               |   |             |    |   | Issued and |   |   | Issued and |   |
|                               |   | Authorized       |    |   | paid-in |   |   | paid-in |   |
|                               |   |             |    |   | 2017 |   |   | 2016 |   |
|                               |   |             |    |   |   |   |   |   |   |
| Ordinary shares of NIS 1 par value |   |             | 500,000 |   |   |   | 10,640 |   |   |   | 10,640 |   |

----

----

|                          |   | For the year ended December 31 |   |
|-------------------------------|--------|--------------------------------|--------|
|                          |   | 2017                           |   |   | 2016 |   |   | 2015 |   |
|                          |   | NIS thousands                  |   |
|                          |   |                           |   |
| Wages and related expenses    |   |                           | 9,562  |   |   |   | 9,407 |   |   |   | 13,347 |   |
| Rental and office maintenance |   |                           | 2,805  |   |   |   | 2,233 |   |   |   | 2,553 |   |
| Profession services           |   |                           | 5,800  |   |   |   | 6,592 |   |   |   | 8,927 |   |
| Depreciation                  |   |                           | 420    |   |   |   | 755 |   |   |   | 712 |   |
| Other                         |   |                           | 125    |   |   |   | 191 |   |   |   | 142 |   |
|                          |   |                           |   |   |   |   |   |   |   |   |   |   |
|                          |   |                           | 18,712 |   |   |   | 19,178 |   |   |   | 25,681 |   |
|                                           |   | Year ended December 31 |    |
|------------------------------------------------|--------|------------------------|---------|
|                                           |   | 2017                   |    |   | 2016 |   |   | 2015 |   |
|                                           |   | NIS thousands          |    |
|                                           |   |                   |    |
| Financing income                               |   |                   |    |   |   |   |   |   |   |
| Net foreign exchange gain                      |   |                   | -       |   |   |   | 3,944 |   |   |   | 124 |   |
| Other                                          |   |                   | 3,195   |   |   |   | 3,081 |   |   |   | 352 |   |
|                                           |   |                   |    |   |   |   |   |   |   |   |   |   |
|                                           |   |                   | 3,195   |   |   |   | 7,025 |   |   |   | 476 |   |
|                                           |   |                   |    |   |   |   |   |   |   |   |   |   |
| Financing expenses                             |   |                   |    |   |   |   |   |   |   |   |   |   |
| Revaluation of derivatives                     |   |                   | 11,788  |   |   |   | 2,663 |   |   |   | 835 |   |
| Interest expense on bank loans                 |   |                   | 200,883 |   |   |   | 186,139 |   |   |   | 168,887 |   |
| Interest expense on loans from related parties |   |                   | 18,676  |   |   |   | 35,267 |   |   |   | 40,791 |   |
| Net foreign exchange loss                      |   |                   | 12,452  |   |   |   | - |   |   |   | - |   |
| Bank commissions                               |   |                   | 785     |   |   |   | 1,455 |   |   |   | 2,858 |   |
| Other financing expenses                       |   |                   | 538     |   |   |   | 530 |   |   |   | 3,437 |   |
|                                           |   |                   |    |   |   |   |   |   |   |   |   |   |
|                                           |   |                   | 245,122 |   |   |   | 226,054 |   |   |   | 216,808 |   |
|                                           |   |                   |    |   |   |   |   |   |   |   |   |   |
| Net financing expenses                         |   |                   | 241,927 |   |   |   | 219,029 |   |   |   | 216,332 |   |

----

----

|  | A. | Overview |
|--|----|----------|

|  | — | Credit risk |
|--|---------|-------------|

|  | — | Liquidity risk |
|--|---------|----------------|

|  | — | Market risk |
|--|---------|-------------|

|                                               |   | December 31   |   |
|----------------------------------------------------|--------|---------------|--------|
|                                               |   | 2017          |   |   | 2016 |   |
|                                               |   | NIS thousands |   |
|                                               |   |          |   |
| Derivatives presented under current liability      |   |          |   |   |   |   |
| Forward exchange contracts used for economic hedge |   |          | (1,191 | ) |   |   | - |   |

