Exhibit 99.1

KENON HOLDINGS LTD.
(Incorporated in the Republic of Singapore)
(Company Registration Number 201406588W)

PROXY STATEMENT
for the
ANNUAL GENERAL MEETING
of
KENON HOLDINGS LTD.

To Be Held on May 26, 2023
4 p.m. (Singapore time) at
1 Temasek Avenue #37-02B, Millenia Tower, Singapore 039192

PART I – INFORMATION ABOUT THE ANNUAL GENERAL MEETING

We are furnishing this Proxy Statement, dated as of May 4, 2023 (the “Proxy Statement”), in connection with the solicitation by our Board of Directors (the “Board”) of proxies to be voted at the Annual General Meeting of our shareholders, to be held on May 26, 2023 (the “AGM”), or at any adjournments thereof, for the purposes of voting on the proposals to be considered at the AGM (the “Proposals”), as set forth in the Notice of Annual General Meeting of Shareholders, dated as of May 4, 2023, accompanying this Proxy Statement (the “AGM Notice”). Unless the context requires otherwise, references in this Proxy Statement to “the Company”, “Kenon”, “we”, “us”, “our” and similar terms, shall mean Kenon Holdings Ltd., together with its subsidiaries and associated companies.

This Proxy Statement and the AGM Notice are each being published for the benefit of all holders of Kenon’s ordinary shares, no par value (“Kenon Shares”) (“Kenon Shareholders”), are being posted on Kenon’s website, will be furnished to the U.S. Securities and Exchange Commission (the “SEC”) on a Report on Form 6-K, and will also be filed with the Israel Securities Authority on an Immediate Report. If you are a beneficial shareholder holding Kenon Shares other than in registered form as a “shareholder of record”, that is, if you hold Kenon Shares in “street name” as, or through, a participant in the Depositary Trust Company (the “DTC”) (which includes those Kenon Shareholders that hold Kenon Shares through the Tel Aviv Stock Exchange (the “TASE”)), Kenon has fixed the close of business (EST) on May 4, 2023 (the “Record Date”), as the record date for determining whether you are entitled to receive printed copies of this Proxy Statement and the AGM Notice.

This Proxy Statement and the AGM Notice will be mailed to beneficial shareholders as of the Record Date, on or about May 5, 2023, and to shareholders of record (members) on May 4, 2023. Kenon will bear the cost of the preparation and mailing of these proxy materials and the solicitation of the proxies and will, upon request, reimburse banks, brokerage houses, other institutions, nominees, and fiduciaries for their reasonable expenses in forwarding these solicitation materials to Kenon Shareholders.

Quorum and Required Vote.

Representation of not less than 33 1/3 per cent. of the total number of issued and fully paid Kenon Shares as at the date of the AGM, in person or by proxy, is required to constitute a quorum. Accordingly, it is important that your shares be represented at the AGM.

The affirmative vote by a show of hands of at least a majority of the Kenon Shareholders present and voting, or, if a poll is demanded by the chairman of the AGM (the “Chairman of the AGM”) or, among other circumstances set forth in Article 63 of our Constitution (the “Constitution”), by holders of at least 5 per cent. of the total number of our paid-up shares, a simple majority of the Kenon Shares voting, is required at the AGM, to re-elect the Directors nominated pursuant to Proposals 1(a) – 1(h), to re-appoint KPMG LLP as our statutory Auditor pursuant to Proposal 2, and to approve the ordinary resolutions contained in Proposals 3, 4, 5, 6 and 8. The affirmative vote by a show of hands of a majority of not less than three-fourths of the Kenon Shareholders present and voting, or, if a poll is demanded by the relevant person(s) as described above, a majority of not less than three-fourths of the Kenon Shares voting, is required at the AGM, to approve the special resolution contained in Proposal 7. The Chairman of the AGM will demand a poll in order to enable the Kenon Shares represented in person or by proxy to be counted for voting purposes.

Abstentions and Broker Non-Votes.

Under the laws of Singapore, abstentions and “broker non-votes” are considered present and entitled to vote for the purpose of determining whether a quorum is present at the AGM.

Abstentions will not be counted in the tabulation of votes cast on a Proposal and are therefore not counted for purposes of determining whether a Proposal has been approved.

A “broker non-vote” will not be counted in the tabulation of votes cast on the relevant Proposal and is therefore not counted for purposes of determining whether such Proposal has been approved. A “broker non-vote” occurs when a bank, broker or other nominee holding shares on behalf of a beneficial owner may not vote ordinary shares held by it because it (i) has not received voting instructions from the beneficial owner of those shares and (ii) lacks discretionary voting power to vote those shares. Please note if you are a beneficial owner, your broker, bank, nominee or other institution is only entitled to vote your shares on “routine” matters if it does not receive voting instructions from you. The Proposals listed below are not “routine” matters for purposes of the broker vote:

●

Proposals 1(a) – 1(h) – Re-Election of Directors;

●

Proposal 4 – To Authorize the Ordinary Share Issuances;

●

Proposal 5 – To Authorize the Grant of Awards Under the Kenon Holdings Ltd. Share Incentive Plan 2014 (“SIP 2014”) and/or Options Under the Kenon Holdings Ltd. Share Option Plan 2014 (“SOP 2014”) and the Allotment and Issuance of Ordinary Shares;

●

Proposal 6 – To Approve the Renewal of the Share Purchase Authorization and Variation of Terms;

●

Proposal 7 – To Approve the Alteration of the Constitution; and

●

Proposal 8 – To Authorize the Allotment and Issuance of Ordinary Shares Pursuant to a Share Dividend Scheme.

Persons Entitled to Vote on the Proposals at the AGM.

Shareholders of Record: Kenon has convened an AGM to be held on May 26, 2023, to consider and vote upon the Proposals. You are entitled to vote at the AGM if you are a shareholder of record (member) holding Kenon Shares in your own name and registered in the Branch Register of Members maintained by Computershare Trust Company, N.A. (“Computershare”), as at the date of the AGM. Each outstanding Kenon Share that you own entitles you to one vote on a poll.

Beneficial Shareholders: If you hold Kenon Shares other than in registered form as a “shareholder of record” (i.e. if you hold Kenon Shares in “street name” as, or through, a participant in the DTC (which includes those Kenon Shareholders that hold Kenon Shares through the TASE)), in order for your vote to be counted at the AGM, you must have been a Kenon Shareholder as at, and with effect from, the Record Date.

If you have sold or transferred all of your Kenon Shares, you should immediately forward this Proxy Statement to the purchaser or transferee, or to the broker, bank, nominee, or other institution through whom the sale was effected, for onward transmission to the purchaser or transferee.

If you become a beneficial holder of Kenon Shares after the Record Date, but before the date of the AGM, and you wish to vote your Kenon Shares, you must become a “shareholder of record” prior to the AGM and vote as a “shareholder of record” according to the manner of voting set forth below. Please contact your broker, bank, nominee, or other institution holding your Kenon Shares if you wish to become a “shareholder of record”.

Manner of Voting.

Whether you plan to attend the AGM or not, we urge you to vote by proxy.

Shareholders of Record: A shareholder of record (member) entitled to attend and vote at the AGM is entitled to appoint a proxy, or proxies, to attend and vote on his behalf. A proxy need not be a shareholder of record (member). To vote by proxy, you should complete, sign and date the enclosed proxy card and return it promptly to Computershare in accordance with the instructions set forth in the AGM Notice, not less than 48 hours before the time appointed for holding the AGM (or within such other time as may be required by the Companies Act 1967 (the “Singapore Companies Act”)).

Where a member appoints two or more proxies, the appointments shall be valid only if he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. In the case of a joint appointment of two proxies, the Chairman of the AGM will be a member’s proxy by default in relation to the number of shares represented by such proxy card if either or both of the proxies appointed does/do not attend the AGM. In the case of an appointment of two proxies in the alternative, the Chairman of the AGM will be a member’s proxy by default in relation to the number of shares represented by such proxy card if both the proxies appointed do not attend the AGM.

Returning the proxy card will not affect your right to attend the AGM, and your proxy will not be used if you are personally present at the AGM or have, pursuant to the procedures set forth below, informed Kenon in writing prior to the voting that you wish to vote your Kenon Shares in person.

The proxy card must be signed under the hand of the appointor or of his attorney duly authorized in writing. Where the proxy card is executed by a corporation, it must be executed either under its common seal or under the hand of an officer or attorney duly authorized. A corporation which is a member may authorize by resolution of its directors or other governing body, such person as it thinks fit to act as its representative at the AGM.

If you sign the proxy card, but do not make specific choices, the proxy holder will vote your Kenon Shares as recommended by Kenon’s Board.

Beneficial Shareholders (New York Stock Exchange (the “NYSE”)): If you hold Kenon Shares other than in registered form as a “shareholder of record” (i.e. if you hold Kenon Shares in “street name” as, or through, a participant in the DTC, but do not hold your Kenon Shares through the TASE), you have the right to instruct your broker, bank, nominee or other institution on how to vote the Kenon Shares in your account. Your broker, bank, nominee or other institution will send a voting instruction form for you to use to direct how your Kenon Shares should be voted. You may not vote your Kenon Shares in person at the AGM unless you (i) obtain a legal proxy from the DTC (in compliance with the voting requirements under Singapore law) through your broker, bank, nominee, or other institution that holds your Kenon Shares, giving you the right to vote the Kenon Shares instead of the broker, bank, nominee, or other institution holding your Kenon Shares, (ii) bring a letter or recent account statement from such broker, bank, nominee, or other institution that confirms that you are the beneficial owner of the Kenon Shares, and (iii) bring a picture identification, such as a valid driver’s license or passport, for purposes of personal identification.

If you do not intend to vote in person at the AGM, your Kenon Shares must be voted no less than 48 hours prior to the AGM (or within such longer period prior to the AGM as may be specified by the DTC’s, or the DTC participants’, procedures).

Beneficial Shareholders (TASE): If you hold Kenon Shares other than in registered form as a “shareholder of record” and your Kenon Shares are held through the TASE, you are regarded as a beneficial holder of Kenon Shares and you may only vote your shares in one of the following ways: (a) sign and date a proxy card in the form filed by Kenon on MAGNA, the distribution site of the Israel Securities Authority, at www.magna.isa.gov.il (“MAGNA”), on May 4, 2023 and attach to it a proof of ownership certificate from the TASE Clearing House Member through which your Kenon Shares are held, which certificate indicates that you were the beneficial owner of such Kenon shares as of the Record Date, and return the proxy card, along with the proof of ownership certificate, to Kenon c/o Gornitzky & Co. via fax to +972-3-560-6555, Attention: Ari Fried, Adv. or by e-mail to: kenonproxy@gornitzky.com, or (b) if you choose to vote in person at the AGM, you must bring the proof of ownership certificate from the TASE’s Clearing House Member through which your Kenon Shares are held, which certificate indicates that you were the beneficial owner of the shares as of the Record Date, as well as a picture identification, such as a valid driver’s license or passport, for purposes of personal identification. In addition, you will also need to request a legal proxy from the DTC (in compliance with the voting requirements under Singapore law). If you do not intend to vote in person at the AGM, your Kenon Shares must be voted no less than 48 hours prior to the AGM (or within such longer period prior to the AGM as may be specified by the DTC’s, the DTC’s participants’, or the TASE’s procedures).

Revocation of Proxy.

Shareholders of Record: If you are a “shareholder of record”, your proxy may be revoked at any time prior to the time it is voted by (i) providing appropriate written notice to Proxy Services c/o Computershare Investor Services, PO BOX 43101, Providence, RI 02401-5067, UNITED STATES, no less than 48 hours prior to the AGM or (ii) attending the AGM and voting in person.

Beneficial Shareholders (NYSE): If your Kenon Shares are held in “street name” through a broker, bank, nominee, or other institution (other than those Kenon Shareholders that hold Kenon Shares through the TASE), please contact the broker, bank, nominee or other institution which holds your Kenon Shares to determine how to change or revoke your voting instructions.

Beneficial Shareholders (TASE): If you hold Kenon Shares through the TASE, you may revoke such proxy at any time prior to the time it is voted by (i) communicating such revocation in writing to Kenon or by executing and delivering a later-dated proxy to Kenon c/o Gornitzky & Co. via fax to +972-3-560-6555, Attention: Ari Fried, Adv. or by e-mail to: kenonproxy@gornitzky.com, no less than 48 hours prior to the AGM or (ii) attending the AGM and voting in person, subject to the satisfaction of the conditions set forth in “Manner of Voting – Beneficial Shareholders (TASE)” above.

As of the date of this Proxy Statement, Kenon does not intend to present, and has not been informed that any other person intends to present, any business for action, other than the Proposals set forth in this Proxy Statement and in the AGM Notice.

Registered Office.

The mailing address of our registered office is 9 Raffles Place, #27-00, Republic Plaza, Singapore 048619.

Singapore Financial Statements; Monetary Amounts.

We have prepared, in accordance with Singapore law, Singapore statutory financial statements, which are included with the annual report to be delivered to Kenon Shareholders prior to the date of the AGM, and which will be furnished to the SEC on a Report on Form 6-K, and will also be filed with the Israel Securities Authority on an Immediate Report. Except as otherwise stated herein, all monetary amounts in this Proxy Statement have been presented in U.S. dollars.

PART II – PROPOSALS TO BE CONSIDERED
AT THE ANNUAL GENERAL MEETING

PROPOSALS 1(a) – 1(h):
RE-ELECTION OF DIRECTORS

Article 94 of the Constitution requires that at each annual general meeting, all Directors for the time being shall retire from office. Under Article 95 of the Constitution, retiring Directors are eligible for re-election. Accordingly, all of our Directors, namely Mr. Cyril Pierre-Jean Ducau, Mr. Antoine Bonnier, Mr. Laurence N. Charney, Mr. Barak Cohen, Mr. N. Scott Fine, Dr. Bill Foo, Mr. Aviad Kaufman and Mr. Arunava Sen, will be retiring as Directors. All of our Directors, namely Mr. Cyril Pierre-Jean Ducau, Mr. Antoine Bonnier, Mr. Laurence N. Charney, Mr. Barak Cohen, Mr. N. Scott Fine, Dr. Bill Foo, Mr. Aviad Kaufman and Mr. Arunava Sen, will be standing for re-election as Directors at this AGM.

As of the date of this Proxy Statement, the Board is not aware of any nominee who is unable or will decline to serve as a Director.

Set forth below are the names of, and certain other information concerning, the nominees for re-election as Directors at the AGM:

Cyril Pierre-Jean Ducau. Mr. Ducau is the Chief Executive Officer of Ansonia Holdings Singapore B.V. and the Chief Executive Officer of Eastern Pacific Shipping Pte Ltd, a leading shipping company based in Singapore. He is a member of the board of directors of Ansonia Holdings Singapore B.V. as well as other private companies, each of which may be associated with the same ultimate beneficiary, Mr. Idan Ofer. He is also currently the Chairman of Cool Company Ltd, a NYSE-listed shipping company and an independent director of the Singapore Maritime Foundation and of the Global Centre for Maritime Decarbonisation Limited, which were established by the Maritime and Port Authority of Singapore. He is also a member of the board of directors of Gard P&I (Bermuda) Ltd, a leading maritime insurer. He was previously Head of Business Development of Quantum Pacific Advisory Limited in London and acted as Director and then Chairman of Pacific Drilling SA until 2018. Prior to joining Quantum Pacific Advisory Limited in 2008, Mr. Ducau was Vice President in the Investment Banking Division of Morgan Stanley & Co. International Ltd. in London. Mr. Ducau graduated from ESCP Europe Business School (Paris, Oxford, Berlin) and holds a Master of Science in business administration and a Diplom Kaufmann.

Antoine Bonnier. Mr. Bonnier is the Chief Executive Officer of Quantum Pacific (UK) LLP and serves as a member of the board of directors of Club Atletico de Madrid SAD, Competitive Power Ventures Inc., OPC Energy Ltd., Cool Company Ltd and Ekwateur SA, each of which may be associated with the same ultimate beneficiary, Mr. Idan Ofer. Mr. Bonnier was previously a Managing Director of Quantum Pacific (UK) LLP. Prior to joining Quantum Pacific Advisory Limited in 2011, Mr. Bonnier was an Associate in the Investment Banking Division of Morgan Stanley & Co. During his tenure there, from 2005 to 2011, he held various positions in the Capital Markets and Mergers and Acquisitions teams in London, Paris and Dubai. Mr. Bonnier graduated from ESCP Europe Business School and holds a Master of Science in Management.

Laurence N. Charney. Mr. Charney currently serves as the chairman of our audit committee. Mr. Charney retired from Ernst & Young LLP in June 2007, where, over the course of his more than 37-year career, he served as Senior Audit Partner, Practice Leader and Senior Advisor. Since his retirement from Ernst & Young, Mr. Charney has served as a business strategist and financial advisor to boards, senior management and investors of early stage ventures, private businesses and small to mid-cap public corporations across the consumer products, energy, high-tech/software, media/entertainment, and non-profit sectors. His most recent directorships also include board tenure with Marvel Entertainment, Inc. (through December 2009) and TG Therapeutics, Inc. (from March 2012 through the current date). Mr. Charney is a graduate of Hofstra University with a Bachelor’s degree in Business Administration (Accounting), and has also completed an Executive Master’s program at Columbia University. Mr. Charney maintains active membership with the American Institute of Certified Public Accountants and the New York State Society of Certified Public Accountants.

Barak Cohen. Mr. Cohen is a Managing Director at Quantum Pacific (UK) LLP and a board member of Qoros Automotive Co., Ltd., each of which may be associated with the same ultimate beneficiary, Mr. Idan Ofer. In September 2018, Mr. Cohen was appointed to the board of directors of Kenon, having served as Co-CEO of Kenon until that time. Prior to serving as Kenon’s Co-CEO, Mr. Cohen served as Kenon’s Vice President of Business Development and Investor Relations from 2015 to September 2017. Prior to joining Kenon in 2015, Mr. Cohen worked in various capacities at Israel Corporation Ltd. since 2008 most recently as Israel Corporation Ltd.’s Senior Director of Business Development and Investor Relations. Prior to joining Israel Corporation Ltd., Mr. Cohen held positions at Lehman Brothers (UK) and Ernst & Young (Israel). Mr. Cohen holds Bachelor’s degrees in Economics, summa cum laude, and Accounting & Management, magna cum laude, both from Tel Aviv University.

N. Scott Fine. Mr. Fine is the Chief Executive Officer and an Executive Director of Cyclo Therapeutics, Inc., a biotechnology company focused on developing novel therapeutics based on cyclodextrin technologies. Mr. Fine has been involved in investment banking for over 35 years, working on a multitude of debt and equity financings, buy and sell side mergers and acquisitions, strategic advisory work and corporate restructurings. Much of his time has been focused on transactions in the healthcare and consumer products area, including time with The Tempo Group of Jakarta, Indonesia. Mr. Fine was the lead investment banker on the IPO of Keurig Green Mountain Coffee Roasters and Central European Distribution Corporation, or CEDC, a multi-billion-dollar alcohol company. He was also involved in an Equity Strategic Alliance between Research Medical and the Tempo Group. Mr. Fine continued his involvement with CEDC, serving as a director from 1996 until 2014, during which time he led the CEDC Board’s successful efforts in 2013 to restructure the company through a pre-packaged Chapter 11 process whereby CEDC was acquired by the Russian Standard alcohol group. Recently, Mr. Fine served as Vice Chairman and Chairman of the Restructuring Committee of Pacific Drilling SA from 2017 to 2018 where he successfully led the Independent Directors to a successful reorganization. He also served as Sole Director of Better Place Inc. from 2013 until 2015. In that role, Mr. Fine successfully managed the global wind down of the company in a timely and efficient manner which was approved by both the Delaware and Israeli courts. Mr. Fine devotes time to several non-profit organizations, including through his service on the Board of Trustees for the IWM American Air Museum in Britain. He and his wife, Cathy are also the Executive Producers of “The Concert for Newtown” with Peter Yarrow of Peter, Paul, and Mary. Mr. Fine has been a guest lecturer at Ohio State University’s Moritz School of Law and Fordham University Law School.

Bill Foo. Dr. Bill Foo is a director and corporate advisor of several private, listed and non-profit entities, including Mewah International Inc., CDL Hospitality Trusts, Tung Lok Restaurants (2000) Ltd., M&C REIT Management Ltd and chairing Investible Funds VCC as well as the Salvation Army and James Cook University Singapore organizations. In May 2017, Dr. Foo was appointed to the board of directors of Kenon, having served as a director of IC Power Ltd. between November 2015 and January 2018. Prior to his retirement, Dr. Foo worked in financial services for over 30 years, including serving as CEO of ANZ Singapore and South East Asia Head of Investment Banking for Schroders. Dr. Foo has also worked in various positions at Citibank and Bank of America and has been a director of several listed and government-related entities, including International Enterprise Singapore (Trade Agency), where he chaired the Audit Committee for several years. Dr. Foo has a Master’s Degree in Business Administration from McGill University and a Bachelor of Business Administration from Concordia University and an honorary Doctor of Commerce from James Cook University Australia.

Aviad Kaufman. Mr. Kaufman is the Chief Executive Officer of One Globe Business Advisory Ltd, the chairman of Israel Corporation Ltd., and a board member of ICL Group Ltd., OPC Energy Ltd. and other private companies, each of which may be associated with Mr. Idan Ofer. From 2017 until July 2021, Mr. Kaufman served as the Chief Executive Officer of Quantum Pacific (UK) LLP and from 2008 until 2017 as Chief Financial Officer of Quantum Pacific (UK) LLP (and its predecessor Quantum Pacific Advisory Limited). From 2002 until 2007, Mr. Kaufman fulfilled different senior corporate finance roles at Amdocs Ltd. Previously, Mr. Kaufman held various consultancy positions with KPMG. Mr. Kaufman is a certified public accountant and holds a Bachelor’s degree in Accounting and Economics from the Hebrew University in Jerusalem (with distinction), and a Master’s of Business Administration in Finance from Tel Aviv University.

Arunava Sen. Mr. Sen is Director of Coromandel Advisors Pte Ltd, a Singapore-based company that provides strategic and transactional advice to global investors in the infrastructure and clean energy sectors. In May 2017, Mr. Sen was appointed to the board of directors of Kenon, having served as a director of IC Power Ltd between November 2015 and January 2018. Between August 2010 and February 2015, Mr. Sen was Chief Executive Officer and Managing Director of Lanco Power International Pte Ltd, a Singapore-registered company focused on the development of power projects globally. Previously, Mr. Sen held several senior roles at Globeleq Ltd, a Houston-based power investment company, including COO, CEO—Latin America and CEO—Asia. In 1999, Mr. Sen cofounded and was COO of Hart Energy International, a Houston-based company that developed and invested in power businesses in Latin America and the Caribbean. Mr. Sen currently serves on the investment committees of SUSI Asia Energy Transition Fund and Armstrong SE Asia Clean Energy Fund. A qualified Chartered Accountant, Mr. Sen holds a B.Com. degree from the University of Calcutta and an M.S. degree in Finance from The American University in Washington, D.C.

The Board recommends a vote “FOR”

Proposals 1(a) – 1(h) to re-elect each of the above nominees to our Board.

PROPOSAL 2:
RE-APPOINTMENT OF STATUTORY AUDITOR FOR THE FINANCIAL YEAR ENDING
DECEMBER 31, 2023 AND AUTHORIZATION OF OUR DIRECTORS TO FIX THEIR
REMUNERATION

KPMG LLP served as our statutory Auditor for the financial year ended December 31, 2022. Pursuant to section 205(2) and 205(4) of the Singapore Companies Act, any appointment after the Board’s initial appointment of our statutory Auditor, or its subsequent removal, requires the approval of our shareholders. The Audit Committee of our Board has authorized, approved, and recommended to our Board the re-appointment of KPMG LLP as our statutory Auditor for the financial year ending December 31, 2023 and to perform other appropriate services. As a result, our Board, upon recommendation of the Audit Committee, has approved, subject to shareholders’ approval, the re-appointment of KPMG LLP and, pursuant to section 205(16) of the Singapore Companies Act, is requesting that the shareholders authorize the Directors (which may act through the Audit Committee) to fix the Auditor’s remuneration for services rendered through the AGM. We expect that a representative from KPMG LLP will be present at the AGM. This representative will have the opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions. In addition, the fees paid to KPMG LLP for the financial year ended December 31, 2022 shall be reported to Kenon Shareholders at the AGM upon request.