|  | B. | Risk management framework |
|--|----|---------------------------|

|  | C. | Credit Risk |
|--|----|-------------|

----

----

|  | C. | Credit Risk (cont’d) |
|--|----|----------------------------|

|  | D. | Liquidity risk |
|--|----|----------------|

----

----

|  | D. | Liquidity risk (cont’d) |
|--|----|-------------------------------|

|                                 |   | December 31, 2017 |      |
|--------------------------------------|--------|-------------------|-----------|
|                                 |   | Carrying          |      |   | Contractual |   |   | 6 months |   |   |   |   |   |   |   |   |   |   |   | More than |   |
|                                 |   | amount            |      |   | cash flows |   |   | or less |   |   | 6-12 months |   |   | 1-2 years |   |   | 2-5 years |   |   | 5 years |   |
|                                 |   | NIS thousands     |      |
| Non-derivative financial liabilities |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade payables                       |   |              | 415,798   |   |   |   | 415,798 |   |   |   | 415,798 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other payables                       |   |              | 2,264     |   |   |   | 2,264 |   |   |   | 2,264 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans from banks                     |   |              | 3,391,692 |   |   |   | 4,690,040 |   |   |   | 189,589 |   |   |   | 176,932 |   |   |   | 371,251 |   |   |   | 1,126,690 |   |   |   | 2,825,578 |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans from related parties           |   |              | 195,228   |   |   |   | 225,275 |   |   |   | 140,464 |   |   |   | - |   |   |   | 84,811 |   |   |   | - |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |              | 4,004,982 |   |   |   | 5,333,377 |   |   |   | 748,115 |   |   |   | 176,932 |   |   |   | 456,062 |   |   |   | 1,126,690 |   |   |   | 2,825,578 |   |

----

----

|  | D. | Liquidity risk (cont’d) |
|--|----|-------------------------------|

|                                 |   | December 31, 2016 |      |
|--------------------------------------|--------|-------------------|-----------|
|                                 |   | Carrying          |      |   | Contractual |   |   | 6 months |   |   |   |   |   |   |   |   |   |   |   | More than |   |
|                                 |   | amount            |      |   | cash flows |   |   | or less |   |   | 6-12 months |   |   | 1-2 years |   |   | 2-5 years |   |   | 5 years |   |
|                                 |   | NIS thousands     |      |
| Non-derivative financial liabilities |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trade payables                       |   |              | 293,613   |   |   |   | 293,613 |   |   |   | 293,613 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other payables                       |   |              | 6,410     |   |   |   | 6,410 |   |   |   | 6,410 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans from banks                     |   |              | 3,565,221 |   |   |   | 5,054,106 |   |   |   | 188,000 |   |   |   | 176,066 |   |   |   | 366,521 |   |   |   | 1,106,546 |   |   |   | 3,216,973 |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans from related parties           |   |              | 231,638   |   |   |   | 278,237 |   |   |   | 50,000 |   |   |   | 30,000 |   |   |   | 80,000 |   |   |   | 118,237 |   |   |   | - |   |
|                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                 |   |              | 4,096,882 |   |   |   | 5,632,366 |   |   |   | 538,023 |   |   |   | 206,066 |   |   |   | 446,521 |   |   |   | 1,224,783 |   |   |   | 3,216,973 |   |

----

----

|  | E. | Market risk |
|--|----|-------------|

|  | (1) | Linkage and foreign currency risk |
|--|-----|-----------------------------------|

|  | (a) | The exposure to linkage and foreign currency risk |
|--|-----|---------------------------------------------------|

|   |   | December 31, 2017 |   |   |     |   |
|--------|--------|-------------------|--------|--------|----------|--------|
|   |   | Non-financial     |   |   | Unlinked |   |   | CPI-linked |   |   | US Dollar |   |   | EURO |   |   | Total |   |
|   |   | NIS thousand      |   |
|   |   |              |        |   |     |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |   |   |  |   |
| Financial assets and financial liabilities:                                                                          |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|------------|--------|--------|--------|---------|--------|--------|--------|
| Current assets:                                                                                                           |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |
| Cash and cash equivalents                                                                                                 |   |   | -         |   |   |   | 171,429 |   |   |   | -          |   |   |   | 12,719  |   |   |   | 34 |   |   |   | 184,182 |   |
| Trade receivables                                                                                                         |   |   |      |   |   |   | 330,396 |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 330,396 |   |
| Other receivables                                                                                                         |   |   | 83,289    |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 83,289 |   |
|                                                                                                                      |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Non-current assets:                                                                                                       |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Restricted deposits                                                                                                       |   |   | -         |   |   |   | 272,162 |   |   |   | -          |   |   |   | 133,144 |   |   |   | - |   |   |   | 405,306 |   |
| Prepaid expenses                                                                                                          |   |   | 43,821    |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 43,821 |   |
| Fixed assets                                                                                                              |   |   | 4,009,008 |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 4,009,008 |   |
| Intangible assets                                                                                                         |   |   | 6,097     |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 6,097 |   |
|                                                                                                                      |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                      |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Current maturities of loans from banks                                                                               |   |   | -         |   |   |   | -       |   |   |   | 203,819    |   |   |   | -       |   |   |   | - |   |   |   | 203,819 |   |
| Current maturities of loans from related parties                                                                     |   |   | -         |   |   |   | -       |   |   |   | 140,464    |   |   |   | -       |   |   |   | - |   |   |   | 140,464 |   |
| Trade payables                                                                                                            |   |   | -         |   |   |   | 350,333 |   |   |   | -          |   |   |   | 65,465  |   |   |   | - |   |   |   | 415,798 |   |
| Other accounts payable                                                                                                    |   |   | 3,385     |   |   |   | 1,049   |   |   |   | -          |   |   |   | 1,215   |   |   |   | - |   |   |   | 5,649 |   |
| Financial derivatives                                                                                                     |   |   | -         |   |   |   | -       |   |   |   | -          |   |   |   | 1,191   |   |   |   | - |   |   |   | 1,191 |   |
|                                                                                                                      |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Non-current liabilities:                                                                                                  |   |   |      |   |   |   |    |   |   |   |       |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Deferred tax liabilities                                                                                                  |   |   | 89,297    |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 89,297 |   |
| Provisions for dismantling and restoration                                                                           |   |   | 36,239    |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 36,239 |   |
| Loans from banks                                                                                                          |   |   | -         |   |   |   | -       |   |   |   | 3,187,873  |   |   |   | -       |   |   |   | - |   |   |   | 3,187,873 |   |
| Long-term loans from related parties                                                                                 |   |   | -         |   |   |   | -       |   |   |   | 54,764     |   |   |   | -       |   |   |   | - |   |   |   | 54,764 |   |
| Liabilities for employee benefits, net                                                                               |   |   | 160       |   |   |   | -       |   |   |   | -          |   |   |   | -       |   |   |   | - |   |   |   | 160 |   |
| Total exposure in statement of financial position in respect of financial assets and financial liabilities |   |   | 4,013,134 |   |   |   | 422,605 |   |   |   | (3,586,920 | )      |   |   | 77,992  |   |   |   | 34 |   |   |   | 926,845 |   |

----

----

|  | E. | Market risk (cont’d) |
|--|----|----------------------------|

|  | (1) | Linkage and foreign currency risks (cont’d) |
|--|-----|---------------------------------------------------|

|  | (a) | The exposure to linkage and foreign currency risk (cont’d) |
|--|-----|------------------------------------------------------------------|

|                                                                                                                 |   | December 31, 2016 |      |
|----------------------------------------------------------------------------------------------------------------------|--------|-------------------|-----------|
|                                                                                                                 |   | Non-financial     |      |   | Unlinked |   |   | CPI-linked |   |   | US Dollar |   |   | Total |   |
|                                                                                                                 |   | NIS thousand      |      |
|                                                                                                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial assets and financial liabilities:                                                                     |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Current assets:                                                                                                      |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                            |   |              | -         |   |   |   | 74,973 |   |   |   | - |   |   |   | 5,994 |   |   |   | 80,967 |   |
| Trade receivables                                                                                                    |   |              | -         |   |   |   | 294,351 |   |   |   | - |   |   |   | - |   |   |   | 294,351 |   |
| Other receivables                                                                                                    |   |              | 37,174    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 37,174 |   |
|                                                                                                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-current assets:                                                                                                  |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted deposits                                                                                                  |   |              | -         |   |   |   | 272,280 |   |   |   | - |   |   |   | 139,294 |   |   |   | 411,574 |   |
| Prepaid expenses                                                                                                     |   |              | 45,938    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 45,938 |   |
| Fixed assets                                                                                                         |   |              | 4,170,151 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 4,170,151 |   |
| Intangible assets                                                                                                    |   |              | 8,551     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,551 |   |
|                                                                                                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current maturities of loans from banks                                                                          |   |              | -         |   |   |   | - |   |   |   | 197,389 |   |   |   | - |   |   |   | 197,389 |   |
| Current maturities of loans from related parties                                                                |   |              | -         |   |   |   | - |   |   |   | 80,000 |   |   |   | - |   |   |   | 80,000 |   |
| Trade payables                                                                                                       |   |              | -         |   |   |   | 241,469 |   |   |   | - |   |   |   | 52,144 |   |   |   | 293,613 |   |
| Other accounts payable                                                                                               |   |              | 2,742     |   |   |   | 1,610 |   |   |   | - |   |   |   | 4,800 |   |   |   | 9,152 |   |
|                                                                                                                 |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-current liabilities:                                                                                             |   |              |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred tax liabilities                                                                                             |   |              | 65,618    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 65,618 |   |
| Provisions for dismantling and restoration                                                                      |   |              | 35,700    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 35,700 |   |
| Loans from banks                                                                                                     |   |              | -         |   |   |   | - |   |   |   | 3,367,832 |   |   |   | - |   |   |   | 3,367,832 |   |
| Long-term loans from related parties                                                                            |   |              | -         |   |   |   | - |   |   |   | 151,638 |   |   |   | - |   |   |   | 151,638 |   |
| Liabilities for employee benefits, net                                                                          |   |              | 160       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 160 |   |
| Total exposure in statement of financial position in respect of financial assets and financial liabilities |   |              | 4,157,594 |   |   |   | 398,525 |   |   |   | (3,796,859 | ) |   |   | 88,344 |   |   |   | 847,604 |   |