The Board recommends a vote “FOR”

Proposal 2 to re-appoint KPMG LLP as our statutory Auditor for the financial year ending December 31,

2023, and to authorize the Directors (which may act through the Audit Committee) to fix their remuneration.

PROPOSAL 3:

ORDINARY RESOLUTION TO APPROVE THE STANDING AUTHORITY FOR THE ADDITIONAL

PAYMENT OF CASH COMPENSATION TO NON-EXECUTIVE DIRECTORS

Under section 169 of the Singapore Companies Act, we may only provide compensation to our Directors for services rendered in their capacity as Directors with the prior approval from our shareholders at a general meeting.

We believe that it is advisable and in the best interests of our shareholders for our shareholders to authorize the Company to provide additional cash compensation to any non-executive Director appointed from time to time to our ESG Committee (“ESGC”) of the Board in the manner specified below:

(a)

for the period from January 1, 2023 to June 30, 2023 (the “Relevant Period”), the payment of cash compensation:

(i)

to Mr. Arunava Sen for the amount of US$8,500 (annualized) for services rendered by him as Chairman of the ESGC and for his participation on the ESGC; and

(ii)

to each of Mr. Arunava Sen, Mr. Cyril Pierre-Jean Ducau and Mr. Laurence N. Charney, and such other non-executive Director from time to time, for the amount of US$1,275 for his attendance at each meeting of the ESGC,

and in relation to:

(1)

the fees payable pursuant to sub-paragraph (a)(i) above for the Relevant Period, a pro-rated amount of fees shall be payable to such non-executive Director who does not complete the full period of service; and

(2)

the fees payable pursuant to sub-paragraph (a)(ii) above for the Relevant Period, half of the amount of fees shall be payable to such non-executive Director who participates in any of the meetings by means of a conference telephone, video conference telephone, or similar communications equipment in accordance with Article 101(B) of the Constitution; and

(b)

with effect from July 1, 2023, the payment of cash compensation:

(i)

to the Chairman of the ESGC of the Board for the amount of US$8,500 annually for services rendered as Chairman of the ESGC and for his participation on the ESGC; and

(ii)

to each of the non-executive Directors for the amount of US$1,275 for his attendance at each meeting of the ESGC,

such standing authority to commence with effect from July 1, 2023 which shall not revoke the existing 2017 Directors Compensation Standing Authority (as defined below) but apply and operate in addition thereto, and in relation to:

(1)

the fees payable pursuant to sub-paragraph (b)(i) above, a pro-rated amount of fees shall be payable to such non-executive Director who does not complete a full calendar year of service; and

(2)

the fees payable pursuant to sub-paragraph (b)(ii) above, half of the amount of fees shall be payable to such non-executive Director who participates in any of the meetings by means of a conference telephone, video conference telephone, or similar communications equipment in accordance with Article 101(B) of the Constitution.

The ESGC was established to oversee the Company’s environmental, social, and governance policy and the implementation thereof and necessitated for certain Directors to undertake additional responsibilities. We believe that it is appropriate to pay additional cash compensation to such Directors as contemplated by this proposal. If Proposal 3 is approved by our shareholders, this authority will be without prejudice to, and in addition to, the standing authority for authorizing the recurring payment of fees in cash to Directors passed by shareholders at the Annual General Meeting held on June 22, 2017 (the “2017 Directors Compensation Standing Authority”). In other words, this authority will not affect the validity of the 2017 Directors Compensation Standing Authority, but shall instead apply and operate as an additional authorization for the payment of cash compensation to any non-executive Director appointed from time to time for his services rendered as Chairman of the ESGC and for his participation on the ESGC, and to each of the non-executive Directors for his attendance for each meeting of the ESGC. This standing authority, if approved by shareholders, will continue on a perpetual basis without the need for renewal at subsequent annual general meetings, unless subsequently varied or revoked by an ordinary resolution passed by shareholders at a general meeting.

It is intended that any cash compensation due to Mr. Cyril Pierre-Jean Ducau, Mr. Aviad Kaufman, Mr. Antoine Bonnier and Mr. Barak Cohen will be paid to and retained by Ansonia Holdings Singapore B.V. (“Ansonia”) or an entity designated by Ansonia.

We believe that this authorization will benefit our shareholders by enabling the Company to attract and retain qualified individuals to serve as Directors of the Company and to continue to provide leadership for the Company with the goal of enhancing long-term value for our shareholders.

The Board recommends a vote “FOR”

Proposal 3 to approve the standing authority for the additional payment of cash compensation to non-executive Directors.

PROPOSAL 4:
ORDINARY RESOLUTION TO AUTHORIZE THE ORDINARY SHARE ISSUANCES

We are incorporated in the Republic of Singapore. Under Singapore law, our Directors may only issue ordinary shares and make or grant offers, agreements or options that might or would require the issuance of ordinary shares, with the prior approval from our shareholders. We are submitting this Proposal 4 because we are required to do so under the laws of Singapore before we can issue any ordinary shares in connection with our equity compensation plans, possible future strategic transactions, or public and private offerings.

If this Proposal 4 is approved, the authorization would be effective from the date of the AGM until the earlier of (i) the conclusion of the 2024 Annual General Meeting or (ii) the expiration of the period within which the 2024 Annual General Meeting is required by law to be held. The 2024 Annual General Meeting is required to be held within six months after our financial year ending December 31, 2023 (except that Singapore law allows for a one-time application for an extension of up to a maximum of 60 days to be made with the Singapore Accounting and Corporate Regulatory Authority (“ACRA”)).

Our Board believes that it is advisable and in the best interests of our shareholders for our shareholders to authorize our Directors to issue ordinary shares and to make or grant offers, agreements or options that might or would require the issuance of ordinary shares.

We are not submitting this Proposal 4 in response to a threatened takeover. In the event of a hostile attempt to acquire control of the Company, we could seek to impede the attempt by issuing ordinary shares, which may dilute the voting power of our existing shareholders. This could also have the effect of impeding the efforts of our shareholders to remove an incumbent director and replace him with a new director of their choice. These potential effects could limit the opportunity for our shareholders to dispose of their ordinary shares at the premium that may be available in takeover attempts.

Our Board believes that it is advisable and in the best interests of our shareholders for our shareholders to provide this general authorization in order to avoid the delay and expense of obtaining shareholder approval at a later date and to provide us with greater flexibility to pursue strategic transactions and acquisitions and to raise additional capital through public and private offerings of our ordinary shares as well as instruments convertible into our ordinary shares.

The Board recommends a vote “FOR”

Proposal 4 to authorize the ordinary share issuances.

PROPOSAL 5:

ORDINARY RESOLUTION TO AUTHORIZE THE GRANT OF AWARDS UNDER THE SIP
2014 AND/OR OPTIONS UNDER THE SOP 2014 AND THE ALLOTMENT AND ISSUANCE OF
ORDINARY SHARES

Proposal 5 is to authorize the Directors to (a) offer and grant awards, and allot and issue ordinary shares, in accordance with the provisions of the SIP 2014; and/or (b) offer and grant options, and allot and issue ordinary shares upon the exercise of options and payment of the exercise price, in accordance with the provisions of the SOP 2014, provided the total number of shares which may be delivered pursuant to awards granted under the SIP 2014 and options granted under the SOP 2014 on any date, when added to the total number of new shares allotted and issued and/or to be allotted and issued and issued shares (including treasury shares) delivered and/or to be delivered (i) pursuant to awards already granted under the SIP 2014; and (ii) pursuant to options already granted under the SOP 2014, shall not exceed three (3) per cent. of the total number of issued shares (excluding shares held by the Company as treasury shares) from time to time (measured at the time of grant) as such limit may be amended, or such other limit as may be established from time to time.

The Company intends to continue to rely upon equity as a component of compensation. If shareholder approval is not granted to authorize the Directors to issue shares pursuant to the equity awards, we would have to review our compensation practices, and would likely have to substantially increase our cash compensation to retain key personnel.

Our Board expects that we will continue to issue ordinary shares and grant awards pursuant to the SIP 2014 and/or offer and grant options pursuant to the SOP 2014 in the future under circumstances similar to those in the past.

The Board recommends a vote “FOR”

Proposal 5 to authorize the grant of awards under the SIP 2014 and/or

options under the SOP 2014 and the allotment and issuance of ordinary shares.

PROPOSAL 6:
ORDINARY RESOLUTION TO APPROVE THE RENEWAL OF THE SHARE PURCHASE AUTHORIZATION AND VARIATION OF TERMS

Proposal 6 is to approve the renewal of the Share Purchase Authorization which authorizes the Directors to repurchase or otherwise acquire our ordinary shares up to the limit set forth below.

Singapore law requires that we obtain shareholder approval of a general and unconditional share purchase authorization given to our Directors if we wish to purchase or otherwise acquire our ordinary shares. At the 2022 Annual General Meeting, shareholders approved the renewal of a general and unconditional authorization, which we referred to as the Share Purchase Authorization, to allow our Directors to exercise all of the Company’s powers to purchase or otherwise acquire our issued ordinary shares on the terms of the Share Purchase Authorization. The Share Purchase Authorization which was approved by shareholders at the 2022 Annual General Meeting will expire on the date of the forthcoming AGM to be held on May 26, 2023. Accordingly, shareholder approval is being sought for the renewal of the Share Purchase Authorization at the AGM.

If the renewal of the Share Purchase Authorization is approved by shareholders at the AGM, the authority conferred by the Share Purchase Authorization will, unless varied or revoked by our shareholders at a general meeting, continue in force until the earlier of the date of the 2024 Annual General Meeting or the date by which the 2024 Annual General Meeting is required by law to be held. The 2024 Annual General Meeting is required to be held within six months after our financial year ending December 31, 2023 (except that Singapore law allows for a one-time application for an extension of up to a maximum of 60 days to be made with ACRA).

Any purchases or acquisitions by us of our ordinary shares must be made in accordance with, and in the manner prescribed by, the Singapore Companies Act, the applicable listing rules of the NYSE and the TASE, and such other laws and regulations as may apply from time to time.

The Share Purchase Authorization, if renewed, gives the Board authority to purchase shares but does not obligate us to repurchase any specific number of ordinary shares, and we may purchase ordinary shares within the limits described herein, and alternatively we may not make any repurchases of ordinary shares.

It is proposed for shareholders’ approval to be sought at the AGM to vary the Share Purchase Authorization to increase the maximum limit for share repurchases from 5% to 10% of the total number of our issued ordinary shares outstanding at the date of the AGM at which the Share Purchase Authorization is renewed (excluding our ordinary shares that are held as treasury shares or which are held by a subsidiary of the Company under section 21(4B) or 21(6C) of the Singapore Companies Act, as at that date). Save for the proposed increase to the limit on allowed purchases, the authority and limitations placed on our share purchases or acquisitions under the proposed Share Purchase Authorization, if renewed at the AGM, are substantially the same as were previously approved by shareholders at the 2022 Annual General Meeting and are summarized below.

Limit on Allowed Purchases

We may only purchase or acquire ordinary shares that are issued and fully paid up. The prevailing limitation under the Singapore Companies Act that is currently in force does not permit us to purchase or acquire more than 20% of the total number of our issued ordinary shares outstanding at the date of the AGM at which the Share Purchase Authorization is renewed. Any of our ordinary shares that are held as treasury shares or which are held by a subsidiary of the Company under section 21(4B) or 21(6C) of the Singapore Companies Act will be disregarded for purposes of computing this 20% limitation.

We are seeking approval to renew the Share Purchase Authorization, which is an approval for our Board to authorize the purchase or acquisition of our issued ordinary shares not exceeding 10% of our total number of issued ordinary shares outstanding as of the date of the passing of this proposal (excluding any ordinary shares that are held as treasury shares or which are held by a subsidiary of the Company under section 21(4B) or 21(6C) of the Singapore Companies Act as at that date).

Purely for illustrative purposes, on the basis of 53,894,413 issued ordinary shares outstanding as of March 31, 2023, and assuming no additional ordinary shares are issued on or prior to the date of the AGM, based on the proposed increased limit of 10%, our Board would be authorized to resolve to purchase not more than 5,389,441 issued ordinary shares pursuant to the Share Purchase Authorization, as proposed to be renewed at the AGM.

Duration of Share Purchase Authorization

Purchases or acquisitions of ordinary shares may be made, at any time and from time to time, on and from the date of approval of the Share Purchase Authorization up to the earlier of:

(a)

the date on which our next annual general meeting is held or required by law to be held; or

(b)

the date on which the authority conferred by the Share Purchase Authorization is revoked or varied by our shareholders at a general meeting.

Manner of Purchases or Acquisitions of Ordinary Shares

Purchases or acquisitions of ordinary shares may be made by way of:

(a)

market purchases on the NYSE, the TASE or any other stock exchange on which our ordinary shares may for the time being be listed and quoted, which may be made through one or more duly licensed or registered dealers appointed by us for that purpose; and/or

(b)

off-market purchases (that is, effected other than on the NYSE, the TASE or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted), in accordance with an equal access scheme as prescribed by the Singapore Companies Act.

If we decide to purchase or acquire our ordinary shares in accordance with an equal access scheme, our Directors may impose any terms and conditions as they see fit and as are in our interests, so long as the terms are consistent with the Share Purchase Authorization, the applicable rules of the NYSE and the TASE, the provisions of the Singapore Companies Act and other applicable laws. In addition, an equal access scheme must satisfy all of the following conditions:

(i)

offers for the purchase or acquisition of ordinary shares must be made to every person who holds ordinary shares to purchase or acquire the same percentage of their ordinary shares;

(ii)

all of those persons must be given a reasonable opportunity to accept the offers made; and

(iii)

the terms of all of the offers must be the same (except differences in consideration that result from offers relating to ordinary shares with different accrued dividend entitlements and differences in the offers solely to ensure that each person is left with a whole number of ordinary shares).

Purchase Price

The maximum purchase price (excluding brokerage commission, applicable goods and services tax and other related expenses of the purchase or acquisition) to be paid for each ordinary share will be determined by our Directors. The maximum purchase price to be paid for the ordinary shares as determined by our Directors must not exceed:

(a)

in the case of a market purchase, the highest independent bid or the last independent transaction price, whichever is higher, of our ordinary shares quoted or reported on the NYSE or TASE or any other stock exchange on which our ordinary shares may for the time being be listed and quoted (as the case may be); and

(b)

in the case of an off-market purchase pursuant to an equal access scheme, up to 105% of the closing price of our ordinary shares as quoted on the NYSE or TASE or any other stock exchange on which our ordinary shares may for the time being be listed and quoted (as the case may be), on the day immediately preceding the date on which we resolve on effecting the off-market purchase.

Sources of Funds

Only funds legally available for purchasing or acquiring ordinary shares in accordance with the Constitution and the applicable laws of Singapore shall be used for any such purchases or acquisitions. We intend to use internal sources of funds and/or distributions from our businesses and/or proceeds from the disposal of our assets to finance any purchase or acquisition of our ordinary shares. Our Directors do not propose to exercise the Share Purchase Authorization in a manner and to such an extent that would materially affect our working capital requirements.

The Singapore Companies Act permits us to purchase or acquire our ordinary shares out of our capital and/or profits. Acquisitions or purchases made out of capital are permissible only so long as we are solvent for the purposes of section 76F(4) of the Singapore Companies Act. A company is solvent if, at the date of the payment made in consideration of the purchase or acquisition (which shall include any expenses—including brokerage or commission) the following conditions are satisfied: (a) there is no ground on which the company could be found unable to pay its debts; (b) if it is not intended to commence winding up of the company, the company will be able to pay its debts as they fall due during the period of 12 months immediately after the date of the payment; and (c) the value of the company’s assets is not less than the value of its liabilities (including contingent liabilities) and will not, after the proposed purchase or acquisition, become less than the value of its liabilities (including contingent liabilities).

Status of Purchased or Acquired Ordinary Shares

Any ordinary share that we purchase or acquire will be deemed cancelled immediately on purchase or acquisition, and all rights and privileges attached to such ordinary share will expire on cancellation (unless such ordinary share is held by us as a treasury share, which we may elect to do for a repurchased share). The total number of issued shares will be diminished by the number of ordinary shares purchased or acquired by us and which are not held by us as treasury shares.

We will cancel and destroy share certificates in respect of purchased or acquired ordinary shares as soon as reasonably practicable following settlement of any purchase or acquisition of such ordinary shares. Where such ordinary shares are purchased or acquired and held by us as treasury shares, we will cancel and issue new certificates in respect thereof.

Treasury Shares

Under the Singapore Companies Act, ordinary shares purchased or acquired by us may be held as treasury shares. Some of the provisions on treasury shares under the Singapore Companies Act are summarized below.

Maximum Holdings. The number of ordinary shares held as treasury shares (including ordinary shares which are held by a subsidiary of the Company under section 21(4B) or 21(6C) of the Singapore Companies Act) may not at any time exceed 10% of the total number of issued ordinary shares.

Voting and Other Rights. We may not exercise any right in respect of treasury shares, including any right to attend or vote at meetings and, for the purposes of the Singapore Companies Act, we shall be treated as having no right to vote and the treasury shares shall be treated as having no voting rights. In addition, no dividend may be paid, and no other distribution of our assets may be made, to the Company in respect of treasury shares, other than the allotment of ordinary shares as fully paid bonus shares. A subdivision or consolidation of any treasury share into treasury shares of a greater or smaller amount is also allowed so long as the total value of the treasury shares after the subdivision or consolidation is the same as before the subdivision or consolidation, respectively.

Disposal and Cancellation. Where ordinary shares are held as treasury shares, we may at any time:

•

sell the treasury shares for cash;

•

transfer the treasury shares for the purposes of or pursuant to any share scheme, whether for employees, directors or other persons;

•

transfer the treasury shares as consideration for the acquisition of shares in or assets of another company or assets of a person;

•

cancel the treasury shares; or

•

sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for Finance of Singapore.

Financial Effects

Our net tangible assets will be reduced by the purchase price (including any expenses) of any ordinary shares purchased or acquired and cancelled or held as treasury shares. We do not anticipate that the purchase or acquisition of our ordinary shares in accordance with the Share Purchase Authorization would have a material impact on our financial condition and cash flows.

The financial effects on us arising from purchases or acquisitions of ordinary shares which may be made pursuant to the Share Purchase Authorization will depend on, among other things, whether the ordinary shares are purchased or acquired out of our profits and/or capital, the number of ordinary shares purchased or acquired, if any are acquired, the price paid for the ordinary shares and whether the ordinary shares purchased or acquired are held in treasury or cancelled.

Under the Singapore Companies Act, purchases or acquisitions of ordinary shares by us may be made out of profits and/or our capital so long as the Company is solvent.

Our purchases or acquisitions of our ordinary shares may be made out of our profits and/or our capital. Where the consideration (including any expenses) paid by us for the purchase or acquisition of ordinary shares is made out of our profits, such consideration (including any expenses such as brokerage or commission) will correspondingly reduce the amount available for the distribution of cash dividends by us. Where the consideration that we pay for the purchase or acquisition of ordinary shares is made out of our capital, the amount available for the distribution of cash dividends by us will not be reduced.

Rationale for the Share Purchase Authorization

We believe the renewal of the Share Purchase Authorization at the AGM will benefit our shareholders by providing our Directors with appropriate flexibility to repurchase ordinary shares if the Directors believe that such repurchases would be in the best interests of our shareholders. Any decision to repurchase our ordinary shares from time to time will depend on, inter alia, our continuing assessment of then-current market conditions and our need to use available cash.

Take-over Implications

In October 2014, the Securities Industry Council of Singapore waived the application of the Singapore Code on Take-overs and Mergers (the “Singapore Takeover Code”) to the Company, subject to certain conditions. Pursuant to the waiver, for as long as Kenon is not listed on a securities exchange in Singapore, and except in the case of a tender offer (within the meaning of U.S. securities laws) where the offeror relies on a Tier 1 exemption to avoid full compliance with U.S. tender offer regulations, the Singapore Takeover Code shall not apply to Kenon (the “Waiver”).

If for any reason the Waiver is no longer available, the Singapore Takeover Code would consequently apply to Kenon, where the following would ensue:

(a)

as a result of our purchase or acquisition of our issued ordinary shares, a shareholder’s (together with persons acting in concert with such shareholder) increase in the percentage interest in Kenon’s voting shares would be treated as an acquisition for the purposes of the Singapore Takeover Code;

(b)

any person acquiring an interest, whether by a series of transactions over a period of time or not, either on his own or together with parties acting in concert with such person, in 30% or more of our voting shares, or, if such person holds, either on his own or together with parties acting in concert with such person, between 30% and 50% (both inclusive) of our voting shares, and such person (or parties acting in concert with such person) acquires additional voting shares representing more than 1% of our voting shares in any six-month period, must, except with the consent of the Securities Industry Council of Singapore, extend a mandatory takeover offer for the remaining voting shares in accordance with the provisions of the Singapore Takeover Code; and

(c)

such shareholder or group of shareholders acting in concert with a Director could become obliged to make a take-over offer for the Company under Rule 14 of the Singapore Takeover Code unless the requirements in Appendix 2 of the Singapore Takeover Code can be satisfied.

Kenon Shareholders who are in doubt as to their obligations, if any, to make a mandatory take-over offer under the Singapore Takeover Code as a result of any share purchase by us should consult the Securities Industry Council of Singapore and/or their professional advisers at the earliest opportunity.

The Board recommends a vote “FOR”

Proposal 6 to approve the renewal of the Share Purchase Authorization and Variation of Terms.

PROPOSAL 7:
SPECIAL RESOLUTION TO APPROVE THE ALTERATION OF THE CONSTITUTION

Proposal 7 is to approve the alteration of the Constitution to facilitate the implementation of a share dividend scheme by the Company, by inserting a new Article 123A immediately after the existing Article 123 of the Constitution.

New Article 123A is proposed to be inserted to set out a framework to facilitate, if and when desired, share dividend payments, and to empower our Board to determine the manner in which share dividend payments are to be implemented pursuant to a share dividend scheme. Pursuant to the new Article 123A, whenever a dividend is resolved to be paid as an interim dividend by our Board or proposed to be declared as a final or special dividend at a general meeting of the Company, our Board may further resolve that members entitled to such dividend be entitled to elect to receive an allotment of shares credited as fully paid in lieu of cash in respect of the whole or such part of the dividend as the Directors may think fit. The share dividend scheme, if and when implemented, will enable the Company to declare and pay or satisfy a dividend in either cash and/or, in lieu of cash, shares of the Company at the election of members. The text of the new Article 123A is set out in the AGM Notice.

Our Board believes that the new Article 123A will be beneficial for our shareholders by providing an opportunity for our shareholders to acquire further equity in the Company if and when the scheme is implemented, while also providing flexibility to our Board in declaring distributions. The share dividend scheme, if implemented and determined by the Board to be applied to any particular dividend, will enable our shareholders to elect to receive new shares in the capital of the Company, credited as fully paid, or the cash amount of the dividend. If a share dividend scheme is declared by the Board to apply to a particular distribution, to the extent that our shareholders elect to receive dividends in the form of new shares, the cash amounts not otherwise paid by the Company may then be utilized to fund the growth and expansion of the Company.

Shareholders should note that Proposal 7 is not by itself indicative of any definitive proposal by the Company to adopt a share dividend scheme or if adopted, to apply the scheme to any dividend.

The Board recommends a vote “FOR”

Proposal 7 to approve the alteration of Kenon’s Constitution.

PROPOSAL 8:

ORDINARY RESOLUTION TO AUTHORIZE THE ALLOTMENT AND ISSUANCE OF ORDINARY

SHARES PURSUANT TO A SHARE DIVIDEND SCHEME

Proposal 8 is to authorize the Directors to allot and issue ordinary shares pursuant to the terms of any share dividend scheme.