----

----

|  | E. | Market risk (cont’d) |
|--|----|----------------------------|

|  | (1) | Linkage and foreign currency risks (cont’d) |
|--|-----|---------------------------------------------------|

|  | (a) | The exposure to linkage and foreign currency risk (cont’d) |
|--|-----|------------------------------------------------------------------|

|                                         |   | December 31, 2017 |   |
|-----------------------------------------|--------|-------------------|--------|
|                                         |   | Currency/         |   |   | Currency/ |   |   | Principal |   |   |   |   |   |   |   |
|                                         |   | linkage           |   |   | linkage |   |   | amount in |   |   | Dates of |   |   |   |   |
|                                         |   | receivable        |   |   | payable |   |   | $ millions |   |   | expiration |   |   | Fair value |   |
|                                         |   |              |   |   |   |   |   |   |   |   |   |   |   | NIS thousands |   |
| Instruments used Economic Hedge:   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Forward foreign currency contracts |   | US dollars        |   |   | NIS |   |   |   | 30 |   |   |   | 12.31.18 |   |   |   | (1,191 | ) |
|                                         |   | December 31, 2016 |   |
|-----------------------------------------|--------|-------------------|--------|
|                                         |   | Currency/         |   |   | Currency/ |   |   | Principal |   |   |   |   |   |   |   |
|                                         |   | linkage           |   |   | linkage |   |   | amount in |   |   | Dates of |   |   |   |   |
|                                         |   | receivable        |   |   | payable |   |   | $ millions |   |   | expiration |   |   | Fair value |   |
|                                         |   |              |   |   |   |   |   |   |   |   |   |   |   | NIS thousands |   |
| Instruments used Economic Hedge:   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Forward foreign currency contracts |   | US dollars        |   |   | NIS |   |   |   | - |   |   |   | - |   |   |   | - |   |

|  | (b) | Sensitivity analysis |
|--|-----|----------------------|

----

----

|  | E. | Market risk (cont’d) |
|--|----|----------------------------|

|  | (1) | Linkage and foreign currency risks (cont’d) |
|--|-----|---------------------------------------------------|

|  | (b) | Sensitivity analysis (cont’d) |
|--|-----|-------------------------------------|

|                            |   | December 31, 2017 |    |   | December 31, 2016 |   |
|---------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                            |   | Increase          |    |   | Decrease          |   |   | Increase |   |   | Decrease |   |
|                            |   | Profit or loss    |    |   | Profit or loss    |   |   | Profit or loss |   |   | Profit or loss |   |
|                            |   | NIS thousands     |    |   | NIS thousands     |   |   | NIS thousands |   |   | NIS thousands |   |
|                            |   |              |    |   |              |   |   |   |   |   |   |   |
| Change in the exchange rate of: |   |              |    |   |              |   |   |   |   |   |   |   |
| 5% in the US dollar (1)         |   |              | 9,490   |   |              |   | (8,768 | ) |   |   | 4,417 |   |   |   | (4,417 | ) |
| 10% in the U.S. dollar (1)      |   |              | 18,620  |   |              |   | (17,897 | ) |   |   | 8,834 |   |   |   | (8,834 | ) |
| 1% change in CPI (2)            |   |              | (35,870 | )      |              |   | 35,870 |   |   |   | (37,969 | ) |   |   | 37,969 |   |
| 2% change in CPI (2)            |   |              | (71,741 | )      |              |   | 71,741 |   |   |   | (75,937 | ) |   |   | 75,937 |   |

|  | (1) | The sensitivity derives mainly from balances of cash, restricted deposits, derivatives and balances of trade and other payables in foreign currency. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | The effect of the change on equity is the same as in profit or loss. |
|--|-----|----------------------------------------------------------------------|

|  | (2) | Interest rate risk |
|--|-----|--------------------|

----

----

|  | F. | Fair value |
|--|----|------------|

|  | (1) | Fair values versus carrying amounts |
|--|-----|-------------------------------------|

|                           |   | December 31   |      |
|--------------------------------|--------|---------------|-----------|
|                           |   | 2017          |      |   | 2016 |   |
|                           |   | Carrying      |      |   | Fair |   |   | Carrying |   |   | Fair |   |
|                           |   | amount        |      |   | value |   |   | amount |   |   | value |   |
|                           |   | NIS thousands |      |   | NIS thousands |   |   | NIS thousands |   |   | NIS thousands |   |
|                           |   |          |      |   |   |   |   |   |   |   |   |   |
| Long-term loans from banks (*) |   |          | 3,391,692 |   |   |   | 3,657,877 |   |   |   | 3,565,221 |   |   |   | 3,798,313 |   |

|  | (*) | Including current maturities. |
|--|-----|-------------------------------|

|  | (2) | Interest rates used for determining fair value |
|--|-----|------------------------------------------------|

|                       |   | December 31 |   |
|----------------------------|--------|-------------|--------|
|                       |   | 2017        |   |   | 2016 |   |
|                       |   | %           |   |   | % |   |
|                       |   |        |   |   |   |   |
| Long-term loans from banks |   |        | 4.6    | % |   |   | 4.6 | % |

|  | (3) | Fair value hierarchy |
|--|-----|----------------------|

|  | — | Level 1: quoted prices (unadjusted) in active markets for identical instruments |
|--|---------|---------------------------------------------------------------------------------|

|  | — | Level 2: inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly |
|--|---------|---------------------------------------------------------------------------------------------------------------------|

|  | — | Level 3: inputs that are not based on observable market data (unobservable inputs). |
|--|---------|-------------------------------------------------------------------------------------|

|                               |   | December 31, 2017 |   |
|------------------------------------|--------|-------------------|--------|
|                               |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                               |   | NIS thousands     |   |   | NIS thousands |   |   | NIS thousands |   |   | NIS thousands |   |
|                               |   |              |   |   |   |   |   |   |   |   |   |   |
| Derivatives used for hedging:      |   |              |   |   |   |   |   |   |   |   |   |   |
| Forward foreign currency contracts |   |              | -      |   |   |   | (1,191 | ) |   |   | - |   |   |   | (1,191 | ) |
|                               |   | December 31, 2016 |   |
|------------------------------------|--------|-------------------|--------|
|                               |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
|                               |   | NIS thousands     |   |   | NIS thousands |   |   | NIS thousands |   |   | NIS thousands |   |
|                               |   |              |   |   |   |   |   |   |   |   |   |   |
| Derivatives used for hedging:      |   |              |   |   |   |   |   |   |   |   |   |   |
| Forward foreign currency contracts |   |              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |

----

----

|  | A. | Transactions with related and interested parties |
|--|----|--------------------------------------------------|