If approved at the AGM, the authority to issue new ordinary shares for the purposes of a share dividend scheme will continue in force until the earlier of the date of the 2024 Annual General Meeting or the date by which the 2024 Annual General Meeting is required by law to be held. The 2024 Annual General Meeting is required to be held within six months after our financial year ending December 31, 2023 (except that Singapore law allows for a one-time application for an extension of up to a maximum of 60 days to be made with ACRA).

Such authority in Proposal 8, as aforesaid, is subject to and contingent upon the passing of Proposal 7 at the AGM, being the special resolution to be proposed at the AGM to alter the Constitution to insert a new Article 123A to facilitate the implementation by the Company of a share dividend scheme. Proposal 8, if approved at the AGM, does not obligate the Directors to implement a share dividend scheme.

The Board recommends a vote “FOR”

Proposal 8 to authorize the allotment and issuance of ordinary shares pursuant to a share dividend scheme.

PART III – ADDITIONAL INFORMATION

Kenon was established in connection with a spin-off of its businesses from Israel Corporation Ltd. to promote the growth and development of its primary businesses. Kenon will continue to review and examine various ways to further maximize value for shareholders, which may include investments or acquisitions in new or existing businesses. Kenon has interests in the following businesses: (i) OPC Energy Ltd., a leading owner, operator and developer of power generation facilities in the Israeli and U.S. power markets, in which Kenon has a 55% equity interest, (ii) ZIM Integrated Shipping Services Ltd, an international shipping company in which Kenon has a 21% interest; and (iii) Qoros Automotive Co., Ltd. (“Qoros”), a China-based automotive company in which Kenon has a 12% equity interest¹.

The Kenon Shares are currently listed on the NYSE and the TASE under the symbol “KEN”.

Kenon’s Share Registrar and Transfer Agent

Computershare may be contacted for information regarding the AGM as follows:

Computershare Shareholder Services
PO Box 43078, Providence RI 02940-3078, UNITED STATES
Toll Free Telephone:	+1 (877) 373 6374
Toll Number:	+1 (781) 575 3100

Mailing addresses:

Shareholder correspondence should be mailed to:

Computershare Investor Services
PO Box 43078, Providence RI 02940-3078, UNITED STATES

Overnight correspondence should be sent to:

Computershare Investor Services

150 Royall Street

Canton MA 02021, UNITED STATES

¹	Kenon has agreed to sell its remaining 12% interest in Qoros.

Shareholder website:

www.computershare.com/investor

Shareholder online inquiries:

https://www-us.computershare.com/investor/Contact

Where You Can Find Additional Information

Kenon is subject to the reporting requirements of the U.S. Securities Exchange Act of 1934, as applicable to foreign private issuers, and accordingly, files reports and other information with the SEC, including financial statements. Kenon’s Annual Report on Form 20-F for the year ended December 31, 2022 (which does not form a part of this Proxy Statement) contains consolidated financial statements of Kenon as of and for the fiscal year ended December 31, 2022 and was publicly filed with the SEC and, along with Kenon’s other filings, can be found on the SEC’s website at www.sec.gov.

Kenon also maintains a website that offers additional information: http://www.kenon-holdings.com/. Information contained on these websites is not incorporated by reference into this Proxy Statement.

Caution Concerning Forward-Looking Statements

This document includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to statements about the proposals for the authorization of share repurchases, ordinary share issuances, grants of awards and options under Kenon’s equity compensation plans, the proposed alteration of Kenon’s Constitution and the authorization of Directors to determine that distributions be payable at the option of each member in either cash and/or share issuances and related statements and other non-historical statements. These statements are subject to uncertainty and changes in circumstances. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond Kenon’s control, which could cause a material difference from what is indicated in such forward-looking statements. Such risks include risks relating to the authorizations sought herein and other risks and factors, including those risks set forth under the heading “Risk Factors” in Kenon’s most recent Annual Report on Form 20-F filed with the SEC and other filings and risks that share repurchases, issuances, option grants and share issuances pursuant to a share dividend scheme may not proceed on the terms indicated herein or at all. Except as required by law, Kenon undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events, or otherwise.

Exhibit 99.3

Kenon Holdings Ltd. and subsidiaries

Consolidated Financial Statements

As at December 31, 2022 and 2021 and for the three years ended December 31, 2022

Kenon Holdings Ltd.

Consolidated Financial Statements

as at December 31, 2022 and 2021 and for the three years ended December 31, 2022

Contents

	Page

Directors’ Statement	F-1 – F-2

Reports of Independent Registered Public Accounting Firms	F-3 – F-6

Consolidated Statements of Financial Position	F-7 – F-8

Consolidated Statements of Profit & Loss	F-9

Consolidated Statements of Other Comprehensive Income	F-10

Consolidated Statements of Changes in Equity	F-11 – F-13

Consolidated Statements of Cash Flows	F-14 – F-15

Notes to the Consolidated Financial Statements	F-16 – F-88

Statement of Financial Position of the Company	F-89

Notes to Financial Position of the Company	F-90 – F-95

Directors’ statement

We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended December 31, 2022.

In our opinion:

(a)

the financial statements set out on pages F-7 to F-95 are drawn up so as to give a true and fair view of the financial position of the Group and of the Company as at December 31, 2022 and the financial performance, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act 1967, (the Act), and Singapore Financial Reporting Standards; and

(b)	at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The Board of Directors has, on the date of this statement, authorized these financial statements for issue.

Directors

The directors in office at the date of this statement are as follows:

Cyril Pierre-Jean Ducau
Laurence Neil Charney
Nathan Scott Fine
Aviad Kaufman
Antoine Bonnier
Foo Say Mui
Arunava Sen
Barak Cohen

Directors’ interests

According to the register kept by the Company for the purposes of Section 164 of the Act, particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and children of less than 18 years of age) in shares, debentures, warrants and share options in the Company and in related corporations (other than wholly-owned subsidiaries) are as follows:

Name of director and corporation in which interests are held	Shareholdings registered in the name of director, spouse, children or nominees
	Holdings at beginning of the year		Holdings at end of the year
Laurence Neil Charney
Kenon Holdings Ltd. - Ordinary shares		49,180		40,504

Foo Say Mui
Kenon Holdings Ltd. - Ordinary shares		16,420		17,774

Arunava Sen
Kenon Holdings Ltd. - Ordinary shares		16,420		17,774

Nathan Scott Fine
Kenon Holdings Ltd. - Ordinary shares		1,804		-

F - 1

Directors’ interests (Cont’d)

Except as disclosed in this statement, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning of the financial year, or at the end of the financial year.

Except as disclosed under the “Share-based Compensation Plans” section in this statement, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Share-based Compensation Plans

The Kenon Holdings Ltd. Share Incentive Plan 2014 (the “SIP 2014”) authorises the directors of the Company to offer and grant awards of fully paid-up shares, free of payment, in accordance with the provisions of the SIP 2014 and to allot and issue from time to time such number of ordinary shares of the Company as may be required to be delivered pursuant to the vesting of awards under the SIP 2014, while the Kenon Holdings Ltd. Share Option Plan 2014 (“SOP 2014”) authorises the directors of the Company to offer and grant options in accordance with the SOP 2014 to acquire ordinary shares and to allot and issue from time to time such number of ordinary shares as may be required to be delivered pursuant to the exercise of options under the SOP 2014.

Directors of the Company are eligible to participate in the SIP 2014 and the SOP 2014.

Share options

During the financial year, there were:

(i)	no options granted by the Company to any person to take up unissued shares in the Company; and

(ii)	no shares issued by virtue of any exercise of option to take up unissued shares of the Company.

As at the end of the financial year, there were no unissued shares of the Company under option plan.

Auditors

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

────────────────────

Cyril Pierre-Jean Ducau

Director

────────────────────

Arunava Sen

Director

March 30, 2023

F - 2

KPMG LLP

12 Marina View, #15-01

Asia Square Tower 2

Singapore 018961

Telephone +65 6213 3388

Fax +65 6225 0984

Internet kpmg.com.sg

Independent auditors’ report

Members of the Company
Kenon Holdings Ltd.

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Kenon Holdings Ltd. (‘the Company’) and its subsidiaries (‘the Group’), which comprise the consolidated statement of financial position of the Group and the statement of financial position of the Company as at December 31, 2022, the consolidated statement of profit or loss and comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows of the Group for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages FS1 to FS95.

In our opinion, the accompanying consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Companies Act 1967 (‘the Act’) and Financial Reporting Standards (‘FRSs’) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at December 31, 2022 and of the consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with Singapore Standards on Auditing (‘SSAs’). Our responsibilities under those standards are further described in the ‘Auditors’ responsibilities for the audit of the financial statements’ section of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (‘ACRA Code’) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matter is those matter that, in our professional judgement, was of most significance in our audit of the financial statements of the current period. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

KPMG LLP (Registration No. T08LL1267L), an accounting limited liability partnership registered in Singapore under the Limited Liability Partnership Act (Chapter 163A) and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

F - 3

Impairment assessments of goodwill arising from the acquisition of CPV Group
The key audit matter	How the matter was addressed in our audit
As discussed in Notes 3.J and 13.C to the consolidated financial statements, the carrying amount of the cash generating unit (CGU) to which goodwill is allocated is reviewed at each reporting date for impairment. As of December 31, 2022, the Group’s goodwill arising from the acquisition of CPV Group amounted to USD 105 million (Renewable Energy CGU). The Company estimates the recoverable amount of the Renewable Energy CGU based on discounted expected future cash flows. An impairment loss is recognized if the carrying value of the Renewable Energy CGU exceeds its estimated recoverable amount. We identified the evaluation of the impairment assessments of the goodwill as a critical audit matter. Specifically, a high degree of auditor judgement was required to evaluate the discount rates to determine the recoverable amount of the Renewable Energy CGU. Additionally, the audit effort associated with evaluating the discount rates required involvement of valuation professionals with specialized skills and knowledge.	The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of the internal controls relating to the impairment assessment of Renewable Energy CGU, including the control related to evaluating the discount rates used in the discounted cashflows. In addition, we involved valuation professionals with specialized skills and knowledge to assist us in evaluating the discount rates by comparing them against independently developed range of discount rates using inputs from publicly available information.

Other information

Management is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors’ report thereon.

We have obtained all other information prior to the date of this auditors’ report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

F - 4

Responsibilities of management and directors for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and FRSs, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

•	Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls.

•	Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

•

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

F - 5

•	Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

•

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless the law or regulations preclude public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and regulatory requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

The engagement partner on the audit resulting in this independent auditors’ report is Ang Fung Fung.

/s/ KPMG LLP

KPMG LLP

Public Accountants and

Chartered Accountants

Singapore

March 30, 2023

F - 6

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Financial Position as at December 31, 2022 and 2021

		As at December 31,
		2022		2021
	Note	$ Thousands

Current assets
Cash and cash equivalents	5		535,171		474,544
Short-term deposits and restricted cash	6		45,990		229
Trade receivables			73,900		62,643
Short-term derivative instruments			2,918		798
Other investments	7		344,780		-
Other current assets	8		58,956		43,379
Total current assets			1,061,715		581,593

Non-current assets
Investment in ZIM (associated company)	9		427,059		1,354,212
Investment in OPC's associated companies	9		652,358		545,242
Long-term restricted cash			15,146		21,463
Long-term derivative instruments	29.D.1		16,077		11,637
Deferred taxes	24.C.2		6,382		19,016	*
Property, plant and equipment, net	12		1,222,421		1,125,820
Intangible assets, net	13		220,795		224,282
Long-term prepaid expenses and other non-current assets	14		50,814		57,266
Right-of-use assets, net	17		99,293		97,883
Total non-current assets			2,710,345		3,456,821

Total assets			3,772,060		4,038,414

* The Group made an immaterial correction of classification error of $30 million in non-current deferred taxes from assets to liabilities as at December 31, 2021.

The accompanying notes are an integral part of the consolidated financial statements.

F - 7

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Financial Position as at December 31, 2022 and 2021, continued

		As at December 31,
		2022		2021
	Note	$ Thousands
Current liabilities
Current maturities of loans from banks and others	15		39,262		38,311
Trade and other payables	16		133,415		171,537
Dividend payable	19.D		-		188,607
Short-term derivative instruments	29.D.1		889		8,688
Current tax liabilities			653		34
Deferred taxes	24.C.2		1,285		21,117
Current maturities of lease liabilities			17,474		18,991
Total current liabilities			192,978		447,285

Non-current liabilities
Long-term loans from banks and others	15		610,434		596,489
Debentures	15		513,375		575,314
Deferred taxes	24.C.2		97,800		95,080	*
Other non-current liabilities			41,388		28,817
Long-term derivative instruments			10		192
Long-term lease liabilities			20,157		14,951
Total non-current liabilities			1,283,164		1,310,843

Total liabilities			1,476,142		1,758,128

Equity	19
Share capital			50,134		602,450
Translation reserve			1,206		25,680
Capital reserve			42,553		25,783
Accumulated profit			1,504,592		1,139,775
Equity attributable to owners of the Company			1,598,485		1,793,688
Non-controlling interests			697,433		486,598
Total equity			2,295,918		2,280,286

Total liabilities and equity			3,772,060		4,038,414

* The Group made an immaterial correction of classification error of $30 million in non-current deferred taxes from assets to liabilities as at December 31, 2021.

_____________________________	_____________________________	_____________________________
Cyril Pierre-Jean Ducau Chairman of Board of Directors	Robert L. Rosen CEO	Mark Hasson CFO

Approval date of the consolidated financial statements: March 30, 2023

The accompanying notes are an integral part of the consolidated financial statements.

F - 8

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Profit & Loss for the years ended December 31, 2022, 2021 and 2020

		For the year ended December 31,
		2022			2021			2020
	Note	$ Thousands

Revenue	20		573,957			487,763			386,470
Cost of sales and services (excluding depreciation and amortization)	21		(417,261	)		(336,298	)		(282,086	)
Depreciation and amortization			(56,853	)		(53,116	)		(33,135	)
Gross profit			99,843			98,349			71,249
Selling, general and administrative expenses	22		(99,936	)		(75,727	)		(49,957	)
Other income/(expenses)			2,918			(81	)		1,721
Operating profit			2,825			22,541			23,013
Financing expenses	23		(50,397	)		(144,295	)		(51,174	)
Financing income	23		44,686			2,934			14,291
Financing expenses, net			(5,711	)		(141,361	)		(36,883	)

(Losses)/gains related to Qoros	10		-			(251,483	)		309,918
(Losses)/gains related to ZIM	9.B.a		(727,650	)		(204	)		43,505
Share in profit/(losses) of associated companies, net
- ZIM	9.A.2		1,033,026			1,260,993			167,142
- OPC's associated companies	9.A.2		85,149			(10,844	)		-
- Qoros	9.A.2		-			-			(6,248	)
Profit before income taxes			387,639			879,642			500,447
Income tax expense	24		(37,980	)		(4,325	)		(4,698	)
Profit for the year from continuing operations			349,659			875,317			495,749
Gain for the year from discontinued operations	26
-Recovery of retained claims, net			-			-			8,476
Profit for the year			349,659			875,317			504,225

Attributable to:
Kenon’s shareholders			312,652			930,273			507,106
Non-controlling interests			37,007			(54,956	)		(2,881	)
Profit for the year			349,659			875,317			504,225

Basic/diluted profit per share attributable to Kenon’s shareholders (in dollars):	25
Basic/diluted profit per share			5.80			17.27			9.41
Basic/diluted profit per share from continuing operations			5.80			17.27			9.25
Basic/diluted profit per share from discontinued operations			-			-			0.16

The accompanying notes are an integral part of the consolidated financial statements.

F - 9

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Other Comprehensive Income for the years ended December 31, 2022, 2021 and 2020

	For the year ended December 31,
	2022			2021			2020
	$ Thousands

Profit for the year		349,659			875,317			504,225

Items that are or will be subsequently reclassified to profit or loss
Foreign currency translation differences in respect of foreign operations		(40,694	)		17,489			36,354
Reclassification of foreign currency and capital reserve differences on loss of significant influence		-			-			(23,425	)
Group’s share in other comprehensive income of associated companies		13,611			12,360			1,873
Effective portion of change in the fair value of cash-flow hedges		14,774			8,772			(45,322	)
Change in fair value of other investments at FVOCI		(2,100	)		-			-
Change in fair value of derivative financial instruments used for hedging cash flows recorded to the cost of the hedged item		(1,043	)		37,173			3,067
Change in fair value of derivatives financial instruments used to hedge cash flows transferred to the statement of profit & loss		(4,125	)		(2,121	)		6,300
Income taxes in respect of components of other comprehensive income		(2,658	)		(423	)		1,346
Total other comprehensive income for the year		(22,235	)		73,250			(19,807	)
Total comprehensive income for the year		327,424			948,567			484,418

Attributable to:
Kenon’s shareholders		290,985			969,862			486,165
Non-controlling interests		36,439			(21,295	)		(1,747	)
Total comprehensive income for the year		327,424			948,567			484,418

The accompanying notes are an integral part of the consolidated financial statements.

F - 10

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2022, 2021 and 2020

																Non-
																controlling
		Attributable to the owners of the Company														interests			Total
		Share			Translation			Capital		Accumulated
		Capital			reserve			reserve		profit			Total
	Note	$ Thousands

Balance at January 1, 2022			602,450			25,680			25,783		1,139,775			1,793,688			486,598			2,280,286
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Cash distribution to owners of the Company	19.F		(552,316	)		-			-		-			(552,316	)		-			(552,316	)
Share-based payment transactions			-						8,502					8,502			2,104			10,606
Total contributions by and distributions to owners			(552,316	)		-			8,502		-			(543,814	)		2,104			(541,710	)

Changes in ownership interests in subsidiaries
Dilution in investment in subsidiary	11.A.5		-			-			-		57,585			57,585			135,567			193,152
Acquisition of subsidiary with non-controlling interest			-			-			41		-			41			-			41
Investments from holders of non-controlling interests in equity of subsidiary			-			-			-		-			-			36,725			36,725
Total changes in ownership interests in subsidiaries			-			-			41		57,585			57,626			172,292			229,918

Total comprehensive income for the year
Net profit for the year			-			-			-		312,652			312,652			37,007			349,659
Other comprehensive income for the year, net of tax			-			(24,474	)		8,227		(5,420	)		(21,667	)		(568	)		(22,235	)
Total comprehensive income for the year			-			(24,474	)		8,227		307,232			290,985			36,439			327,424

Balance at December 31, 2022			50,134			1,206			42,553		1,504,592			1,598,485			697,433			2,295,918

The accompanying notes are an integral part of the consolidated financial statements.

F - 11

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2022, 2021 and 2020

															Non-
															controlling
		Attributable to the owners of the Company													interests			Total
		Share		Translation		Capital			Accumulated
		Capital		reserve		reserve			profit			Total
	Note	$ Thousands

Balance at January 1, 2021			602,450		15,896		(11,343	)		459,820			1,066,823			209,185			1,276,008
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Share-based payment transactions			-		-		7,371			-			7,371			1,187			8,558
Dividends declared	19.D		-		-		-			(288,811	)		(288,811	)		(10,214	)		(299,025	)
Total contributions by and distributions to owners			-		-		7,371			(288,811	)		(281,440	)		(9,027	)		(290,467	)

Changes in ownership interests in subsidiaries
Dilution in investment in subsidiary	11.A.5		-		-		-			38,443			38,443			103,891			142,334
Non-controlling interests in respect of business combinations			-		-		-			-			-			6,769			6,769
Investments from holders of non-controlling interests in equity of subsidiary			-		-		-			-			-			197,075			197,075
Total changes in ownership interests in subsidiaries			-		-		-			38,443			38,443			307,735			346,178

Total comprehensive income for the year
Net profit for the year			-		-		-			930,273			930,273			(54,956	)		875,317
Other comprehensive income for the year, net of tax			-		9,784		29,755			50			39,589			33,661			73,250
Total comprehensive income for the year			-		9,784		29,755			930,323			969,862			(21,295	)		948,567

Balance at December 31, 2021			602,450		25,680		25,783			1,139,775			1,793,688			486,598			2,280,286

The accompanying notes are an integral part of the consolidated financial statements.

F - 12

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2022, 2021 and 2020

																Non-
																controlling
		Attributable to the owners of the Company														interests			Total
		Share		Translation			Capital			Accumulated
		Capital		reserve			reserve			profit			Total
	Note	$ Thousands

Balance at January 1, 2020			602,450		17,889			13,962			(10,949	)		623,352			88,436			711,788
Transactions with owners, recognised directly in equity
Contributions by and distributions to owners
Share-based payment transactions			-		-			874			-			874			236			1,110
Dividend to holders of non-controlling interests in subsidiaries														-						-
Dividends declared and paid	19.D		-		-			-			(120,133	)		(120,133	)		(12,412	)		(132,545	)
Total contributions by and distributions to owners			-		-			874			(120,133	)		(119,259	)		(12,176	)		(131,435	)

Changes in ownership interests in subsidiaries
Dilution in investment in subsidiary	11.A.5		-		-			-			80,674			80,674			136,170			216,844
Acquisition of non-controlling interests without a change in control			-		-			(4,109	)		-			(4,109	)		(1,498	)		(5,607	)
Total changes in ownership interests in subsidiaries			-		-			(4,109	)		80,674			76,565			134,672			211,237

Total comprehensive income for the year
Net profit for the year			-		-			-			507,106			507,106			(2,881	)		504,225
Other comprehensive income for the year, net of tax					(1,993	)		(22,070	)		3,122			(20,941	)		1,134			(19,807	)
Total comprehensive income for the year			-		(1,993	)		(22,070	)		510,228			486,165			(1,747	)		484,418

Balance at December 31, 2020			602,450		15,896			(11,343	)		459,820			1,066,823			209,185			1,276,008

The accompanying notes are an integral part of the consolidated financial statements.

F - 13

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2022, 2021 and 2020

		For the year ended December 31,
		2022			2021			2020
	Note	$ Thousands

Cash flows from operating activities
Profit for the year			349,659			875,317			504,225
Adjustments:
Depreciation and amortization			62,876			57,640			34,171
Financing expenses, net	23		5,711			141,361			36,883
Share in profit of associated companies, net	9.A.2		(1,118,175	)		(1,250,149	)		(160,894	)
Gains on disposal of property, plant and equipment, net			-			-			(1,551	)
Losses/(gains) related to Qoros	10		-			251,483			(309,918	)
Losses/(gains) related to ZIM	9.B.a		727,650			204			(43,505	)
Recovery of retained claims	26		-			-			(9,923	)
Share-based payments			18,855			18,369			1,110
Income taxes			37,980			4,325			6,145
			84,556			98,550			56,743
Change in trade and other receivables			(28,819	)		(1,171	)		(9,669	)
Change in trade and other payables			(10,100	)		(429	)		45,061
Cash generated from operating activities			45,637			96,950			92,135
Dividends received from associated companies, net			727,309			143,964			-
Income taxes (paid)/refunded, net			(1,565	)		(385	)		61
Net cash provided by operating activities			771,381			240,529			92,196

The accompanying notes are an integral part of the consolidated financial statements.

F - 14

Kenon Holdings Ltd. and subsidiaries

Consolidated Statements of Cash Flows, continued

For the years ended December 31, 2022, 2021 and 2020

		For the year ended December 31,
		2022			2021			2020
	Note	$ Thousands
Cash flows from investing activities
Short-term deposits and restricted cash, net			(46,266	)		558,247			(501,618	)
Short-term collaterals deposits, net			(19,180	)		-			-
Investment in long-term deposits, net			12,750			51,692			6,997
Purchase of other investments			(650,777	)		-			-
Proceeds from sale of other investments			308,829			-			-
Long-term advance deposits and prepaid expenses			(11,013	)		(6,976	)		(57,591	)
Long-term loan to an associate			-			(5,000	)		-
Proceeds from sale of subsidiary, net of cash disposed off			-			-			407
Acquisition of subsidiary, less cash acquired	11.A.4		-			(659,169	)		-
Investments in associated companies, less cash acquired			(2,932	)		(8,566	)		-
Acquisition of property, plant and equipment			(259,820	)		(231,235	)		(74,456	)
Acquisition of intangible assets			(10,453	)		(1,452	)		(368	)
Proceeds from sale of property, plant and equipment and intangible assets			-			-			546
Reimbursement in respect of right-of-use asset			-			4,823			-
Interest received			6,082			269			709
Income tax paid			-			-			(32,332	)
Deferred consideration in respect of acquisition of subsidiary			-			-			(13,632	)
Proceeds from/(payment of) transactions in derivatives, net			1,349			(5,635	)		(3,963	)
Proceeds from distribution from associated companies			4,444			46,729			-
Proceeds from deferred payment			-			-			217,810
Proceeds from sales of interest in ZIM	9.B.a.4		463,549			67,087			-
Proceeds from sale of interest in Qoros	10.3		-			-			219,723
(Payment)/recovery of financial guarantee	10.6		-			(16,265	)		6,265
Recovery of retained claims	26		-			-			9,923
Net cash used in investing activities			(203,438	)		(205,451	)		(221,580	)

Cash flows from financing activities
Dividends paid to holders of non-controlling interests			-			(10,214	)		(12,412	)
Cash distribution and dividends paid	19.D, 19.F		(740,922	)		(100,209	)		(120,115	)
Investments from holders of non-controlling interests in equity of subsidiary			36,725			197,076			32
Costs paid in advance in respect of taking out of loans			(2,845	)		(4,991	)		(8,556	)
Payment of early redemption commission with respect to the debentures	15.1.B		-			(75,820	)		(11,202	)
Payment in respect of derivative financial instruments, net			(923	)		(13,933	)		-
Proceeds from issuance of share capital by a subsidiary to non-controlling interests, net of issuance expenses	11.A.5, 11.A.6		193,148			142,334			216,844
Receipt of long-term loans			102,331			343,126			73,236
Proceeds from issuance of debentures, less issuance expenses	15.2		-			262,750			280,874
Repayment of long-term loans, debentures and lease liabilities			(55,762	)		(562,016	)		(130,210	)
Short-term credit from banks and others, net			-			-			(134	)
Acquisition of non-controlling interests			-			-			(7,558	)
Interest paid			(25,428	)		(31,523	)		(24,989	)
Net cash (used in)/provided by financing activities			(493,676	)		146,580			255,810

Increase in cash and cash equivalents			74,267			181,658			126,426
Cash and cash equivalents at beginning of the year			474,544			286,184			147,153
Effect of exchange rate fluctuations on balances of cash and cash equivalents			(13,640	)		6,702			12,605
Cash and cash equivalents at end of the year			535,171			474,544			286,184

The accompanying notes are an integral part of the consolidated financial statements.

F - 15

B.	Additional information

ZIM

Financial position

As of December 31, 2022, ZIM’s total equity amounted to $5.9 billion (2021: $4.6 billion) and its working capital amounted to $1.6 billion (2021: $2.3 billion). During the year ended December 31, 2022, ZIM recorded operating profit of $6.1 billion (2021: $5.8 billion; 2020: $722 million) and net profit of $4.6 billion (2021: 4.6 billion; 2020: $524 million).

		For the year ended
		December 31
		2022			2021			2020
	Note	$ Thousands			$ Thousands			$ Thousands
Gain on dilution from ZIM IPO	9.B.a.2		-			9,724			-
Loss on dilution from ZIM options exercised	9.B.a.3		(3,475	)		(39,438	)		-
Gain on sale of ZIM shares	9.B.a.4		204,634			29,510			-
(Impairment)/write back of ZIM investment	9.B.a.5		(928,809	)		-			43,505
			(727,650	)		(204	)		43,505

Initial public offering

In February 2021, ZIM completed its initial public offering (“IPO”) of 15,000,000 ordinary shares (including shares issued upon the exercise of the underwriters’ option), for gross consideration of $225 million (before deducting underwriting discounts and commissions or other offering expenses). ZIM’s ordinary shares began trading on the NYSE on January 28, 2021.

Prior to the IPO, ZIM obtained waivers from its notes holders, subject to the completion of ZIM’s IPO, by which certain requirements and limitations in respect of repurchase of debt, incurrences of debt, vessel financing, reporting requirements and dividend distributions, were relieved or removed.

As a result of the IPO, Kenon’s interest in ZIM was diluted from 32% to 28%. Following the IPO, Kenon recognized a gain on dilution of $10 million in its consolidated financial statements in 2021.

Exercise of ZIM options

In 2022, ZIM issued approximately 407 thousand (2021: 5.2 million) shares as a result of options being exercised. As a result of the issuance, Kenon recognized a loss on dilution of approximately $3 million (2021: $39 million) in its consolidated financial statements.

Sales of ZIM shares

Between September and November 2021, Kenon sold approximately 1.2 million ZIM shares at an average price of $58 per share for a total consideration of approximately $67 million. As a result, Kenon recognized a gain on sale of approximately $30 million in its consolidated financial statements. As at December 31, 2021, as a result of the sales of ZIM shares and the issuance of new shares described in Note 9.B.a.3, Kenon’s interest in ZIM reduced from 28% to 26%.

In March 2022, Kenon sold approximately 6 million ZIM shares at an average price of $77 per share for total consideration of approximately $463 million. As a result of the sale, Kenon recognized a gain on sale of approximately $205 million in its consolidated financial statements. As at December 31, 2022, as a result of the sales of ZIM shares and the issuance of new shares described in Note 9.B.a.3, Kenon’s interest in ZIM reduced from 26% to 21%.

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Note 9 – Investment in Associated Companies (Cont’d)

Impairment assessment

For the purposes of Kenon’s impairment assessment of its investment, ZIM is considered one CGU, which consists of all of ZIM’s operating assets. The recoverable amount is based on the higher of the value-in-use and the fair value less cost of disposal (“FVLCOD”).

Year Ended December 31, 2022

Kenon identified indicators of impairment in accordance with IAS 28 as a result of a significant decrease in ZIM’s market capitalization towards the end of 2022. Therefore, the carrying value of Kenon’s investment in ZIM was tested for impairment in accordance with IAS 36.

Kenon assessed the fair value of ZIM to be its market value as at December 31, 2022 and also assessed that, based solely on publicly available information within the current volatile shipping industry, no reasonable VIU calculation could be performed. As a result, Kenon concluded that the recoverable amount of its investment in ZIM is the market value. ZIM is accounted for as an individual share making up the investment and therefore no premium is added to the fair value of ZIM. Kenon measures the recoverable amount based on FVLCOD, measured at Level 1 fair value measurement under IFRS 13.

Given that market value is below carrying value Kenon recognized an impairment of $929 million.

Year Ended December 31, 2021

Kenon did not identify any objective evidence that its net investment in ZIM was impaired as at 31 December 31, 2021 and therefore, in accordance with FRS 28, no assessment of the recoverable amount of ZIM was performed.

Year Ended December 31, 2020

Due to an improvement in ZIM’s financial performance in 2020, Kenon, independently from ZIM, appointed a third-party to perform a valuation of its 32% equity investment in ZIM in accordance with FRS 28 and FRS 36. For the year ended December 31, 2020, Kenon concluded that the carrying amount of the investment in ZIM is lower than the recoverable amount, and therefore, a $44 million reversal of previously recorded impairment was recognized.

The valuation was based on publicly available information and earnings of ZIM over the 12-month period to December 31, 2020.

The independent valuer arrived at a range of equity for ZIM between $430 million and $585 million after adjustments for net debt. The fair value measurement was categorized as a Level 3 fair value based on the inputs in the valuation technique used.

C.	OPC’s associated companies

				Ownership interest as at December 31
	Note		Main location of company's activities	2022			2021
CPV, Three Rivers, LLC		9.C.1	Illinois		10	%		10	%
CPV Fairview, LLC		9.C.2	Pennsylvania		25	%		25	%
CPV Maryland, LLC		9.C.3	Maryland		25	%		25	%
CPV Shore Holdings, LLC		9.C.4	New Jersey		38	%		38	%
CPV Towantic, LLC		9.C.5	Connecticut		26	%		26	%
CPV Valley Holdings, LLC		9.C.6	New York		50	%		50	%

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Note 9 – Investment in Associated Companies (Cont’d)

CPV Three Rivers, LLC (“CPV Three Rivers”)

CPV Three Rivers is a project under construction in Illinois, United States. The commercial operation date is expected to be in Q2 2023.

In respect of an interest of 17.5% in the rights to the Three Rivers construction project (the “Construction Project”), a Sellers’ Loan in the amount of $95 million (the “Sellers’ Loan”) was provided to the CPV Group. The Seller’s Loan was granted for a period of up to two years from the Transaction Completion Date, bore interest at an annual rate of 4.5%, to be paid quarterly and was secured by a lien on shares of the holding company that owns the rights in the project under construction and rights pursuant to the management agreement of the project under construction.

On February 3, 2021, the transaction for sale of 7.5% of the rights in the Construction Project was completed for a consideration of approximately $41 million which was served for repayment as part of the Sellers’ Loan. No gain or loss was recognized on the sale. The remaining 10% equity interest continued to be subject to the Sellers’ Loan of approximately $55 million, which was repaid in October 2021.

CPV Fairview, LLC (“CPV Fairview”)

CPV Fairview is a power plant in Pennsylvania, United States using natural gas and combined cycle technology whose commercial operations started in 2019.

CPV Maryland, LLC (“CPV Maryland”)

CPV Maryland is a power plant in Maryland, United States using natural gas and combined cycle technology whose commercial operations started in 2017.

CPV Shore Holdings, LLC (“CPV Shore”)

CPV Shore is a power plant in New Jersey, United States using natural gas and combined cycle technology whose commercial operations started in 2016.

CPV Towantic, LLC (“CPV Towantic”)

CPV Towantic is a power plant in Connecticut, United States using natural gas/dual-fuel and combined cycle technology whose commercial operations started in 2018.

CPV Valley Holdings, LLC (“CPV Valley”)

CPV Valley is a power plant in New York, United States using natural gas/dual-fuel and combined cycle technology whose commercial operations started in 2018.

CPV Valley’s financial statements as at December 31, 2022 included a disclosure of circumstances related to CPV Valley's ability to repay its liabilities under its credit agreement of over $400 million at the repayment date of the liabilities, i.e. June 30, 2023. CPV Valley's management is negotiating with its financing entities in an effort to defer or refinance its liabilities under the credit agreement. As of the approval date of the consolidated financial statements, CPV Valley is not expected to be able to repay its liabilities under the credit agreement using its cash flows from operating activities. However, CPV Valley management believes that it will be able to defer or refinance its credit agreement by June 30, 2023. As at December 31, 2022, there is no impact to the consolidated financial statements.

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Note 10 – Long-term investment (Qoros)

		For the year ended December 31,
		2022		2021			2020
	Note	$ Thousands
Fair value (loss)/gain on remaining 12% interest in Qoros	10.3, 10.5		-		(235,218	)		154,475
(Payment)/recovery of financial guarantee	10.6		-		(16,265	)		6,195
Gain on sale of 12% interest in Qoros	10.3		-		-			152,610
Fair value loss on put option	10.3		-		-			(3,362	)
			-		(251,483	)		309,918

As at December 31, 2022, the Group holds a 12% (2021: 12%) equity interest in Qoros through a wholly-owned and controlled company, Quantum (2007) LLC (“Quantum”). Chery Automobiles Limited (“Chery”), a Chinese automobile manufacturer, holds a 25% (2021: 25%) equity interest and the remaining 63% (2021: 63%) interest is held by an entity related to the Baoneng Group (“New Qoros Investor” or “New Strategic Partner”).

2.	Qoros introduced a New Strategic Partner

In January 2018, the New Qoros Investor purchased 51% of Qoros from Kenon and Chery for RMB 3.315 billion (approximately $504 million), resulting in Kenon’s and Chery’s interest in Qoros dropping from 50% each to 24% and 25%, respectively. This was part of an investment structure (“Investment Agreement”) to invest a total of approximately RMB 6.63 billion (approximately $1,002 million) by the New Qoros Investor. The Investment Agreement provided Kenon with a put option over its remaining equity interest in Qoros.

3.	Kenon sells down from 24% to 12%

In January 2019, Kenon, on behalf of its wholly owned subsidiary Quantum (2007) LLC, announced that it had entered into an agreement to sell half (12%) of its remaining interest (24%) in Qoros to the New Qoros Investor for RMB1,560 million (approximately $220 million), which was based on the same post-investment valuation as the initial investment by the New Qoros Investor. In April 2020, Kenon completed the sale of this half of its remaining interest in Qoros and received payment of RMB1,560 million (approximately $220 million). Kenon recognized a gain of approximately $153 million from the sale of its 12% interest in Qoros and the derecognition of the current portion of the put option pertaining to the 12% interest sold.

Subsequent to the sale, the remaining 12% interest in Qoros was accounted for on a fair value basis through profit and loss and, together with the non-current portion of the put option pertaining to the remaining 12% interest (see Note 10.2), was reclassified in the statement of financial position as a long-term investment (Qoros). Upon reclassification, Kenon immediately recognized a fair value gain of approximately $139 million and the long-term investment (Qoros) was initially measured at a combined fair value of approximately $220 million. By the end of 2020, primarily due to the appreciation of RMB against the USD, the fair value of the long-term investment (Qoros) increased by approximately $15 million to $235 million.

In 2020 up until the completion date of the sale and prior to the reclass detailed above, the aggregate current and non-current put option fair value was reduced by approximately $3 million to $68 million. The sale was not made pursuant to the put option described above in Note 10.2.

4.	Agreement to sell remaining 12% interest

In April 2021, Quantum entered into an agreement with the New Qoros Investor to sell all of its remaining 12% interest in Qoros. The total purchase price is RMB1.56 billion (approximately $245 million).

To date, the New Qoros Investor has failed to make any of the required payments under this agreement.

In the fourth quarter of 2021, Kenon started arbitration proceedings against the New Qoros Investor for breach of the agreement and Kenon also started litigation proceedings against the New Qoros Investor with regards to the New Qoros Investor’s obligations to Kenon’s pledged shares in relation to Qoros’ RMB 1.2 billion loan (as described below). The outcomes of these legal proceedings and any related awards are uncertain.

As a result of the payment delay, Quantum had exercised the Put Option it has to sell its remaining shares to the New Qoros Investor.

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Note 10 – Long-term investment (Qoros) (Cont’d)

Fair value assessment

In September 2021, in light of the events described above, Kenon performed an assessment of the fair value of the long-term investment (Qoros) under FRS 113 Fair value measurement. Kenon concluded that the fair value of the long-term investment (Qoros) is zero. Therefore, in 2021 Kenon recognized a fair value loss of $235 million in its consolidated financial statements for the year ended 2021. There were no significant changes in circumstances in 2022 as compared to 2021, therefore, management has assessed that there is no change in fair value of Qoros.

6.	Financial Guarantees Provision and Releases

Following completion of the transaction in 2019 as described in Note 10.3, the New Qoros Investor assumed its proportionate obligations with respect to the Qoros loans. As a result of this and repayments by Qoros in relation to its loans, Chery’s obligations under the loan guarantees were reduced. As at December 31, 2019, Kenon’s back-to-back guarantee obligations to Chery were reduced to approximately $23 million.

In April 2020, Kenon received $6 million from Chery following repayments by Qoros in relation to its loans. As at December 31, 2020, Kenon’s back-to-back guarantee obligations to Chery were reduced to approximately $16 million.

In the fourth quarter of 2021, Chery paid the full amount of its guarantee obligations. As discussed above, Kenon had back-to-back guarantee obligations of approximately $16 million to Chery in respect of guarantees Chery had given for these two loans. Kenon paid the $16 million to Chery and recognized a corresponding $16 million expense in its consolidated statements of profit and loss. Following this payment, Kenon does not have any remaining guarantee obligations with respect to Qoros debt.

As at December 31, 2022, Kenon has pledged substantially all of its interests in Qoros to secure Qoros’ RMB 1.2 billion loan facility. The New Qoros Investor was required to assume its pro rata share of pledge obligations. It has not yet provided all such pledges but has provided Kenon with a guarantee in respect of its pro rata share, and up to all, of Quantum's pledge obligations.

Qoros continues to engage in discussions with the lenders and other relevant stakeholders relating to its other outstanding bank loans and resumption of manufacturing production which was shut down in 2021.

7.	Restrictions

Qoros has restrictions with respect to distribution of dividends and sale of assets deriving from legal and regulatory restrictions, restrictions under the joint venture agreement and the Articles of Association and restrictions stemming from credit received.

Note 11 – Subsidiaries

A.	Investments

OPC Energy Ltd.

OPC is a publicly-traded company whose securities are listed on the TASE. OPC is engaged in three reportable segments:

generation and supply of electricity and energy (electricity, steam and charging services for electric vehicles) in Israel to private customers, Israel Electric Company (“IEC”) and Noga – The Israel Independent System Operator Ltd. (“System Operator” or “Noga’), including initiation, development, construction and operation of power plants and facilities for energy generation;

ii.

generation and supply of electricity and energy in the United States using renewable energy, including development, construction and management of renewable energy power plants; and

iii.

generation and supply of electricity and energy in the United States using conventional (natural gas) power plants, including development, construction and management of conventional energy power plants in the United States.

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Note 11 – Subsidiaries (Cont’d)

In 2022, CPV Group supplied retail electricity sale activities that complement its electricity generation activity through CPV Group.

OPC manages most of its operations in Israel through OPC Power Plants, and its operations in the United States through CPV Group, of which 70% is indirectly held by OPC.

Material subsidiaries

Set forth below are details regarding OPC’s material subsidiaries:

			Main location of company's activities	Ownership interest as at December 31
	Note		Main location of company's activities	2022			2021
OPC Power Plants Ltd. (formerly OPC Israel Energy Ltd.)		11.A.1	Israel		100	%		100	%
CPV Group LP		11.A.2	USA		70	%		70	%

OPC Power Plants Ltd. (“OPC Power Plants”)

OPC Power Plants (formerly OPC Israel Energy Ltd.), holds most of OPC’s businesses in Israel, such as OPC’s interests in OPC Rotem, OPC Hadera, OPC Tzomet and OPC Sorek 2.

OPC Rotem Ltd. (“OPC Rotem”)

OPC Rotem operates the Rotem Power Plant located in the Rotem Plain. Its operations commenced on July 6, 2013, and OPC Rotem has a license which allows it to produce and sell electricity for a period of 30 years from that date. As at December 31, 2022, OPC Power Plants held 80% interest in OPC Rotem with the remaining 20% is held by Veridis Power Plants Ltd. (“Veridis”). Subsequent to the year-end, OPC Rotem became a wholly-owned subsidiary of OPC Power Plants. Refer to Note 30 for further details.

OPC Hadera Ltd. (“OPC Hadera”)

OPC Hadera holds a permanent power generation license using cogeneration technology for the Hadera Power Plant (i.e. generating both electricity and steam), with 144 MW installed capacity, and a supply license. The generation license has a validity of 20 years, and may be extended for an additional 10 years subject to regulatory approval. OPC Hadera owns the Energy Center (boilers and turbines on the premises of Infinya Ltd. (“Infinya”)). The Energy Center operates as a back-up for the supply of steam.

OPC Hadera supplies all the electricity and steam needs of Infinya, which is located adjacent to the Hadera Power Plant, for a contracted period of 25 years, through the Hadera Power Plant and the Energy Center, which serves as a back-up for the supply of steam. In October 2021 the Hadera Power Plant was connected to Infinya by way of a direct electricity line.

Tzomet Energy Ltd. (“OPC Tzomet”)

In April 2019, OPC Tzomet received a conditional license for construction of the Tzomet power plant. In December 2019, OPC Tzomet received tariff approval from the IEA for the power plant. Under the tariff approval, the commercial operation date is expected to be 36 months from the completion of financial closing as described above. Subject to completion of the power plant and receipt of a permanent generation license, OPC Tzomet will be entitled to tariffs in respect of sale of availability and energy to the System Operator for a period of twelve months commencing from the date of receipt of the permanent generation license. It is noted that the connection study OPC Tzomet received included approval of a reduced availability tariff in 2023, pursuant to the decision of the IEA.

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Note 11 – Subsidiaries (Cont’d)

Lease of OPC Tzomet land

In January 2020, Israel Lands Authority (“ILA”) approved allotment of an area measuring about 8.5 hectares for the construction of the Tzomet Power Plant (hereinafter in this Section – the “Land”). ILA signed a development agreement with Kibbutz Netiv Halamed Heh (hereinafter – the “Kibbutz”) in connection with the Land, which is valid up to November 5, 2024 (hereinafter – the “Development Agreement”), which after fulfilment of its conditions a lease agreement will be signed for a period of 24 years and 11 months from approval of the transaction, i.e. up to November 4, 2044. Tzomet Netiv Limited Partnership (“Joint Company’) own the rights in the Land, and the composition is as follows i) General Partner of the Tzomet Netiv Limited Partnership holds 1%, in which the Kibbutz and OPC Tzomet hold 26% and 74% respectively, ii) Limited partners hold 99%, where the Kibbutz (26%) and OPC Tzomet (73%) hold rights as limited partners.

In February 2020, an updated lease agreement was also signed whereby the Joint Company, as the owner of the Land, will lease the Land to OPC Tzomet, for the benefit of the project.

In January 2020, a financial specification was received from ILA in respect of the capitalization fees, whereby value of the Land (not including development expenses) of about NIS 207 million (approximately $60 million) (not including VAT) was set (hereinafter – “the Initial Assessment”). OPC Tzomet, on behalf of the Joint Company, arranged payment of the Initial Assessment in January 2020 at the rate of 75% of amount of the Initial Assessment and provided through OPC, the balance, at the rate of 25% as a bank guarantee in favor of ILA. In January 2021, a final assessment was received from ILA where the value of the usage fees in the land for a period of 25 years, to construct a power plant with a capacity of 396 MW was NIS 200 million (approximately $62 million) (the “Final Assessment”). In March 2021, a reimbursement of NIS 7 million (approximately $2 million), which included linkage differences and interest in respect of the difference between capitalized fees paid and the Final Assessment amount, was received. In addition, the bank guarantee was also reduced by the amount of 25% of said difference.

In February 2021, the Joint Company submitted a legal appeal regarding the Final Assessment amount, which the ILA dismissed in August 2021. In November 2021, the Joint Company filed an assessor objection.

As at December 31, 2022, the amounts paid in respect of the land was classified in the consolidated statement of financial position under “Right‑of‑use assets, net”. The unpaid balance of the Initial Assessment of approximately NIS 4 million (approximately $2 million) [2021: NIS 52 million (approximately $17 million)] was classified in the consolidated statement of financial position as at December 31, 2022 as current maturities of lease liabilities.

OPC Sorek 2 Ltd. (“OPC Sorek 2”)

In May 2020, OPC Sorek 2 signed an agreement with SMS IDE Ltd., which won a tender of the State of Israel for construction, operation, maintenance and transfer of a seawater desalination facility on the “Sorek B” site (the “Sorek B Desalination Facility”), where OPC Sorek 2 will construct, operate and maintain an energy generation facility (“Sorek B Generation Facility) with a generation capacity of about 87 MW on the premises of the Sorek 2 Desalination Facility, and will supply the energy required for the Sorek B Desalination Facility for a period of 25 years after the operation date of the Sorek B Desalination Facility. At the end of the aforesaid period, ownership of the Sorek B Generation Facility will be transferred to the State of Israel. OPC undertook to construct the Sorek B Generation Facility within 24 months from the date of approval of the National Infrastructure Plan (approved in November 2021), and to supply energy at a specific scope of capacity to the Sorek B Desalination Facility.

Establishment of the Sorek B Generation Facility is contingent on, among other things, completion of the planning and/or licensing processes and receipt of approval with respect to the ability to output electricity from the site, which as at the submission date of the report had not yet been received.