|                                 |   |                                                                                                                                                                                                                                                                                                                                                                  |   | Year ended December 31 |    |   | December 31         |   |
|--------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------------|--------|
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   | 2017                   |    |   | 2016                |   |   | 2015 |   |   | 2017 |   |   | 2016 |   |
| Related party/Interested party       |   | Nature of transaction                                                                                                                                                                                                                                                                                                                                                      |   | Transactions amounts   |    |   | Outstanding balance |   |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   |                   |    |   |                |   |
| Parties having significant influence |   | On February 2015, the Company entered into an agreement with Ezom to completion of works related to the constructions of the station. On December 2017 the Company entered into an agreement with EZOM regarding operation and maintenance of the power plant including the purchasing of spare parts                                                                      |   |                   | 2,542   |   |                |   | - |   |   |   | * 58,272 |   |   |   | 6,208 |   |   |   | 4,140 |   |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parties having significant influence |   | The Company entered into an agreement with EAPSS regarding operation and maintenance of the power plant including the purchasing of spare parts and repairs as from November 2012 see Note 11A(11). The payments will be made on a monthly basis throughout the period of the agreement. See Note 11A(4)) regarding a subcontracting agreement between EAPSS and Ezom Ltd. |   |                   | 225,325 |   |                |   | 128,147 |   |   |   | 126,205 |   |   |   | 26,252 |   |   |   | 32,680 |   |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parties having significant influence |   | The Company entered into an agreement with Eilat Ashkelon Pipelene Company Ltd. (EAPC) regarding petrol storage services as of July 2013. The payments will be paid on a quarterly basis (see Note 11A(6)).                                                                                                                                                                |   |                   | 4,000   |   |                |   | 3,596 |   |   |   | 3,619 |   |   |   | 1,055 |   |   |   | - |   |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parties having significant influence |   | The Company entered into a lease agreement of the land for the power plant (see Note 11A(2)).                                                                                                                                                                                                                                                                              |   |                   | 3,881   |   |                |   | 3,892 |   |   |   | 3,928 |   |   |   | - |   |   |   | - |   |
|                                 |   |                                                                                                                                                                                                                                                                                                                                                                       |   |                   |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Parties having significant influence |   | On March 2015, the Company entered into an agreement with EAPC for renting an operational area near to the power station                                                                                                                                                                                                                                                   |   |                   | 26      |   |                |   | 151 |   |   |   | 251 |   |   |   | - |   |   |   | - |   |

----

----

|  | A. | Transactions with related and interested parties (cont’d) |
|--|----|-----------------------------------------------------------------|

|                                 |   |                                                                              |   | Year ended December 31 |   |   | December 31         |   |
|--------------------------------------|--------|----------------------------------------------------------------------------------------|--------|------------------------|--------|--------|---------------------|--------|
|                                 |   |                                                                                   |   | 2017                   |   |   | 2016                |   |   | 2015 |   |   | 2017 |   |   | 2016 |   |
| Related party/Interested party       |   | Nature of transaction                                                                  |   | Transactions amounts   |   |   | Outstanding balance |   |
|                                 |   |                                                                                   |   |                   |   |   |                |   |
| Parties having significant influence |   | The Company has several agreements with related companies for the sale of electricity. |   |                   | 20,270 |   |                |   | 27,252 |   |   |   | 44,401 |   |   |   | 1,826 |   |   |   | 2,035 |   |
|                                 |   |                                                                                   |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Related Party                        |   | The Company engage with Ramat Negev Energy for purchase electricity.                   |   |                   | 476    |   |                |   | 86 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                 |   |                                                                                   |   |                   |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Key management personnel             |   | CEO current benefits                                                                   |   |                   | 2,959  |   |                |   | 2,113 |   |   |   | **5,419  |  |   |   | 734 |   |   |   | 720 |   |

|  | B. | **The liabilities of the Company to related and interested parties** |
|--|----|----------------------------------------------------------------------|

|                           |   |                  |   |   |                      |   |   |     |   |   |    |   |   |          |   |   |   |    |
|--------------------------------|--------|-----------------------|--------|--------|---------------------------|--------|--------|----------|--------|--------|---------|--------|--------|---------------|--------|--------|--------|---------|
|                           |   | The terms of the loan |   |   | Balance as at December 31 |   |
|                           |   |                  |   |   | Term of                   |   |   | Interest |   |   | Linkage |   |   |          |   |   |   |    |
|                           |   | Face value            |   |   | repayment                 |   |   | rate     |   |   | base    |   |   | 2017          |   |   | 2016   |    |
|                           |   | NIS thousands         |   |   |                      |   |   | %        |   |   |    |   |   | NIS thousands |   |
|                           |   |                  |   |   |                      |   |   |     |   |   |    |   |   |          |   |   |   |    |
| Loans from related parties (*) |   |                  |        |   |                      |   | (*)    |          |   |   | 10      | %      |   | CPI           |   |   |   | 195,228 |   |   |   | 231,638 |   |

----