Additional subsidiaries in Israel

OPC Holdings Israel Ltd. (“OPC Holdings Israel”)

In May 2022, OPC formed a new subsidiary, OPC Holdings Israel and entered into an investment and share exchange transaction with Veridis to hold and operate all of OPC’s business activities in the energy and electricity generation and supply sectors in Israel (“Veridis Transaction”). Refer to Note 30 for further details.

F - 46

Note 11 – Subsidiaries (Cont’d)

OPC Operations Ltd. (“Hadera Operations Company”)

In July 2016, OPC Hadera engaged in an agreement for the ongoing operation and maintenance of the Hadera Power Plant with Hadera Operations Company, for a period of 20 years from the date of commencement of commercial operation. Under the engagement, Hadera Operations Company undertook to provide services to the Hadera Power Plant in the construction, maintenance and operation of Hadera Power Plant after its commercial operation. In October 2019, OPC provided a corporate execution guarantee of NIS 21 million (approximately $6 million) to secure the commitments of Hadera Operations Company towards OPC Hadera.

AGS Rotem Ltd. (“Rotem 2”)

Rotem 2 is a privately-held company that is advancing the construction of a power plant on land adjacent to the Rotem Power Plant. As at December 31, 2022, OPC held 80% of the issued and paid up share capital of Rotem 2 and the remaining shares of Rotem 2 are held by Veridis. Subsequent to the year-end, Rotem 2 is a wholly-owned subsidiary of OPC Holdings Israel. Refer to Note 30 for further details.

OPC Gas Limited Partnership (“OPC Gas”)

OPC Gas is a limited partnership that, as part of the Group's energy production and supply activity, supplies natural gas for OPC’s needs, including for OPC’s projects to establish energy generation facilities at the consumer's premises, as well as selling natural gas to third parties.

OPC Hadera Expansion Ltd. (“OPC Hadera 2”)

OPC Hadera 2 is involved in the construction of a power plant for the generation of electricity using natural gas on land owned by Infinya located adjacent to the Hadera Power Plant. OPC Hadera 2 entered into an agreement with Infinya to lease a 6.8 hectares plot near the Hadera Power Plant, which had its lease option extended in December 2022 by 5 years. In December 2022, NIS 8 million (approximately $2 million) was paid to Infinya for the exercise of the option.

Gnrgy Ltd. (“Gnrgy”)

Gnrgy is a private company offering electric vehicles charging services. In April 2021, OPC entered into an agreement to purchase an interest in Gnrgy, whose business focuses on e-mobility charging stations. Pursuant to the purchase agreement, in May 2021 OPC acquired a 27% interest for a consideration of NIS 25 million (approximately $8 million), and in December 2021 acquired a further 24% interest for a consideration of NIS 42 million (approximately $14 million), of which NIS 13 million (approximately $4 million) was paid in installments bearing 5% additional interest. As at December 31, 2022, OPC held a 51% (2021: 51%) interest in Gnrgy.

Gnrgy's founder retained the remaining interests in Gnrgy and entered into a shareholders’ agreement with OPC, which among other things gave OPC an option to acquire a 100% interest in Gnrgy (the “Purchase Option”). The exercise price of the Purchase Option will be derived from the fair value of Gnrgy on the exercise date, assuming an agreed‑to rate, but no less than a price based on the value of the original transaction. The exercise period of the Purchase Option will be the period of time determined after approval of Gnrgy’s financial statements for each of the years 2024 through 2026.

To the extent the entire exercise period of the Purchase Option passes without OPC exercising the Purchase Option, and on the assumption that no capital investments have been made in Gnrgy so as to dilute the founder’s share and subject to additional conditions stipulated in the shareholders’ agreement, the founder has an option to acquire shares of Gnrgy from OPC such that after the acquisition, he will hold 2% more than OPC in Gnrgy’s share capital, and will once again become the controlling shareholder of Gnrgy. In addition, to the extent OPC does not exercise the Purchase Option within the first period for exercise of the Purchase Option, and the founder will hold less than 15% of Gnrgy’s share capital, the founder will have an option to require OPC purchase his shares based on the fair value that will be determined in accordance with that stated in the shareholders’ agreement at a discount rate as provided in the agreement.

In July 2021, Gnrgy received a virtual supply license.

F - 47

Note 11 – Subsidiaries (Cont’d)

CPV Group LP (“CPV Group”)

CPV Group is engaged in the development, construction and management of power plants using renewable energy and conventional energy (power plants running on natural gas of the advanced‑generation combined‑cycle type) in the United States. The CPV Group holds rights in active power plants that it initiated and developed – both in the area of conventional energy and in the area of renewable energy. In addition, through an asset management group the CPV Group is engaged in provision of management services to power plants in the United States using a range of technologies and fuel types, by means of signing asset‑management agreements, usually for short to medium periods. Refer to Note 9.C for further details on associates of CPV Group.

OPC Power Ventures LP (“OPC Power”)

In October 2020, OPC signed a partnership agreement (the “Partnership Agreement” and the “Partnership”, where applicable) with three financial entities to form OPC Power, whereby the limited partners in the Partnership are OPC which holds a 70% interest, Clal Insurance Group which holds a 12.75% interest, Migdal Insurance Group which holds a 12.75% interest, and a corporation from Poalim Capital Markets which holds a 4.5% interest.

The General Partner of the Partnership, a wholly-owned company of OPC, will manage the Partnership’s business as its General Partner, with certain material actions (or which may involve a conflict of interest between the General Partner and the limited partners), requiring approval of a majority of a special majority (according to the specific action) of the institutional investors which are limited partners. The General Partner is entitled to management fees and success fees subject to meeting certain achievements.

OPC also entered into an agreement with entities from the Migdal Insurance Group with respect to their holdings in the Partnership, whereby OPC granted said entities a put option, and they granted OPC a call option (to the extent that the put option is not exercised), which is exercisable after 10 years in certain circumstances.

The total investment undertakings and provision of shareholders’ loans provided by all partners under the Partnership Agreement pro rata to the holdings discussed above is $1,215 million. The amount is designated for acquisition of all the rights in the CPV Group and for financing additional investments.

In 2021, OPC and the holders of the non-controlling interests provided OPC Power in partnership capital and loans of approximately $657 million and $204 million respectively. The loans are denominated in dollars and bear interest at an annual rate of 7%. The loan principal is repayable at any time, but not later than January 2028. The accrued interest is to be paid on a quarterly basis. To the extent the payment made by OPC Power is lower than the amount of the accrued interest, the payment in respect of the balance will be postponed to the next quarter, but not later than January 2028. In January 2021, the loans and rights of OPC Power were subsequently transferred to ICG Energy, Inc. OPC Power holds 99.99% of the CPV Group, and the remaining interest is held by the General Partner of the Partnership.

In 2022, the Limited Partners in the Partnership provided OPC Power with equity investments totaling $122 million (NIS 409 million) and provided it with loans for a total amount of $38 million (NIS 127 million), respectively, each in accordance with its proportionate share. As December 31, 2022, total investments in the Partnership’s equity and the outstanding balance of the loans (including accrued interest) amount to $779 million (approximately NIS 2,741 million), and $271 million (approximately NIS 953 million), respectively. Subsequent to the reporting date, further investments in equity and shareholders’ loans totaling NIS 370 million ($103 million) and NIS 115 million ($32 million), respectively, were advanced. As at the date of the approval of the financial statements, the total balance of investment undertakings and shareholders’ loans of all partners is estimated at $135 million (NIS 475 million).

Acquisition of CPV Group

On January 25, 2021 (“Transaction Completion Date”), the Group acquired 70% of the rights and holdings in CPV Power Holdings LP; Competitive Power Ventures Inc.; and CPV Renewable Energy Company Inc through the limited partnership, CPV Group LP (the “Buyer”). For the year ended December 31, 2021, the Group’s consolidated results comprised results of the CPV Group from Transaction Completion Date through to year end.

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Note 11 – Subsidiaries (Cont’d)

On the Transaction Completion Date, in accordance with the mechanism for determination of the consideration as defined in the acquisition agreement, the Buyer paid the sellers approximately $648 million, and about $5 million for a deposit which remains in the CPV Group.

OPC partially hedged its exposure to changes in the cash flows from payments in US dollars in connection with the agreement for acquisition of the CPV Group by means of forward transactions and dollar deposits. OPC chose to designate the forward transactions as an accounting hedge. On the Transaction Completion Date, OPC recorded an amount of approximately NIS 103 million (approximately $32 million) that was accrued in a hedge capital reserve to the investment cost in the CPV Group.

The contribution of the CPV Group to the Group’s revenue and consolidated loss from the acquisition date until December 31, 2021 amounted to $51 million and $47 million, respectively.

Following the acquisition of CPV Group, the fair value of identifiable assets and liabilities as of the acquisition date had been determined to be $580 million. Accordingly, goodwill of $105 million (including goodwill arising from hedging) was recognized, which reflects the potential of future activities of CPV Group in the market in which it operates.

Issuances of new shares by OPC

In October 2020, OPC published a shelf offer report for issuance of ordinary shares of NIS 0.01 par value each to the public through a uniform offer with a range of quantities by means of a tender on the price per unit and the quantity. Kenon submitted bids for participation in the tender at prices not less than the uniform price determined in the tender, and as part of the issuance it was issued 10,700,200 shares for a consideration of approximately $101 million. A total of 23,022,100 shares were issued to the public. The gross proceeds from the issuance amount to approximately NIS 737 million (approximately $217 million) and the issuance expenses amounted to approximately NIS 5 million (approximately $1 million).

In addition, in October 2020, OPC completed a private offer of 11,713,521 ordinary shares to institutional entities from the Clal group and Phoenix group. The price per ordinary share with respect to each of the offerees was NIS 29.88, which was determined through negotiations between the offerees. The gross proceeds from the issuance amount to approximately NIS 350 million (approximately $103 million) and the issuance expenses amount to approximately NIS 5 million (approximately $1 million). Following completion of the share issuances in 2020, as at December 31, 2020 Kenon registered a decrease of 8% in equity interest in OPC from 70% to 62%. Accordingly, in 2020 the Group recognized $136 million in non-controlling interests and $182 million in accumulated profits arising from changes in the Group’s proportionate share of OPC.

In February 2021, OPC issued to Altshuler Shaham Ltd. and entities managed by Altschuler Shalam (collectively, the “Offerees”), 10,300,000 ordinary shares of NIS 0.01 par value each. The price of the shares issued to the Offerees was NIS 34 per ordinary share, and the gross proceeds from the issuance was about NIS 350 million (approximately $106 million). The issuance expenses were about NIS 4 million (approximately $1 million). Accordingly, the Group recognized $63 million in non-controlling interests and $42 million in accumulated profits arising from changes in the Group’s proportionate share of OPC.

In July 2022, OPC issued to the public 9,443,800 ordinary shares of NIS0.01 par value each. The issuance was carried out by way of uniform offering with a quantity range, and a tender for the unit price and quantity. Gross issuance proceeds amounted to NIS 331 million (approximately $94 million), and issuance expenses were approximately NIS 9 million (approximately $2 million). Kenon took part in the issuance, and was issued 3,898,000 ordinary shares for a gross amount of $39 million.

In September 2022, OPC issued to qualified investors 12,500,000 ordinary shares of NIS 0.01 par value each. Gross issuance proceeds amounted to NIS 500 million (approximately $141 million), and issuance expenses were approximately NIS 6 million (approximately $1 million). Kenon did not take part in the issuance.

Following completion of the share issuances in 2022, Kenon registered a decrease of 4% in equity interest in OPC from 59% to 55%. Accordingly, the Group recognized $136 million in non-controlling interests and $58 million in accumulated profits arising from changes in the Group’s proportionate share of OPC.

F - 49

Note 11 – Subsidiaries (Cont’d)

Rights issuance

In September 2021, OPC issued rights to purchase 13,174,419 ordinary OPC shares of NIS 0.01 per value each (hereinafter - the “Rights”), in connection with the development and expansion of OPC’s activity in the USA. The Rights were offered such that each holder of ordinary shares of OPC who held 43 ordinary shares was entitled to purchase one right unit comprising of three shares at a price of NIS 75 (NIS 25 per share). Through the deadline for exercising the rights, notices of exercise were received for the purchase of 13,141,040 ordinary shares (constituting approximately 99.7% of the total shares offered in the rights offering). The gross proceeds from the exercised rights amounted to approximately NIS 329 million (approximately $102 million).

In October 2021, Kenon exercised rights for the purchase of approximately 8 million shares for total consideration of approximately NIS 206 million (approximately $64 million), which included its pro rata share and additional rights it purchased during the rights trading period plus the cost to purchase these additional rights. As a result, Kenon now holds approximately 58.8% of the outstanding shares of OPC. Accordingly, the Group recognized $41 million in non-controlling interests and $60 million in accumulated profits arising from changes in the Group’s proportionate share of OPC.

Following completion of the share issuance as described in Note 11.5 and the above rights issuances in 2021, Kenon registered a decrease in equity interest in OPC from 59% to 55%. Accordingly, the Group recognized $104 million in non-controlling interests and $38 million in accumulated profits arising from changes in the Group’s proportionate share of OPC.

F - 50

Note 11 – Subsidiaries (Cont’d)

B.	The following table summarizes the information relating to the Group’s subsidiary in 2022, 2021 and 2020 that has material NCI:

	As at and for the year ended December 31,
	2022			2021			2020
	OPC Energy Ltd.			OPC Energy Ltd.			OPC Energy Ltd.
	$ Thousands
NCI percentage *		56.20	%		53.14	%		39.09	%
Current assets		419,636			346,380			693,913
Non-current assets		2,289,101			2,141,744			1,040,400
Current liabilities		(184,418	)		(230,518	)		(221,975	)
Non-current liabilities		(1,283,445	)		(1,341,962	)		(980,028	)
Net assets		1,240,874			915,644			532,310
Carrying amount of NCI		697,433			486,598			208,080


Revenue		573,957			487,763			385,625
Profit/(loss) after tax		65,352			(93,898	)		(12,583	)
Other comprehensive income		(11,249	)		74,219			(2,979	)
Profit/(loss) attributable to NCI		37,007			(54,022	)		(2,567	)
OCI attributable to NCI		(568	)		33,661			(616	)
Cash flows from operating activities		62,538			119,264			104,898
Cash flows from investing activities		(328,610	)		(256,200	)		(643,942	)
Cash flows from financing activites excluding dividends paid to NCI		285,898			311,160			489,919
Dividends paid to NCI		-			(10,214	)		(12,412	)
Effect of changes in the exchange rate on cash and cash equivalents		(13,545	)		6,717			12,566
Net increase/(decrease) in cash and cash equivalents		6,281			170,727			(48,971	)

* The NCI percentage represents the effective NCI of the Group

F - 51

Note 12 – Property, Plant and Equipment, Net

A.	Composition

	Roads, buildings and leasehold improvements			Facilities, machinery and equipment			Wind turbines			Computers			Office furniture and equipment			Assets under construction			Other			Total
	$ Thousands
Cost
Balance at January 1, 2021		72,222			763,828			-			763			1,132			127,116			43,840			1,008,901
Additions		5,709			2,527			894			-			240			252,096			5,761			267,227
Disposals		(453	)		-			(972	)		-			(150	)		-			(1,885	)		(3,460	)
Reclassification		2,242			-			-			(763	)		(808	)		-			(671	)		-
Acquisitions as part of a business		1,682			-			29,922			-			-			18,990			-			50,594
Differences in translation reserves		2,554			25,920			-			-			-			11,578			1,097			41,149

Balance at December 31, 2021		83,956			792,275			29,844			-			414			409,780			48,142			1,364,411
Additions		3,442			18,657			191			-			(8	)		185,938			46,025			254,245
Disposals		(160	)		(13,007	)		(43	)		-			-			(1,969	)		(12,769	)		(27,948	)
Reclassification		-			-			-			-			-			3			(3	)		-
Differences in translation reserves		(9,633	)		(75,558	)		-			-			-			(41,164	)		(6,016	)		(132,371	)

Balance at December 31, 2022		77,605			722,367			29,992			-			406			552,588			75,379			1,458,337

Accumulated depreciation
Balance at January 1, 2021		12,799			175,633			-			511			757			-			640			190,340
Additions		3,453			36,620			634			-			71			-			-			40,778
Disposals		(240	)		-			(71	)		-			(151	)		-			-			(462	)
Reclassification		1,585			-			-			(511	)		(434	)		-			(640	)		-
Differences in translation reserves		551			7,384			-			-			-			-			-			7,935

Balance at December 31, 2021		18,148			219,637			563			-			243			-			-			238,591
Additions		3,864			37,057			1,109			-			80			-			-			42,110
Disposals		(10	)		(13,007	)		(21	)		-			(8	)		-			-			(13,046	)
Differences in translation reserves		(3,557	)		(28,182	)		-			-			-			-			-			(31,739	)

Balance at December 31, 2022		18,445			215,505			1,651			-			315			-			-			235,916

Carrying amounts
At January 1, 2021		59,423			588,195			-			252			375			127,116			43,200			818,561
At December 31, 2021		65,808			572,638			29,281			-			171			409,780			48,142			1,125,820
At December 31, 2022		59,160			506,862			28,341			-			91			552,588			75,379			1,222,421

F - 52

Note 12 – Property, Plant and Equipment, Net (Cont’d)

B.	The amount of borrowing costs capitalized in 2022 was approximately $16 million (2021: $7 million).

C.	Fixed assets purchased on credit in 2022 was approximately $47 million (2021: $39 million).

D.	The composition of depreciation expenses from continuing operations is as follows:

	As at December 31,
	2022		2021
	$ Thousands
Depreciation and amortization included in gross profit		56,853		53,116
Depreciation and amortization charged to selling, general and administrative expenses		6,023		4,524
Depreciation and amortization from continuing operations		62,876		57,640

Note 13 – Intangible Assets, Net

A.	Composition:

	Goodwill*			PPA**		Others			Total
	$ Thousands
Cost
Balance as at January 1, 2021		21,596			-		2,372			23,968
Acquisitions as part of business combinations		118,458			110,446		3,410			232,314
Additions		-			-		1,451			1,451
Translation differences		158			-		237			395
Balance as at December 31, 2021		140,212			110,446		7,470			258,128
Additions		-			-		10,799			10,799
Translation differences		(1,599	)		-		(1,316	)		(2,915	)
Balance as at December 31, 2022		138,613			110,446		16,953			266,012

Amortization
Balance as at January 1, 2021		21,455			-		1,061			22,516
Amortization for the year		-			10,947		339			11,286
Translation differences		-			-		44			44
Balance as at December 31, 2021		21,455			10,947		1,444			33,846
Amortization for the year		-			10,569		991			11,560
Translation differences		-			-		(189	)		(189	)
Balance as at December 31, 2022		21,455			21,516		2,246			45,217

Carrying value
As at January 1, 2021		141			-		1,311			1,452
As at December 31, 2021		118,757			99,499		6,026			224,282
As at December 31, 2022		117,158			88,930		14,707			220,795

Relates mainly to goodwill arising from acquisition of CPV Group and Gnrgy of $105 million and $14 million respectively. Refer to Note 11.A.4 for further information.

Relates to the power purchase agreement from the acquisition of CPV Keenan, which is part of the CPV Group.

F - 53

Note 13 – Intangible Assets, Net (Cont’d)

B.	The total carrying amounts of intangible assets with a finite useful life and with an indefinite useful life or not yet available for use

	As at December 31,
	2022		2021
	$ Thousands
Intangible assets with a finite useful life		103,637		105,525
Intangible assets with an indefinite useful life or not yet available for use		117,158		118,757
		220,795		224,282

C.	Impairment testing of goodwill arising from acquisition of CPV Group

As part of the acquisition of the CPV Group as described in Note 11.A.4, on the acquisition date, OPC recognized goodwill of $105 million, which reflects the future growth potential of the CPV Group’s operations. In 2022, OPC reallocated the goodwill to the renewable energies segment in the United States, since it believes that this allocation reflects fairly the nature of the goodwill that had arisen from the acquisition., especially through renewable energy, which OPC recognizes as a cash-generating unit.

OPC conducted an impairment test as of December 31, 2022. OPC has considered the report from a qualified external valuer regarding the recoverable amount of the cash-generating unit based on discounted expected future cash flows provided by OPC. Projects under commercial operation and projects under construction were estimated by discounting expected future cash flows before tax by applying the discount rate, which is represented by the weighted average cost of capital (“WACC”) after tax. Projects under development were estimated at cost.

Below are the main assumptions used in the valuation:

Forecast years - represents the period spanning from January 1, 2023 to December 31, 2054, based on the estimate of the economic life of the power plants and their value as at the end of the forecast period.

Market prices and capacity - market prices (electricity, gas, capacity, etc.) were provided by an external independent appraiser, the cash flow forecasts were made for each power plant separately, taking into account the relevant electricity market (NYISO, ISO-NE, PJM and SPP) and the relevant regulation.

The annual inflation rate of 2.3% equals the derived 10-year inflation rate as of the estimate date.

The WACC - calculated for each material project separately, and ranges between 6.75% (project with agreements for sale of the entire capacity) and 8%.

OPC used a relevant discount rate reflecting the specific risks associated with the future cash flow of a cash-generating unit.

As of December 31, 2022, the recoverable amount of the cash-generating unit of CPV Group, which is relating to the renewable energies segment in the United States exceeds its book value and therefore, no impairment has been recognized for them. The fair value measurement was classified at Level 3 due to the use of input that is not based on observable market inputs in the assessment model.

As of the report date, in accordance with management's assessments regarding future industry trends, which are based on external and internal sources, OPC has not identified any key assumptions in which possible likely changes may occur, which would cause the CPV Group's recoverable amount to decrease below its carrying amount.

D.	Impairment testing of goodwill arising from acquisition of Gnrgy

As part of the acquisition of Gnrgy in December 2021, as set out in Note 11.A.1.e, OPC recognized goodwill totaling $14 million, which reflects the potential of future activities of Gnrgy in the market in which it operates.

As of December 31, 2022, the Company conducted annual impairment testing in accordance with the provisions of FRS 36. The recoverable amount of Gnrgy’s activity, which represents the lowest level in which goodwill is monitored, was set using the fair value method, net of costs to sell, based on discounting expected future cash flows.

As of December 31, 2022, Gnrgy’s recoverable amount exceeds its carrying amount, and therefore, no impairment loss was recognized in respect of goodwill. As of the report date, in accordance with management’s assessments, a reasonable change in the key assumptions used to determine the recoverable amount will not cause a recognition of an impairment loss in respect of goodwill.

F - 54

Note 14 – Long-Term Prepaid Expenses and Other Non-Current Assets

	As at December 31,
	2022		2021
	$ Thousands
Deferred expenses, net (1)		32,840		42,840
Contract costs		4,337		5,119
Other non-current assets		13,637		9,307
		50,814		57,266

(1)	Relates to deferred expenses, net for OPC’s connection fees to the gas transmission network and the electricity grid.

Note 15 – Loans and Debentures

Following are the contractual conditions of the Group’s interest-bearing loans and credit, which are measured based on amortized cost. Additional information regarding the Group’s exposure to interest risks, foreign currency and liquidity risk is provided in Note 29, in connection with financial instruments.


	As at December 31
	2022		2021
	$ Thousands
Current liabilities
Current maturities of long-term liabilities:
Loans from banks and others		26,113		21,861
Non-convertible debentures		9,497		7,125
Others		3,652		9,325
		39,262		38,311

Non-current liabilities
Loans from banks and others		610,434		596,489
Non-convertible debentures		513,375		575,314
		1,123,809		1,171,803

Total		1,163,071		1,210,114

F - 55

Note 15 – Loans and Debentures (Cont’d)

A.1	Classification based on currencies and interest rates

	Weighted-average interest rate December 31			As at December 31,
	2022			2022		2021
	%			$ Thousands

Debentures
In shekels		2.50% - 2.75	%		522,872		582,439

Loans from banks and others
In shekels		2.40% - 5.40	%		640,199		627,675

					1,163,071		1,210,114

As at December 31, 2022 and December 31, 2021, all loans and debentures relate to liabilities incurred by OPC and its subsidiaries.

A.2	Reconciliation of movements of liabilities to cash flows arising from financing activities

	Financial liabilities (including interest payable)
	Loans and credit			Loans from holders of interests that do not confer financial control			Debentures			Financial instruments designated for hedging
	$ Thousands

Balance as at January 1, 2022		488,455			139,838			586,600			(8,305	)
Changes as a result of cash flows from financing activities
Payment in respect of derivative financial instruments, net		-			-			-			(923	)
Receipt of loans		88,651			13,680			-			-
Repayment of debentures and loans		(21,601	)		(25,617	)		(5,972	)		-
Interest paid		(11,058	)		(2,094	)		(11,889	)		-
Prepaid costs for loans taken		(2,845	)		-			-			-

Net cash provided by/(used in) financing activities		53,147			(14,031	)		(17,861	)		(923	)

Effect of changes in foreign currency exchange rates		(51,435	)		(8,419	)		(68,696	)		967
Interest and CPI expenses		27,444			6,764			26,728			-
Changes in fair value, application of hedge accounting and other		(1,416	)		-			-			(7,826	)

Balance as at December 31, 2022		516,195			124,152			526,771			(16,087	)

F - 56

Note 15 – Loans and Debentures (Cont’d)

	Financial liabilities (including interest payable)
	Loans and credit			Loans from holders of interests that do not confer financial control		Debentures			Financial instruments designated for hedging
	$ Thousands

Balance as at January 1, 2021		615,403			439		304,701			11,014
Changes as a result of cash flows from financing activities
Payment in respect of derivative financial instruments		-			-		-			(13,933	)
Proceeds from issuance of debentures less issuance expenses		-			-		262,750			-
Receipt of long-term loans from banks		211,738			131,388		-			-
Repayment of loans, debentures and lease liabilities		(601,474	)		-		(5,876	)		-
Interest paid		(25,095	)		-		(6,093	)		-
Costs paid in advance in respect of taking out loans		(4,991	)		-		-			-
Net cash (used in)/provided by financing activities		(419,822	)		131,388		250,781			(13,933	)

Changes due to gain of control in subsidiaries		172,163			-		-			12,176
Effect of changes in foreign exchange rates		10,820			2,497		17,993			(487	)
Changes in fair value		-			-		-			(13,726	)
Interest in the period		38,803			4,275		13,125			-
Other changes and additions during the year		71,088			1,239		-			(3,349	)
Balance as at December 31, 2021		488,455			139,838		586,600			(8,305	)

1.	Long-term loans from banks and others

OPC Rotem

OPC Rotem financing agreement

The power plant project of OPC Rotem was financed by the project financing method (hereinafter – “Rotem Financing Agreement”) with a consortium of lenders led by Bank Leumi Le-Israel Ltd. (hereinafter respectively – “Rotem’s Lenders” and “Bank Leumi”).

In October 2021, the early repayment of the full outstanding balance of OPC Rotem’s project financing of amount NIS 1,292 million (approximately $400 million) (including early repayment fees as described below) was completed. A debt service reserve and restricted cash of amount NIS 125 million (approximately $39 million) were also released. As part of the early repayment, OPC Rotem recognized a one-off expense totaling NIS 244 million (approximately $75 million) in 2021, in respect of an early repayment fee of approximately NIS 188 million (approximately $58 million), net of tax.

In proportion to their interests in OPC Rotem, OPC and Veridis extended to OPC Rotem loans for the financing of the early repayment of amounts NIS 904 million (approximately $291 million) and NIS 226 million (approximately $72 million), respectively, totaling NIS 1,130 million (approximately $363 million) (hereinafter - the “Shareholders’ Loans”). The Shareholders' Loans bear annual interest at the higher of 2.65% or interest in accordance with Section 3(J) of the Israel Income Tax Ordinance, whichever is higher. The Shareholders’ Loans shall be repaid in quarterly unequal payments in accordance with the mechanism set in the Shareholders’ Loans agreement, and in any case no later than October 2031. A significant portion of OPC’s portion of NIS 904 million (approximately $280 million), was funded by the issuance of Series C debentures as described in Note 15.2.A.

F - 57

Note 15 – Loans and Debentures (Cont’d)

C.	OPC Hadera

Hadera financing agreement

In July 2016, Hadera entered into a financing agreement for the senior debt (hereinafter – “the Hadera Financing Agreement”) with a consortium of lenders (hereinafter – “Hadera’s Lenders”), headed by Israel Discount Bank Ltd. (hereinafter – “Bank Discount”) and Harel Insurance Company Ltd. (hereinafter – “Harel”) to finance the construction of the Hadera Power Plant, whereby the lenders undertook to provide Hadera credit facilities, mostly linked to the CPI, in the amount of NIS 1,006 million (approximately $323 million) in several facilities (some of which are alternates): (1) a long‑term credit facility (including a facility for changes in construction and related costs); (2) a working capital facility; (3) a debt service reserves account and a VAT facility; (4) a guarantees facility; and (5) a hedge facility.

Some of the loans in the Hadera Financing Agreement are linked to the CPI and some are unlinked. The loans bear interest rates between 2.4% and 3.9% on the CPI-linked loans, and between 3.6% and 5.4% on the unlinked loans, and are repaid in quarterly installments up to 2037 and commenced from the first quarter of 2020.

In addition, OPC Hadera undertook, commencing from the commercial operation date, to provide a debt service reserve in an amount equal to the amount of the debt payments for two successive quarters (as at December 31, 2021, NIS 30 million (approximately $10 million)), and an owner’s guarantee fund of NIS 15 million (approximately $5 million).

As at December 31, 2022, OPC Hadera and OPC were in compliance with all of the covenants pursuant to the Hadera Financing Agreement. OPC Hadera has a guarantee facility in the amount of NIS 60 million (approximately $17 million) [2021: NIS 60 million (approximately $19 million of which NIS 26 million (approximately $7 million)] [2021: NIS 26 million (approximately $8 million)] has been used, a hedge facility in the amount of NIS 68 million (approximately $19 million) [2021: NIS 68 million (approximately $22 million)] (of which an insignificant amount has been used), and a working capital facility of NIS 30 million (approximately $9 million) [2021: NIS 30 million (approximately $10 million)] which has not been used.

D.	OPC Tzomet

Tzomet financing agreement

In December 2019, a financing agreement for the senior debt (project financing) was signed between OPC Tzomet and a syndicate of financing entities led by Bank Hapoalim Ltd. (hereinafter – “Bank Hapoalim”, and together with the other financing entities hereinafter – “Tzomet’s Lenders”), to finance construction of the Tzomet power plant (hereinafter – “Tzomet Financing Agreement”).

Under the Tzomet Financing Agreement, Tzomet’s Lenders undertook to provide OPC Tzomet a long‑term loan facility, a standby facility, a working capital facility, a debt service reserve, a VAT facility, third‑party guarantees and a hedge facility, in the aggregate amount of NIS 1.372 billion (approximately $441 million). Part of the amounts under these facilities will be CPI-linked and part of the amounts will be USD-linked. The loans accrue interest at the rates set out in the Tzomet Financing Agreement.

As part of the Tzomet Financing Agreement, terms were provided with reference to conversion of interest on the long-term loans from variable interest to CPI linked interest. Such a conversion will take place in three cases: (a) automatically at the end of 6 years after the signing date of the Tzomet Financing Agreement; (b) at OPC Tzomet’s request during the first 6 years commencing from the signing date of the Tzomet Financing Agreement; (c) at Bank Hapoalim’s request, in certain cases, during the first 6 years commencing from the signing date of the Tzomet Financing Agreement. In addition, OPC Tzomet has the right to make early repayment of the loans within 6 years after the signing date of the Tzomet Financing Agreement, subject to a one time reduced payment (and without payment of an early repayment penalty), and provided that up to the time of the early repayment, the loans were not converted into loans bearing fixed interest linked to the CPI. The Tzomet Financing Agreement also includes certain restrictions with respect to distributions and repayment of shareholders’ loans.

As at December 31, 2022, OPC Tzomet and OPC were in compliance with all the covenants in accordance with the Tzomet Financing Agreement. The loans are to be repaid quarterly, which will begin shortly before the end of the first or second quarter after the commencement date of the commercial operation up to the date of the final payment, which will take place on the earlier of the end of 19 years from the commencement date of the commercial operation or 23 years from the signing date of the Tzomet Financing Agreement (however not later than December 31, 2042).

F - 58

Note 15 – Loans and Debentures (Cont’d)

OPC Tzomet equity subscription agreement

In December 2019, an equity subscription agreement (hereinafter – “Tzomet’s Equity Subscription Agreement”) was signed. As part of the said agreement, OPC undertook certain commitments to the Lenders in connection with OPC Tzomet and its activities, including investment of shareholders’ equity in OPC Tzomet of about NIS 293 million (approximately $94 million). As at December 31, 2021, OPC had provided OPC Tzomet with the amount of equity that it had undertaken.

OPC

Short-term loans

As at December 31, 2022, OPC has a facility agreement for short-term credit loans of up to three years of NIS 300 million (approximately $85 million), of which NIS 100 million (approximately $28 million) is taken from Bank Mizrahi Tafahot Ltd. (“Bank Mizrahi”), a related party of the Group. The facility bore interest at the annual rate of prime plus 2% to 3%. At December 31, 2022, the unutilized credit facility was NIS 290 million (approximately $82 million).

Hedge agreement

In June 2019, OPC entered into a hedge agreement with Bank Hapoalim Ltd. for hedge of 80% of the exposure to the CPI with respect to the principal of loans from financial institutions, in exchange for payment of additional interest at the annual rate of between 1.7% and 1.76% (hereinafter – “the CPI Transactions”). OPC chose to designate the CPI Transactions as an “accounting hedge”.

In 2020 and 2021, due to changes in the inflationary expectations and in light of the changes in the projected interest rates, OPC recorded an increase in the assets and liabilities, respectively, following revaluation of the financial derivative in respect of the CPI Transactions (hereinafter – “the Derivative”), in the amount of NIS 43 (approximately $13 million) million and NIS 42 million (approximately $13 million), respectively, which was recorded as part of other comprehensive income. OPC deposits collaterals to secure its loans from the bank in connection with the Derivative. The value of the Derivative was calculated by means of discounting the linked shekel cash flows expected to be received less the discounted fixed shekel cash flows payable. An adjustment was made to this valuation for the credit risks of the parties.

F.	CPV Keenan

Keenan financing agreement

In August 2021, CPV Keenan and a number of financial entities entered into a $120 million financing agreement (hereinafter - the “Keenan Financing Agreement”). Concurrently with the closing of the Keenan Financing Agreement, CPV Keenan repaid its former financing agreement entered into in 2014 (as of the repayment date, the outstanding principal was approximately $67 million). No financial penalties were imposed on the early repayment of the former financing agreement. The previous annual interest rate was LIBOR plus a 2.25%-2.75% spread on the Term Loan, and a 1% spread on the ancillary credit facilities.

The loan and the ancillary credit facilities in the Keenan Financing Agreement shall be repaid in installments over the term of the agreement; the final repayment date is December 31, 2030. The loan and the ancillary credit facilities in the Keenan Financing Agreement shall carry an annual interest of LIBOR + 1% to 1.375%. As part of the Keenan Financing Agreement, collateral and pledges on the project's assets held by CPV Keenan were provided in favor of the lenders.

It should be noted that the Keenan Financing Agreement includes, among other things, and as customary in agreements of this type, provisions regarding mandatory prepayments, fees in respect of credit facilities, annual fees relating to the issuance of LC and additional customary terms and conditions, including hedging of the base interest rate in respect of 70% of the loan.

As at December 31, 2022, CPV Keenan utilized NIS 47 million ($13 million) of the said credit facilities.

F - 59

Note 15 – Loans and Debentures (Cont’d)

As part of the Keenan Financing Agreement, collateral and pledges on the project's assets held by CPV Keenan were provided in favor of the lenders. The Keenan Financing Agreement includes a number of restrictions, such as compliance with a minimum debt service coverage ratio of 1.15 during the 4 quarters that preceded the distribution, and a condition whereby no grounds for repayment or breach event exists (as defined in the financing agreement).

The Keenan Financing Agreement includes grounds for calling for immediate repayment as customary in agreements of this type, including, among others – breach of representations and covenants that have a material adverse effect, non-payment events, non-compliance with certain obligations, various insolvency events, termination of the activities of the project or termination of significant parties in the project (as defined in the agreement), occurrence of certain events relating to the regulatory status of the project and maintaining of government approvals, certain changes in the project’s ownership, certain events in connection with the project, existence of legal proceedings relating to the project, and a situation wherein the project is not entitled to receive payments for electricity – all in accordance with and subject to the terms and conditions, definitions and cure periods detailed in the financing agreement.

Completion of the Keenan Financing Agreement generated the CPV Group approximately $26 million in cash (after making payments in respect of: repayment of CPV Keenan's previous outstanding loan balance, transaction costs, early closing of an interest rate hedging transaction of approximately $11 million, and additional costs). Similarly, in light of the repayment of CPV Keenan’s previous financing, in the reporting period, the Group recognized a gain on derecognition of financial liability of $3 million under Financing income.

OPC Power

Shareholder loans

In 2021, OPC (through a wholly-owned subsidiary) and non-controlling interests provided loans to OPC Power in the amounts of $143 million and $61 million, respectively. In 2022, OPC (through a wholly owned subsidiary) and non-controlling interests provided additional loans to OPC Power in the amounts of $27 million and $11 million, respectively. The loans bear annual interest at a rate of 7%. The loan principal will be repayable at any time as will be agreed on between the parties, but no later than January 2028. Accrued interest is payable on a quarterly basis. To the extent that payment made by OPC Power is lower than the amount of the accrued interest, payment in respect of the balance will be postponed to the following quarter – but not later than January 2028.

2.	Debentures

OPC

Series B Debentures

In April 2020, OPC issued debentures (Series B) with a par value of NIS 400 million (approximately $113 million), which were listed on the TASE. As a result, approximately $111 million representing the par value, net of issuance cost is recognized as debentures. The debentures are linked to the Israeli consumer price index and bear annual interest at the rate of 2.75%. The principal and interest of the debentures (Series B) are repayable every six months, commencing on March 31, 2021 (on March 31 and September 30 of every calendar year) through September 30, 2028.

In October 2020, OPC issued additional Series B debentures of par value NIS 556 million (approximately $162 million) (the “Expansion of Series B”). The gross proceeds of the issuance amount to approximately NIS 584 million (approximately $171 million) and the issuance costs were approximately NIS 7 million (approximately $2 million).

A trust certificate was signed between OPC and Reznik Paz Nevo Trusts Ltd. in April 2020, which details customary grounds for calling the debentures for immediate repayment (subject to cure periods), including insolvency events, liquidation proceedings, receivership, a stay of proceedings and creditors’ arrangements, certain structural changes, a significant worsening in OPC’s financial position, etc. The trust certificate also includes a commitment of OPC to comply with certain financial covenants and restrictions.

At December 31, 2022, OPC meets the said financial covenants, as follows: (1) OPC’s equity is NIS 9,532 million (approximately $2,709) [2021: NIS 2,270 million (approximately $730 million) (minimum required is NIS 250 million, and for purposes of a distribution, NIS 350 million)]; (2) OPC's equity to asset ratio is 65% [2021: 55% (minimum required is 17%, and for purposes of distribution, 27%)]; (3) the ratio between net consolidated financial debt less the financial debt designated for the construction of projects that have not yet started generating EBITDA and adjusted EBITDA is 5.6 [2021: 7.3 (maximum allowed is 13, and for purposes of a distribution, 11)].

F - 60

Note 15 – Loans and Debentures (Cont’d)

Series C Debentures

In September 2021, OPC issued Series C debentures at a par value of NIS 851 million (approximately $266 million), with the proceeds designated primarily for the early repayment of OPC Rotem’s financing (refer to Note 15.1.B). The debentures are listed on the TASE, are not CPI-linked and bear annual interest of 2.5%. The debentures shall be repaid in twelve semi-annual and unequal installments (on February 28 and August 31) as set out in the amortization schedule, starting on February 28, 2024 through August 31, 2030 (the first interest payment is due on February 28, 2022). The issuance expenses amounted to about NIS 9 million (approximately $3 million). OPC is required to comply with certain financial covenants and restrictions.

As at December 31, 2022, OPC meets the said financial covenants, as follows: (1) OPC’s shareholders’ equity was NIS 9,532 million (approximately $2,709 million [2021: NIS 2,270 million (approximately $730 million)] (minimum required is NIS 1 billion, and for purposes of a distribution, NIS 1.4 billion); (2) the ratio of OPC’s shareholders’ equity to OPC’s total assets was 65% (2021: 55% ) (minimum required is 20%, and for purposes of distribution, 30%); (3) the ratio of the net consolidated financial debt less the financial debt designated for construction of projects that have not yet commenced producing EBITDA and Adjusted EBITDA is 5.6 (2021 :7.3) (maximum allowed is 13, and for purposes of a distribution, 11); (4) equity to consolidated balance sheet ratio of 46% (2021: 37%) (minimum required is 17%).

Note 16 – Trade and Other Payables

	As at December 31,
	2022		2021
	$ Thousands

Trade Payables		95,036		136,505
Accrued expenses and other payables		10,833		11,479
Government institutions		2,083		2,459
Employees and payroll institutions		14,491		11,625
Interest payable		4,472		5,213
Others		6,500		4,256
		133,415		171,537

Note 17 – Right-Of-Use Assets, Net and Lease Liabilities

A)	The Group leases the following items:

Land

In Israel, the leases are typically entered into with government institutions for the construction and operation of OPC Power Plants’s power plants. They typically run for a period of more than 20 years, with an option for renewal. In the United States, the leases are typically entered into with private companies or individuals for the development, construction and operation of the CPV Group’s power plants.

ii)

OPC gas transmission infrastructure

The lease for the gas Pressure Regulation and Measurement Station (“PRMS”) relates to the facility at OPC Hadera’s power plant. For further details, please refer to Note 18.B.

iii)

Offices

The leases range from 3 to 9 years, with options to extend.

iv)

Low-value items

The total for low-value items on short-term leases are not material. Accordingly, the Group has not recognized right-of-use assets and lease liabilities for these leases.

F - 61

Note 17 – Right-Of-Use Assets, Net and Lease Liabilities (Cont’d)

B)	Right-of-use assets

	As at December 31, 2022
	Balance at beginning of year		Depreciation charge for the year			Adjustments			Balance at end of year
	$ Thousands

Land		81,355		(3,484	)		(908	)		76,963
PRMS facility		6,239		(660	)		8,398			13,977
Offices		10,282		(2,142	)		213			8,353
Others		7		(6	)		(1	)		-
		97,883		(6,292	)		7,702			99,293

	As at December 31, 2021
	Balance at beginning of year		Depreciation charge for the year			Adjustments		Balance at end of year
	$ Thousands

Land		77,011		(3,375	)		7,719		81,355
PRMS facility		6,514		(480	)		205		6,239
Offices		2,499		(1,716	)		9,499		10,282
Others		-		-			7		7
		86,024		(5,571	)		17,430		97,883

C)	Amounts recognized in the consolidated statements of profit & loss and cash flows

	As at December 31,		As at December 31,
	2022		2021
	$ Thousands		$ Thousands

Interest expenses in respect of lease liability		572		550

Total cash outflow for leases		2,572		1,993

Note 18 – Contingent Liabilities and Commitments

A.	Contingent Liabilities

OPC Rotem Power Purchase Agreement

In 2014 (commencing in August), letters were exchanged between OPC Rotem and IEC regarding the tariff to be paid by OPC Rotem to IEC in respect of electricity that it had purchased from the electric grid, in connection with sale of electricity to private customers, where the electricity generation in the power plant was insufficient to meet the electricity needs of such customers.

It is OPC Rotem’s position that the applicable tariff is the “ex-post” tariff, whereas according to IEC in the aforesaid exchange of letters, the applicable tariff is the TAOZ tariff, and based on part of the correspondences even a tariff that is 25% higher than the TAOZ tariff (and some of the correspondences also raise allegations of default of the PPA with IEC). In order to avoid a specific dispute, Rotem paid IEC the TAOZ tariff for the aforesaid purchase of electricity and commencing from that date, it pays IEC the TAOZ tariff on the purchase of electricity from IEC for sale to private customers.

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Note 18 – Contingent Liabilities and Commitments (Cont’d)

IEC raised contentions regarding past accountings in respect of the acquisition cost of energy for OPC Rotem’s customers in a case of a load reduction of the plant by the System Operator, and collection differences due to non-transfer of meter data in the years 2013 through 2015. In addition, IEC stated its position with respect to additional matters in the arrangement between the parties relating to the acquisition price of surplus energy and the acquisition cost of energy by OPC Rotem during performance of tests. OPC Rotem’s position regarding the matters referred to by IEC, based on its legal advisors, is different and talks are being held between the parties.

In March 2022, OPC Rotem and the IEC signed a settlement agreement regarding past accounting in respect of the acquisition cost of energy for OPC Rotem’s customers in a case of a load reduction of the plant by Noga, and collection differences due to non-transfer of meter data between 2013 and 2015. As part of the settlement, OPC Rotem paid a total of approximately $2 million (approximately NIS 5.5 million) to the IEC. Subsequent to this, the System Operator contacted OPC Rotem with a claim that OPC Rotem had transmitted excess energy without coordinating the transmission with the System Operator, to which OPC Rotem disputes the claim.

As at December 31, 2022, in OPC Rotem’s estimation, it is more likely than not that OPC Rotem will not pay any additional amounts in respect of the period ended December 31, 2022. Therefore, no provision was included in the financial statements.

Construction agreements

OPC Hadera

In January 2016, an agreement was signed between OPC Hadera and SerIDOM Servicios Integrados IDOM, S.A.U (“IDOM”), for the design, engineering, procurement and construction of a cogeneration power plant, in consideration of about approximately $185 million (approximately NIS 639 million) (as amended several times as part of change orders, including an amendment made in 2019 and described below), which is payable on the basis of the progress of the construction and compliance with milestones (hereinafter – “the Hadera Construction Agreement”).

IDOM has provided bank guarantees and a corporate guarantee of its parent company to secure the said obligations, and OPC has provided a corporate guarantee to IDOM, in the amount of $10.5 million, to secure part of OPC Hadera’s liabilities. In addition, as part of an addendum to OPC Hadera’s construction agreement which was signed in October 2018, the parties agreed to waiver of past claims up to the signing date of the addendum.

In accordance with the construction agreement, OPC Hadera is entitled to certain compensation from IDOM in respect of the delay in completion of the construction of the Hadera Power Plant or compensation (limited to the amount of the limit set in the Agreement) in the event of failure to comply with the terms set out in the Agreement with regard to the Power Plant performance. The said compensation is capped by the amounts specified in the construction agreement, and up to an aggregate of $36 million.

According to the Construction Agreement, OPC Hadera has a contractual right to deduct any amount due to it under the Construction Agreement, including for the foregoing compensation, from any amounts that it owes to the construction contractor. In 2022, OPC Hadera deducted a total of $14 million from amounts payable to the construction contractor in respect of the final milestones.

As at December 31, 2022, an arbitration proceeding was conducted between OPC Hadera and the construction contractor, of which a hearing is scheduled for in June 2024.

OPC Tzomet

In September 2018, OPC Tzomet signed a planning, procurement and construction agreement (hereinafter – “the Agreement”) with PW Power Systems LLC (hereinafter – “Tzomet Construction Contractor” or “PWPS”), for construction of the Tzomet project. The Agreement is a “lump sum turnkey” agreement wherein the Tzomet Construction Contractor committed to construct the Tzomet project in accordance with the technical and engineering specifications determined and includes various undertakings of the contractor.

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Note 18 – Contingent Liabilities and Commitments (Cont’d)

In OPC Tzomet’s estimation, based on the work specifications, the aggregate consideration that will be paid in the framework of the Agreement is about $300 million, and it will be paid based on the milestones provided. Pursuant to the Agreement, the Tzomet Construction Contractor undertook to complete the construction work of the Tzomet project, including the acceptance tests by January 2023.

The continuity of construction has been affected by COVID-19 due to the need to transport equipment and foreign crews to the site. As of December 31, 2022, the Company believes that the construction period of the OPC Tzomet Power Plant is expected to end in the first half of 2023. Delays in the completion of the construction work beyond the original date scheduled in OPC Tzomet’s conditional license might affect OPC Tzomet’s ability to meet its undertakings in connection with the construction of the project.

Agreements for the acquisition of natural gas

OPC Rotem and OPC Hadera

OPC Rotem and OPC Hadera has an agreement with Tamar Group in connection to the supply of natural gas to the power plants. Both OPC Rotem and OPC Hadera undertook to continue to consume all the gas required for its power plants from Tamar Group (including quantities exceeding the minimum quantities) up to the completion date of the commissioning of the Karish Reservoir, except for a limited consumption of gas during the commissioning period of the Karish Reservoir.

In December 2017, OPC Rotem, OPC Hadera, Israel Chemicals Ltd. and Bazan Ltd., engaged in agreements with Energean Israel Ltd. (hereinafter – “Energean”), which has holdings in the Karish Reservoir, for the purchase natural gas. In 2020, Energean notified OPC that “force majeure” events happened during the year, in accordance with the clauses pursuant to the agreements, and that the flow of the first gas from the Karish reservoir is expected to take place during the second half of 2021. OPC rejected the contentions that a “force majeure” event is involved.

Due to the delay in supply of the gas from the Karish Reservoir, OPC Rotem and OPC Hadera will be required to acquire the quantity of gas it had planned to acquire from Energean for purposes of operation of the power plants at present gas prices, which is higher than the price stipulated in the Energean agreement. The delays in the commercial operation date of Energean, and in turn, a delay in supply of the gas from the Karish Reservoir, will have an unfavorable impact on OPC’s profits. In the agreements with Energean, compensation for delays had been provided, the amount of which depends on the reasons for the delay, where the limit with respect to the compensation in a case where the damages caused is “force majeure” is lower. It is noted that the damages that will be caused to OPC stemming from a delay could exceed the amount of the said compensation.

In 2021, OPC Rotem and OPC Hadera received reduced compensation of approximately $3 million (approximately NIS 9 million) and approximately $2 million (approximately NIS 7 million), respectively.

In May 2022, an amendment to the Energean Agreements was signed, which set out, among other things, arrangements pertaining to bringing forward the reduction of the quantities of gas supplied by OPC Rotem and OPC Hadera, of which the scope of reduction was not yet determined as at December 31, 2022.

Other contingent liabilities

Bazan electricity purchase claim

In November 2017, a request was filed with the Tel Aviv-Jaffa District Court to approve a derivative claim on behalf of Bazan. The request is based on the petitioner's contention that the undertaking in the electricity purchase transaction between Bazan and OPC Rotem is an extraordinary interested party transaction that did not receive the approval of the general assembly of Bazan shareholders on the relevant dates. The respondents to the request include Bazan, OPC Rotem, the Israel Corporation Ltd. and the members of Bazan's Board of Directors at the time of entering into the electricity purchase transaction. The requested remedies include remedies such as an injunction and financial remedies.

F - 64

Note 18 – Contingent Liabilities and Commitments (Cont’d)

In July 2018, OPC Rotem submitted its response to the request. Bazan’s request for summary judgement was denied. Negotiations are being held for entering into a compromise agreement that will settle a lawsuit against Rotem and others, which was filed in July 2022. As at December 2022, OPC filed a settlement agreement for approval with the Court. In February 2023, the Court handed down a judgement that approves the settlement agreement, of which the settlement amount is immaterial to OPC.

Oil Refineries Ltd. (now known as “Bazan”) gas purchase claim

In January 2018, a request was filed with the Tel Aviv-Jaffa District Court to approve a derivative claim by a shareholder of Bazan against former and current directors of Bazan, Israel Chemicals Ltd., OPC Rotem, OPC Hadera and IC (collectively the "Group Companies"), over: (1) a transaction of the Group Companies for the purchase of natural gas from Tamar Partners, (2) transactions of the Group Companies for the purchase of natural gas from Energean Israel Ltd. (“Energean”) and (3) transaction for sale of surplus gas to Bazan.

In August 2018, the Group Companies submitted their response to the claim filed. OPC rejected the contentions appearing in the claim and requested summary dismissal of the claim. Evidentiary hearings were held in the second half of 2021, after which summations were submitted in November 2022.

Based on advice from OPC’s legal advisors, it is more likely than not that the claim will not be accepted by the Court and, accordingly, no provision has been included in the financial statements in respect of the claim as at December 31, 2022.

Purchase of rights in Alon Energy Centers Limited Partnership

In June 2022, OPC Holdings Israel entered into an agreement with Dor Alon Energy Israel (1988) Ltd. and Dor Alon Gas Power Plants Limited Partnership for the purchase of rights in Alon Energy Centers Limited Partnership, a partnership which owns a combined-cycle power plant powered by conventional energy with installed capacity of 75 MW located in the Kiryat Gat Industrial Zone. The consideration of the purchase is NIS 535 million (approximately $160 million), subject to adjustments for cash balances and working capital. The consideration is also subject to adjustments in connection with repayment or non-repayment of senior debt extended to the power plant as agreed between the parties to the purchase agreement.

In accordance with the terms of the Acquisition Agreement, including adjustments made thereto, the Acquirer will acquire the sold rights in consideration for NIS 870 million ($248 million) (hereinafter - the “Consideration”), which will be paid on the transaction completion date except for a total of NIS 300 million ($86 million) that will be paid by December 31, 2023. Completion of the transaction is subject to certain conditions being fulfilled and approvals obtained. As of the approval date of the financial statements, the completion of the transaction is subject to the fulfillment of conditions precedent on the dates set in the Acquisition Agreement and through March 31, 2023. As of the approval date of the financial statements, all of the conditions precedent have yet to be met.

Inkia Energy Limited (liquidated in 2019)

As part of the sale described in Note 26, Inkia Energy Limited (“Inkia”) agreed to indemnify the buyer and its successors, permitted assigns, and affiliates against certain losses arising from a breach of Inkia’s representations and warranties and certain tax matters, subject to certain time and monetary limits depending on the particular indemnity obligation. These indemnification obligations were supported by (a) a three-year pledge of shares of OPC which represented 25% of OPC’s outstanding shares, (b) a deferral of $175 million of the sale price in the form of a four-year $175 million Deferred Payment Agreement, accruing interest at 8% per year and payable in-kind, and (c) a three-year corporate guarantee from Kenon for all of the Inkia’s indemnification obligations, all of the foregoing periods running from the closing date of December 31, 2017. In December 2018, the indemnification commitment was assigned by Inkia to a fellow wholly owned subsidiary of Kenon.

In October 2020, as part of an early repayment of the deferred payment agreement where Kenon received $218 million ($188 million net of taxes), Kenon agreed to increase the number of OPC shares pledged to the buyer of the Inkia business to 55,000,000 shares and to extend the pledge of OPC shares and the corporate guarantee from Kenon for all of Inkia’s indemnification obligations until December 31, 2021.

In March 2022, 53,500,000 shares were released from pledge, and 1,500,000 shares of OPC remain pledged in light of an indemnity claim relating to a tax assessment claim in the amount of $11 million.

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Note 18 – Contingent Liabilities and Commitments (Cont’d)

B.	Commitments

OPC Power Plants

OPC entered into long-term service maintenance contracts for its operating power plants. The number of maintenance hours and price are specified in the agreements.

OPC entered into long-term infrastructure contracts with Israel National Gas Lines Ltd. (“INGL”) for use of PRMS at its operating power plants. The price is specified in the agreements.

OPC entered into long-term PPAs with its customers (of which some included construction of generation facilities) for sale of electricity and gas. The supply quantity, period and pricing are specified in the agreements. OPC has also entered into long-term PPAs with its suppliers for purchase of electricity and gas. The minimum purchase quantity, period and pricing are specified in the agreements.

OPC entered into long-term construction agreements for constructing its power plants. The price, technical and engineering specifications, and work milestones are specified in the agreements. For more information relating to the construction of the Tzomet power plant, refer to 18.A.2.b.

Note 19 – Share Capital and Reserves

A.	Share Capital

	Company
	No. of shares
	(’000)
	2022		2021
Authorised and in issue at January, 1		53,879		53,871
Issued for share plan		8		8
Authorised and in issue at December. 31		53,887		53,879

All shares rank equally with regards to Company’s residual assets. The holders of ordinary shares are entitled to receive dividends as declared from time to time, and are entitled to one vote per share at meetings of the Company. All issued shares are fully paid with no par value.

The capital structure of the Company comprises of issued capital and accumulated profits and the capital structure is managed to ensure that the Company will be able to continue to operate as a going concern. The Company is not subjected to externally imposed capital requirements.

In 2022, 8,037 (2021: 7,958) ordinary shares were granted under the Share Incentive Plan to key management at an average price of $47.22 (2021: $29.41) per share.

B.	Translation reserve

The translation reserve includes all the foreign currency differences stemming from translation of financial statements of foreign activities as well as from translation of items defined as investments in foreign activities commencing from January 1, 2007 (the date IC first adopted International Financial Reporting Standards).

C.	Capital reserves

The capital reserve reflects the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge (i.e. the portion that is offset by the change in the cash flow hedge reserve).

Approximately 407 thousand (2021: 4.7 million) share options of ZIM were exercised, resulting in a proportionate share of increase in capital reserve attributable to owners of the Company of $5.5 million (2021: $5.4 million). Approximately 272 thousand (2021: 250 thousand) share options of OPC were exercised, resulting in an increase in capital reserve attributable to owners of the Company of $2.7 million (2021: $1.6 million).

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Note 19 – Share Capital and Reserves (Cont’d)

Dividends

In October 2020, Kenon’s shareholders approved a cash dividend of $2.23 per share (an aggregate amount of approximately $120 million), to Kenon’s shareholders of record as of the close of trading on November 3, 2020, paid on November 10, 2020.

In April 2021, Kenon’s board of directors approved a cash dividend of $1.86 per share (an aggregate amount of approximately $100 million), to Kenon’s shareholders of record as of the close of trading on April 29, 2021, paid on May 6, 2021.

In November 2021, Kenon’s board of directors approved a cash dividend of $3.50 per share (an aggregate amount of approximately $189 million), to Kenon’s shareholders of record as of the close of trading on January 19, 2022, paid on January 27, 2022.

E.	Kenon's share plan

Kenon has established a Share Incentive Plan for its directors and management. The plan provides grants of Kenon shares, as well as stock options in respect of Kenon’s shares, to directors and officers of the Company pursuant to awards, which may be granted by Kenon from time to time, representing up to 3% of the total issued shares (excluding treasury shares) of Kenon. During 2022, 2021 and 2020, Kenon granted awards of shares to certain members of its management. Such shares are vested upon the satisfaction of certain conditions, including the recipient’s continued employment in a specified capacity and Kenon’s listing on each of the NYSE and the TASE. The fair value of the shares granted in 2022 is $267 thousand (2021: $234 thousand, 2020: $267 thousand) and was determined based on the fair value of Kenon’s shares on the grant date. Kenon recognized $292 thousand as general and administrative expenses in 2022 (2021: $258 thousand, 2020: $350 thousand).

F.	Capital reduction

In May 2022 and June 2022, Kenon received shareholder approval at its annual general meeting and approval of the High Court of the Republic of Singapore, respectively, for a capital reduction to return share capital amounting to $10.25 per share ($552 million in total) to Kenon’s shareholders of record as of the close of trading on June 27, 2022, paid on July 5, 2022.

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Note 20 – Revenue

	For the Year Ended December 31,
	2022		2021		2020
	$ Thousands
Revenue from sale of electricity and infrastructure services in Israel		486,680		419,395		369,421
Revenue from sale of electricity in US		25,780		25,605		-
Revenue from sale of steam in Israel		18,476		17,648		16,204
Revenue from provision of services in US		31,509		25,115		-
Other revenue in Israel		11,512		-		845
		573,957		487,763		386,470

Note 21 – Cost of Sales and Services (excluding Depreciation and Amortization)

	For the Year Ended December 31,
	2022		2021		2020
	$ Thousands
Fuels		155,760		153,122		135,706
Electricity and infrastructure services		192,723		133,502		125,782
Salaries and related expenses		30,598		21,095		7,244
Generation and operating expenses and outsourcing		17,283		16,798		8,625
Insurance		5,190		4,989		3,503
Others		15,707		6,792		1,226
		417,261		336,298		282,086

Note 22 – Selling, General and Administrative Expenses

	For the Year Ended December 31,
	2022		2021		2020
	$ Thousands
Payroll and related expenses (1)		46,660		41,930		11,360
Depreciation and amortization		3,259		2,623		1,023
Professional fees		15,798		16,069		8,386
Business development expenses		15,186		1,566		1,998
Expenses in respect of acquisition of CPV Group		-		752		12,227
Office maintenance		4,581		3,022		936
Other expenses		14,452		9,765		14,027
		99,936		75,727		49,957

(1) A portion of this relates to profit sharing for CPV Group employees

The fair value of the CPV Group’s Profit-Sharing Plan is recognized as an expense, against a corresponding increase in liability, over the period in which the unconditional right to payment is achieved. The liability is remeasured at each reporting date until the settlement date. Any change in the fair value of the liability is recognized in the consolidated statements of profit and loss. In 2022, the CPV Group recorded expenses in the amount of approximately NIS 46 million (approximately $13 million) [2021: NIS 50 million (approximately $15 million)].

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Note 23 – Financing Expenses, Net

	For the Year Ended December 31,
	2022			2021			2020
	$ Thousands

Interest income from bank deposits		12,108			167			780
Amount reclassified to consolidated statements of profit & loss from capital reserve in respect of cash flow hedges		4,125			2,121			-
Net change in exchange rates		28,453			-			-
Net change in fair value of derivative financial instruments		-			443			-
Interest income from deferred payment		-			-			13,511
Other income		-			203			-
Financing income		44,686			2,934			14,291

Interest expenses to banks and others		(47,542	)		(51,924	)		(24,402	)
Amount reclassified to consolidated statements of profit & loss from capital reserve in respect of cash flow hedges		-			-			(6,300	)
Impairment loss on debt securities at FVOCI		(732	)		-			-
Net change in fair value of financial assets held for trade		(45	)		-			-
Net change in exchange rates		-			(5,997	)		(5,645	)
Net change in fair value of derivative financial instruments		(291	)		-			(1,569	)
Early repayment fee (Note 15.B, Note 15.E)		-			(84,196	)		(11,852	)
Other expenses		(1,787	)		(2,178	)		(1,406	)
Financing expenses		(50,397	)		(144,295	)		(51,174	)
Net financing expenses		(5,711	)		(141,361	)		(36,883	)

Note 24 – Income Taxes

A.	Components of the Income Taxes

	For the Year Ended December 31,
	2022			2021			2020
	$ Thousands
Current taxes on income
In respect of current year		39,559			6,892	*		734
In respect of prior years		-			-			1
Deferred tax expense/(income)
Creation and reversal of temporary differences		(1,579	)		(2,567	)*		3,963
Total tax expense on income		37,980			4,325			4,698

* The Group made an immaterial correction of reclassification error of $21 million in income taxes on income and deferred tax income as at December 31, 2021.

No previously unrecognized tax benefits were used in 2020, 2021 or 2022 to reduce our current tax expense.

F - 69

Note 24 – Income Taxes (Cont’d)

B.	Reconciliation between the theoretical tax expense (benefit) on the pre-tax income (loss) and the actual income tax expenses

	For the Year Ended December 31,
	2022			2021			2020
	$ Thousands
Profit from continuing operations before income taxes		387,639			879,642			500,447
Statutory tax rate		17.00	%		17.00	%		17.00	%
Tax computed at the statutory tax rate		65,899			149,539			85,076

(Decrease) increase in tax in respect of:
Elimination of tax calculated in respect of the Group’s share in profit of associated companies		(45,464	)		(190,539	)		(27,353	)
Different tax rate applicable to subsidiaries operating overseas		6,429			(9,297	)		-
Income subject to tax at a different tax rate		116			-			441
Non-deductible expenses		158,811			44,851			1,028
Exempt income		(164,822	)		(23,937	)		(61,415	)
Taxes in respect of prior years		(739	)		(361	)		1
Tax in respect of foreign dividend		18,447			28,172			-
Share of non-controlling interests in entities transparent for tax purposes		(1,082	)		5,528			-
Tax losses and other tax benefits for the period regarding which deferred taxes were not recorded		511			95			7,647
Other differences		(126	)		274			(727	)
Tax expense on income included in the statement of profit and loss		37,980			4,325			4,698

C.	Deferred tax assets and liabilities

1.	Deferred tax assets and liabilities recognized

The deferred taxes are calculated based on the tax rate expected to apply at the time of the reversal as detailed below. Deferred taxes in respect of subsidiaries were calculated based on the tax rates relevant for each country.

F - 70

Note 24 – Income Taxes (Cont’d)

The deferred tax assets and liabilities are derived from the following items:

	Property plant and equipment			Carryforward of losses and deductions for tax purposes			Financial instruments			Other*			Total
	$ Thousands
Balance of deferred tax (liability) asset as at January 1, 2021		(95,674	)		1,691			1,816			5,205			(86,962	)
Changes recorded on the statement of profit and loss		(23,591	)		106,643			49			(80,534	)		2,567
Changes recorded in other comprehensive income		-			-			(423	)		(2,847	)		(3,270	)
Change as a result of sale of subsidiary		(4,050	)		2,882			(232	)		(5,350	)		(6,750	)
Translation differences		(3,915	)		1,126			50			(27	)		(2,766	)
Balance of deferred tax (liability) asset as at December 31, 2021		(127,230	)		112,342			1,260			(83,553	)		(97,181	)
Changes recorded on the statement of profit and loss		(20,103	)		8,116			(235	)		13,801			1,579
Changes recorded in other comprehensive income		-			-			(2,657	)		(4,439	)		(7,096	)
Translation differences		14,615			(4,370	)		(103	)		(147	)		9,995
Balance of deferred tax (liability) asset as at December 31, 2022		(132,718	)		116,088			(1,735	)		(74,338	)		(92,703	)

*	This amount includes deferred tax arising from intangibles, undistributed profits, non-monetary items, associated companies and trade receivables distribution.

The deferred taxes are presented in the statements of financial position as follows:

	As at December 31,
	2022			2021
	$ Thousands
As part of non-current assets		6,382			19,016	*
As part of current liabilities		(1,285	)		(21,117	)
As part of non-current liabilities		(97,800	)		(95,080	)*
		(92,703	)		(97,181	)

* The Group made an immaterial correction of classification error of $30 million in non-current deferred taxes from assets to liabilities as at December 31, 2021.

Income tax rate in Israel is 23% for the years ended December 31, 2022, 2021 and 2020. The tax rate applicable to US companies are (i) federal corporate tax of 21% and (ii) state tax ranging from 4% to 11.5%. According to the provisions of the tax treaty between Israel and the United States, interest payments are subject to withholding tax of 17.5%, and dividend payments are subject to withholding tax of 12.5%. In Singapore, the corporate tax rate is 17%. Dividends received by Kenon from ZIM, an associated company incorporated in Israel, is subject to a withholding tax rate of 5%.

On January 4, 2016, Amendment 216 to the Income Tax Ordinance (New Version) – 1961 (hereinafter – “the Ordinance”) was passed in the Knesset. As part of the amendment, OPC’s and Hadera’s income tax rate was reduced by 1.5% to a rate of 25% as from 2016. Furthermore, on December 22, 2016 the Knesset plenum passed the Economic Efficiency Law (Legislative Amendments for Achieving Budget Objectives in the Years 2017 and 2018) – 2016, by which, inter alia, the corporate tax rate would be reduced from 25% to 23% in two steps. The first step will be to a rate of 24% as from January 2017 and the second step will be to a rate of 23% as from January 2018.

As a result of reducing the tax rate to 23%, the deferred tax balance as at December 31, 2022 and 2021 were calculated according to the new tax rates specified in the Economic Efficiency Law (Legislative Amendments for Achieving Budget Objectives in the years 2017 and 2018), at the tax rate expected to apply on the reversal date.

F - 71

Note 24 – Income Taxes (Cont’d)

Tax and deferred tax balances not recorded

Unrecognized deferred tax assets

	As at December 31,
	2022		2021
	$ Thousands
Losses for tax purposes		153,907		167,758

According to Israeli tax law, there is no time limit on the utilization of tax losses and the utilization of the deductible temporary differences. Deferred tax assets were not recognized for these items, since it is not expected that there will be taxable income in the future, against which the tax benefits can be utilized.

In the United States, as of December 31, 2022, the Group had loss carryforwards for which no deferred taxes have been created, as detailed below:

•

Net operating losses for tax purposes of $108 million, which may be offset for tax purposes in the United States against future income, subject to complying with the conditions of the law, some of which are not under the OPC’s control and, therefore, OPC did not recognize deferred tax assets in respect thereof. These losses will expire in 2027-2037.

•

$2 million in tax credits, offsetable for tax purposes in the United States against future profits in the United States, are subject to complying with the conditions of the law, some of which are not under the OPC’s control and, therefore, OPC did not recognize deferred tax assets. These losses will expire in 2027-2037.

Unrecognized deferred tax liabilities

The tax effect on taxable temporary differences of $32 million (2021: $112 million) has not been recorded as this arises from undistributed profits of the Group’s associated companies which the Group does not expect to incur.

Safe harbor rules

Singapore does not impose taxes on disposal gains, which are considered to be capital in nature, but imposes tax on income and gains of a trading nature. As such, whenever a gain is realized on the disposal of an asset, the practice of the Inland Revenue Authority of Singapore is to rely upon a set of commonly-applied rules in determining the question of capital (not taxable) or revenue (taxable). Under Singapore tax laws, any gains derived by a divesting company from its disposal of ordinary shares in an investee company between June 1, 2012 and December 31, 2027 are generally not taxable if, immediately prior to the date of such disposal, the divesting company has held at least 20% of the ordinary shares in the investee company for a continuous period of at least 24 months.

F - 72

Note 25 – Earnings per Share

Data used in calculation of the basic / diluted earnings per share

A.	Profit allocated to the holders of the ordinary shareholders

	For the year ended December 31,
	2022		2021		2020
	$ Thousands
Profit for the year attributable to Kenon’s shareholders		312,652		930,273		507,106
Profit for the year from discontinued operations (after tax) attributable to Kenon’s shareholders		-		-		8,476
Profit for the year from continuing operations attributable to Kenon’s shareholders		312,652		930,273		498,630

B.	Number of ordinary shares

	For the year ended December 31
	2022		2021		2020
	Thousands
Weighted Average number of shares used in calculation of basic/diluted earnings per share		53,885		53,879		53,870

Note 26 – Discontinued Operations

(a)	I.C. Power (Latin America businesses)

In December 2017, Kenon, through its wholly-owned subsidiary Inkia, sold its Latin American and Caribbean power business to an infrastructure private equity firm, I Squared Capital (“ISQ”). As a result, the Latin American and Caribbean businesses were classified as discontinued operations.

Kenon’s subsidiaries are entitled to receive payments in connection with certain claims held by companies within Inkia’s businesses. In 2020, following the completion of a tax review related to the sale, Kenon recognized income of $8 million, net of taxes.

Set forth below are the results attributable to the discontinued operations

	Year ended December 31, 2022		Year ended December 31, 2021		Year ended December 31, 2020
	$ Thousands
Recovery of retained claims		-		-		9,923
Income taxes		-		-		(1,447	)
Profit after income taxes		-		-		8,476

Net cash flows provided by investing activities		-		-		8,476

F - 73

Note 27 – Segment, Customer and Geographic Information

Financial information of the reportable segments is set forth in the following tables:

	OPC Israel			CPV Group			ZIM			Others*			Total
	$ Thousands
2022
Revenue		516,668			57,289			-			-			573,957

Profit before taxes		23,728			61,039			305,376			(2,504	)		387,639
Income tax expense		(9,522	)		(9,892	)		-			(18,566	)		(37,980	)
Profit/(loss) from continuing operations		14,206			51,147			305,376			(21,070	)		349,659

Depreciation and amortization		47,134			15,519			-			223			62,876
Financing income		(10,301	)		(25,197	)		-			(9,188	)		(44,686	)
Financing expenses		42,062			7,521			-			814			50,397
Other items:
Losses related to ZIM		-			-			727,650			-			727,650
Share in profit of associated companies		-			(85,149	)		(1,033,026	)		-			(1,118,175	)
		78,895			(87,306	)		(305,376	)		(8,151	)		(321,938	)

Adjusted EBITDA		102,623			(26,267	)		-			(10,655	)		65,701

Segment assets		1,503,811			552,569			-			636,263			2,692,643
Investments in associated companies					652,358			427,059			-			1,079,417
														3,772,060
Segment liabilities		1,226,395			241,468			-			8,279			1,476,142

	OPC Israel			CPV Group			ZIM			Others*			Total
	$ Thousands
2021
Revenue		437,043			50,720			-			-			487,763

(Loss)/profit before taxes		(57,040	)		(60,709	)		1,260,789			(263,398	)		879,642
Income tax benefit/(expense)		10,155			13,696			-			(28,176	)		(4,325	)
(Loss)/profit from continuing operations		(46,885	)		(47,013	)		1,260,789			(291,574	)		875,317

Depreciation and amortization		44,296			13,102			-			242			57,640
Financing income		(2,730	)		(37	)		-			(167	)		(2,934	)
Financing expenses		119,392			24,640			-			263			144,295
Other items:
Losses related to Qoros		-			-			-			251,483			251,483
Losses related to ZIM		-			-			204			-			204
Share in losses/(profit) of associated companies		419			10,425			(1,260,993	)		-			(1,250,149	)
		161,377			48,130			(1,260,789	)		251,821			(799,461	)

Adjusted EBITDA		104,337			(12,579	)		-			(11,577	)		80,181

Segment assets		1,481,149			431,474			-			226,337			2,138,960
Investments in associated companies		-			545,242			1,354,212			-			1,899,454
														4,038,414
Segment liabilities		1,324,217			218,004			-			215,907			1,758,128

F - 74

Note 27 – Segment, Customer and Geographic Information (Cont’d)

	OPC Israel			CPV Group		ZIM			Others*			Total
	$ Thousands
2020
Revenue		385,625			-		-			845			386,470

(Loss)/profit before taxes		(8,620	)		-		210,647			298,420			500,447
Income tax expense		(3,963	)		-		-			(735	)		(4,698	)
(Loss)/profit from continuing operations		(12,583	)		-		210,647			297,685			495,749

Depreciation and amortization		33,981			-		-			190			34,171
Financing income		(354	)		-		-			(13,937	)		(14,291	)
Financing expenses		50,349			-		-			825			51,174
Other items:
Net gains related to Qoros		-			-		-			(309,918	)		(309,918	)
Write back of impairment of investment		-			-		(43,505	)		-			(43,505	)
Share in losses/(profit) of associated companies		-			-		(167,142	)		6,248			(160,894	)
		83,976			-		(210,647	)		(316,592	)		(443,263	)

Adjusted EBITDA		75,356			-		-			(18,172	)		57,184

Segment assets		1,723,967			-		-			461,218			2,185,185
Investments in associated companies		-			-		297,148			-			297,148
													2,482,333
Segment liabilities		1,200,363			-		-			5,962			1,206,325

* Financial information of Quantum were consolidated into a single segment, “Others”, as it is no longer a material reportable segment. Refer to Note 10 for further details.

A.	Customer and Geographic Information

Major customers

Following is information on the total sales of the Group to material customers and the percentage of the Group’s total revenues (in $ Thousands):

	2022						2021						2020
Customer	Total revenues			Percentage of revenues of the Group			Total revenues			Percentage of revenues of the Group			Total revenues			Percentage of revenues of the Group

Customer 1		107,081			18.66	%		93,959			19.26	%		86,896			22.48	%
Customer 2		73,518			12.81	%		70,801			14.52	%		74,694			19.33	%
Customer 3		-	*		-	*		-	*		-	*		-	*		-	*
Customer 4		-	*		-	*		-	*		-	*		-	*		-	*
Customer 5		-	*		-	*		-	*		-	*		-	*		-	*

* Represents an amount less than 10% of the revenues.

F - 75

Note 27 – Segment, Customer and Geographic Information (Cont’d)

Information based on geographic areas

The Group’s geographic revenues are as follows:

	For the year ended December 31,
	2022		2021		2020
	$ Thousands
Israel		516,668		437,043		385,625
United States		57,289		50,720		-
Others		-		-		845
Total revenue		573,957		487,763		386,470

The Group’s non-current assets* on the basis of geographic location:

	As at December 31,
	2022		2021
	$ Thousands
Israel		1,050,386		1,039,505
United States		392,734		310,426
Others		96		171
Total non-current assets		1,443,216		1,350,102

* Composed of property, plant and equipment and intangible assets.

Note 28 – Related-party Information

A.	Identity of related parties:

The Group’s related parties include Kenon’s beneficial owners and Kenon’s subsidiaries, affiliates and associates companies. Kenon’s immediate holding company is Ansonia Holdings Singapore B.V. A discretionary trust, in which Mr. Idan Ofer is the ultimate beneficiary, indirectly holds 100% of Ansonia Holdings Singapore B.V.

In the ordinary course of business, some of the Group’s subsidiaries and affiliates engage in business activities with each other.

Ordinary course of business transactions are aggregated in this note. Other than disclosed elsewhere in the consolidated financial statements during the period, the Group engaged the following material related party transactions.

Key management personnel of the Company are those persons having the authority and responsibility for planning, directing and controlling the activities of the Company. The directors, CEO and CFO are considered key management personnel of the Company.

B.	Transactions with directors and officers (Kenon's directors and officers):

Key management personnel compensation

	For the year ended December 31,
	2022		2021
	$ Thousands
Short-term benefits		2,229		1,994
Share-based payments		292		258
		2,521		2,252

F - 76

Note 28 – Related-party Information (Cont’d)

C.	Transactions with related parties (including associates):

	For the year ended December 31,
	2022			2021			2020
	$ Thousands
Sale of electricity and revenues from provision of services		94,264			88,004			80,416
Cost of sales		(658	)		7,802			16
Dividend received from associate		727,309			143,964			-
Other income, net		-			(337	)		(90	)
Financing expenses, net		580			39,901			2,156
Interest expenses capitalized to property plant and equipment		-			-			119

D.	Balances with related parties (including associates):

	As at December 31,
	2022			2021
	Other related parties *
	$ Thousands
Cash and cash equivalent		176,246			89,814
Short-term deposits and restricted cash		35,662			-
Trade receivables and other receivables		15,421			14,860
Other payables		(535	)		(424	)

Loans and Other Liabilities
In US dollar or linked thereto		(34,524	)		(27,587	)

* IC, Israel Chemicals Ltd (“ICL”), Oil Refineries Ltd (“Bazan”).

These balances relate to amounts with entities that are related to Kenon's beneficial owners.

E.	For further investment by Kenon into OPC, see Note 11.A.5 and 11.A.6.

F - 77

Note 29 – Financial Instruments

General

The Group has international activity in which it is exposed to credit, liquidity and market risks (including currency, interest, inflation and other price risks). In order to reduce the exposure to these risks, the Group holds derivative financial instruments, (including forward transactions, interest rate swap (“SWAP”) transactions, and options) for the purpose of economic (not accounting) hedging of foreign currency risks, inflation risks, commodity price risks, interest risks and risks relating to the price of inputs.

This note presents information about the Group’s exposure to each of the above risks, and the Group’s objectives, policies and processes for measuring and managing the risk.

The risk management of the Group companies is executed by them as part of the ongoing current management of the companies. The Group companies monitor the above risks on a regular basis. The hedge policies with respect to all the different types of exposures are discussed by the boards of directors of the companies.

The comprehensive responsibility for establishing the base for the risk management of the Group and for supervising its implementation lies with the Board of Directors and the senior management of the Group.

B.	Credit risk

Counterparty credit risk is the risk that the financial benefits of contracts with a specific counterparty will be lost if a counterparty defaults on their obligations under the contract. This includes any cash amounts owed to the Group by those counterparties, less any amounts owed to the counterparty by the Group where a legal right of set-offs exists and also includes the fair values of contracts with individual counterparties which are included in the financial statements. The maximum exposure to credit risk at each reporting date is the carrying value of each class of financial assets mentioned in this note.

(1)

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk as at year end was:

	As at December 31,
	2022		2021
	$ Thousands
	Carrying amount
Cash and cash equivalents		535,171		474,544
Short-term and long-term deposits and restricted cash		61,136		21,692
Trade receivables and other assets		122,797		97,580
Short-term and long-term derivative instruments		16,730		9,103
Other investments		344,780		-
		1,080,614		602,919

Based on the credit risk profiles of the Group’s counterparties relating to the Group’s cash and cash equivalents, short-term and long-term deposits and restricted cash, trade receivables and other assets, short-term and long-term derivative instruments, the Group has assessed expected credit losses on the financial assets to be immaterial. The maximum exposure to credit risk for trade receivables as at year end, by geographic region was as follows:

	As at December 31,
	2022		2021
	$ Thousands
Israel		67,177		56,632
Other regions		6,723		6,011
		73,900		62,643

F - 78

Note 29 – Financial Instruments (Cont’d)

(2)

Aging of debts

Set forth below is an aging of the trade receivables:

	As at December 31
	2022		2021
	$ Thousands
Not past due nor impaired		73,900		62,643

No ECL has been recorded on any trade receivable amounts based on historical credit loss data and the Group’s view of economic conditions over the expected lives of the receivables.

Debt securities

The following table provides information about the ECL on other investments as at December 31, 2022:

	For the year ended December 31,
	2022		2021		2020
	$ Thousands
Impairment loss on debt securities at FVOCI		732		-		-

C.	Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and adverse credit and market conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages its liquidity risk by means of holding cash balances, short-term deposits, other liquid financial assets and credit lines.

Set forth below are the anticipated repayment dates of the financial liabilities, including an estimate of the interest payments. This disclosure does not include amounts regarding which there are offset agreements:

	As at December 31, 2022
	Book value		Projected cash flows		Up to 1 year		1-2 years		2-5 years		More than 5 years
	$ Thousands
Non-derivative financial liabilities
Trade payables		95,036		95,036		95,036		-		-		-
Other current liabilities		17,681		17,681		17,681		-		-		-
Lease liabilities including interest payable *		37,570		46,938		17,812		2,855		6,756		19,515
Debentures (including interest payable) *		526,771		588,997		22,413		66,467		223,939		276,178
Loans from banks and others including interest *		640,348		793,946		44,142		74,438		172,343		503,023

		1,317,406		1,542,598		197,084		143,760		403,038		798,716

* Includes current portion of long-term liabilities.

F - 79

Note 29 – Financial Instruments (Cont’d)

	As at December 31, 2021
	Book value		Projected cash flows		Up to 1 year		1-2 years		2-5 years		More than 5 years
	$ Thousands
Non-derivative financial liabilities
Trade payables		136,505		136,505		136,505		-		-		-
Other current liabilities		204,686		204,686		204,686		-		-		-
Lease liabilities including interest payable *		33,395		38,375		19,492		2,602		6,232		10,049
Debentures (including interest payable) *		586,600		669,883		21,326		24,431		236,364		387,762
Loans from banks and others including interest *		628,293		772,875		44,244		70,895		325,201		332,535

Financial liabilities – hedging instruments
Forward exchange rate contracts		5,014		6,368		6,230		138		-		-
Other forward exchange rate contracts		1,199		1,790		1,790		-		-		-

		1,595,692		1,830,482		434,273		98,066		567,797		730,346

* Includes current portion of long-term liabilities.

D.	Market risks

Market risk is the risk that changes in market prices, such as foreign exchange rates, the CPI, interest rates and prices of capital products and instruments will affect the fair value of the future cash flows of a financial instrument.

The Group buys and sells derivatives in the ordinary course of business, and also incurs financial liabilities, in order to manage market risks. All such transactions are carried out within the guidelines set by the Boards of Directors of the companies. For the most part, the Group companies enter into hedging transactions for purposes of avoiding economic exposures that arise from their operating activities. Most of the transactions entered into do not meet the conditions for recognition as an accounting hedge and, therefore, differences in their fair values are recorded on the statement of profit and loss.

(1)

CPI and foreign currency risk

Currency risk

The Group’s functional currency is the U.S. dollar. The exposures of the Group companies are measured with reference to the changes in the exchange rate of the dollar vis-à-vis the other currencies in which it transacts business.

The Group is exposed to currency risk on sales, purchases, assets and liabilities that are denominated in a currency other than the respective functional currencies of the Group entities. The primary exposure is to the Shekel (“NIS”).

The Group uses options and forward exchange contracts on exchange rates for purposes of hedging short-term currency risks, usually up to one year, in order to reduce the risk with respect to the final cash flows in dollars deriving from the existing assets and liabilities and sales and purchases of goods and services within the framework of firm or anticipated commitments, including in relation to future operating expenses.

The Group is exposed to currency risk in relation to loans it has taken out and debentures it has issued in currencies other than the dollar. The principal amounts of these bank loans and debentures have been hedged by swap transactions the repayment date of which corresponds with the payment date of the loans and debentures.

F - 80

Note 29 – Financial Instruments (Cont’d)

The Group has no exposure to foreign currency risk in respect of non‑hedging derivative financial instruments in 2022, relevant information for 2021 is as follows:

		As at December 31, 2021
	Currency/ linkage receivable	Currency/ linkage payable	Amount receivable		Amount payable		Expiration dates		Fair value
			$ Thousands

Forward contracts on exchange rates	Dollar	NIS		3,135		9,746		2022		3
Forward contracts on exchange rates	EURO	NIS		4,929		18,571		2022		(1,199	)
Call options on foreign currency	Dollar	NIS		17,828		67,231		2022		4

The Group’s exposure to foreign currency risk in respect of non‑hedging derivative financial instruments is as follows:

As at December 31, 2022

Currency/
linkage
receivable

Currency/
linkage
payable

Amount
receivable

Amount
payable

Expiration
dates

Fair value

$ Thousands

Forward contracts on exchange rates

Dollar

NIS

5,566

18,912

2023

641

As at December 31, 2021

Currency/
linkage
receivable

Currency/
linkage
payable

Amount
receivable

Amount
payable

Expiration
dates

Fair value

$ Thousands

Forward contracts on exchange rates

Dollar

NIS

33,333

109,259

2022-2023

(5,014

)

Inflation risk

The Group has CPI-linked loans. The Group is exposed to payments of higher interest and principal as the result of an increase in the CPI. It is noted that part of the Group’s anticipated revenues will be linked to the CPI. The Group does not hedge this exposure beyond the expected hedge included in its revenues.

F - 81

Note 29 – Financial Instruments (Cont’d)

a.	Breakdown of CPI-linked derivative instruments

The Group’s exposure to index risk with respect to derivative instruments used for hedging purposes is shown below:

As at December 31, 2022

Index receivable

Interest payable

Expiration date

Amount of linked principal

Fair value

$ Thousands

CPI-linked derivative instruments

Interest exchange contract

CPI

1.76

2036

89,619

9,353

As at December 31, 2021

Index receivable

Interest payable

Expiration date

Amount of linked principal

Fair value

$ Thousands

CPI-linked derivative instruments

Interest exchange contract

CPI

1.76

2036

107,598

7,369

For additional details, please refer to Note 15.1.E.

F - 82

Note 29 – Financial Instruments (Cont’d)

b.	Exposure to CPI and foreign currency risks

The Group’s exposure to CPI and foreign currency risk, based on nominal amounts, is as follows:

	As at December 31, 2022
	Foreign currency
	Shekel
	Unlinked			CPI linked			Other

Non-derivative instruments
Cash and cash equivalents		165,186			-			1,102
Short-term deposits and restricted cash		35,695			-			-
Trade receivables		10,007			-			-
Other current assets		58,006			-			212
Long-term deposits and restricted cash		15,146			-			-
Total financial assets		284,040			-			1,314

Trade payables		36,669			-			14,734
Other current liabilities		20,930			5,494			640
Loans from banks and others and debentures		583,651			414,071			-
Total financial liabilities		641,250			419,565			15,374

Total non-derivative financial instruments, net		(357,210	)		(419,565	)		(14,060	)
Derivative instruments		-			9,353			-
Net exposure		(357,210	)		(410,212	)		(14,060	)

	As at December 31, 2021
	Foreign currency
	Shekel
	Unlinked			CPI linked			Other

Non-derivative instruments
Cash and cash equivalents		159,838			-			1,329
Short-term deposits and restricted cash		179			-			50
Trade receivables		56,632			-			81
Other current assets		1,308			-			4
Long-term deposits and restricted cash		21,463			-			-
Total financial assets		239,420			-			1,464

Trade payables		59,381						11,842
Other current liabilities		23,536			7,044			190
Loans from banks and others and debentures		592,102			459,732			-
Total financial liabilities		675,019			466,776			12,032

Total non-derivative financial instruments, net		(435,599	)		(466,776	)		(10,568	)
Derivative instruments		-			7,369			(1,199	)
Net exposure		(435,599	)		(459,407	)		(11,767	)

F - 83

Note 29 – Financial Instruments (Cont’d)

c.	Sensitivity analysis

A strengthening of the dollar exchange rate by 5%–10% against the following currencies and change of the CPI in rate of 1% – 2% would have increased (decreased) the net income or net loss and the equity by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

	As at December 31, 2022
	10% increase			5% increase			5% decrease		10% decrease
	$ Thousands
Non-derivative instruments
Shekel/dollar		(7,375	)		(3,687	)		3,687		7,375
Shekel/EUR		(1,094	)		(547	)		547		1,094

	As at December 31, 2022
	2% increase			1% increase			1% decrease		2% decrease
	$ Thousands
Non-derivative instruments
CPI		(6,306	)		(3,153	)		3,153		6,306

	As at December 31, 2021
	10% increase			5% increase			5% decrease		10% decrease
	$ Thousands
Non-derivative instruments
Shekel/dollar		(9,219	)		(4,609	)		4,609		9,219
Shekel/EUR		(728	)		(364	)		364		728

	As at December 31, 2021
	2% increase			1% increase			1% decrease		2% decrease
	$ Thousands
Non-derivative instruments
CPI		(6,639	)		(3,320	)		3,320		6,201

(2)

Interest rate risk

The Group is exposed to changes in the interest rates with respect to loans bearing interest at variable rates, as well as in relation to swap transactions of liabilities in foreign currency for dollar liabilities bearing a variable interest rate.

The Group has not set a policy limiting the exposure and it hedges this exposure based on forecasts of future interest rates.

The Group enters into transactions mainly to reduce the exposure to cash flow risk in respect of interest rates. The transactions include interest rate swaps and “collars”. In addition, options are acquired and written for hedging the interest rate at different rates.

F - 84

Note 29 – Financial Instruments (Cont’d)

Type of interest

Set forth below is detail of the type of interest borne by the Group’s interest-bearing financial instruments:

	As at December 31,
	2022			2021
	Carrying amount
	$ Thousands
Fixed rate instruments
Financial assets		549,467			16,137
Financial liabilities		(837,698	)		(941,733	)
		(288,231	)		(925,596	)

Variable rate instruments
Financial assets		4,827			55,033
Financial liabilities		(324,887	)		(267,882	)
		(320,060	)		(212,849	)

The Group’s assets and liabilities bearing fixed interest are not measured at fair value through the statement of profit and loss and the Group does not designate derivatives interest rate swaps as hedging instruments under a fair value hedge accounting model. Therefore, a change in the interest rates as at the date of the report would not be expected to affect the income or loss with respect to changes in the value of fixed – interest assets and liabilities.

A change of 100 basis points in interest rate at reporting date would have (decreased)/increased profit and loss before tax by the amounts below. This analysis assumes that all variables, in particular foreign currency rates, remain constant.

	As at December 31, 2022
	100bp increase			100 bp decrease
	$ Thousands
Variable rate instruments		(3,201	)		3,201

	As at December 31, 2021
	100bp increase			100 bp decrease
	$ Thousands
Variable rate instruments		(2,128	)		2,128

A change of 1.0% – 1.5% in the LIBOR interest rate at reporting date would have increased/(decreased) the net income or net loss and the equity by the amounts below. This analysis assumes that all variables, in particular foreign currency rates, remain constant.

	As at December 31, 2022
	1.5% decrease			1.0% decrease			1.0% increase			1.5% increase
	$ Thousands

Long-term loans (US LIBOR)		1,357			904			(904	)		(1,357	)
Interest rate swaps (US LIBOR)		(959	)		(638	)		638			959

F - 85

Note 29 – Financial Instruments (Cont’d)

The Group’s exposure to LIBOR risk for derivative financial instruments used for hedging is as follows:

As at December 31, 2022

Linkage
receivable

Interest
rate

Expiration
date

Amount of the linked reserve

Fair value

$ Thousands

Interest rate swaps

USD LIBOR interest

0.93

2030

62,256

6,734

E.	Fair value

(1)

Fair value compared with carrying value

The Group’s financial instruments include mainly non-derivative assets, such as: cash and cash equivalents, investments, deposits and short-term loans, receivables and debit balances, investments and long-term receivables; non-derivative liabilities: such as: short-term credit, payables and credit balances, long-term loans, finance leases and other liabilities; as well as derivative financial instruments. In addition, fair value disclosure of lease liabilities is not required.

Due to their nature, the fair value of the financial instruments included in the Group’s working capital is generally identical or approximates the book value.

The following table shows in detail the carrying amount and the fair value of financial instrument groups presented in the financial statements not in accordance with their fair value.

	As at December 31, 2022
	Carrying amount		Fair value
Assets	$ Thousands
Other investments		344,780		344,780

Liabilities
Non-convertible debentures		526,771		492,714
Long-term loans from banks and others (excluding interest)		516,195		528,011
Loans from non-controlling interests		124,153		113,673

	As at December 31, 2021
	Carrying amount		Fair value
Liabilities	$ Thousands
Non-convertible debentures		586,600		642,077
Long-term loans from banks and others (excluding interest)		488,455		545,806
Loans from non-controlling interests		138,050		141,596

The fair value of long-term loans from banks and others (excluding interest) is classified as level 2, and measured using the technique of discounting the future cash flows with respect to the principal component and the discounted interest using the market interest rate on the measurement date.

(2) Hierarchy of fair value

The following table presents an analysis of the financial instruments measured at fair value, using an evaluation method. The various levels were defined as follows:

– Level 1: Quoted prices (not adjusted) in an active market for identical instruments.

– Level 2: Observed data, direct or indirect, not included in Level 1 above.

– Level 3: Data not based on observed market data.

F - 86

Note 29 – Financial Instruments (Cont’d)

Other investments are measured at fair value through other comprehensive income (Level 1).

Derivative instruments are measured at fair value using a Level 2 valuation method – observable data, directly or indirectly, which are not included in quoted prices in an active market for identical instruments. See Note 29.D.1 for further details.

Level 3 financial instrument measured at fair value

As at December 31, 2022, the fair value of long-term investment (Qoros) remains at zero (2021: $nil).

(3) Data and measurement of the fair value of financial instruments at Level 2 and 3

Level 2

The fair value of forward contracts on foreign currency is determined using trading programs that are based on market prices. The market price is determined based on a weighting of the exchange rate and the appropriate interest coefficient for the period of the transaction along with an index of the relevant currencies.

The fair value of contracts for exchange (SWAP) of interest rates and fuel prices is determined using trading programs which incorporate market prices, the remaining term of the contract and the credit risks of the parties to the contract.

The fair value of currency and interest exchange (SWAP) transactions is valued using discounted future cash flows at the market interest rate for the remaining term.

The fair value of transactions used to hedge inflation is valued using discounted future cash flows which incorporate the forward CPI curve, and market interest rates for the remaining term.

If the inputs used to measure the fair value of an asset or liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The fair value of marketable securities held for trade is determined using the ‘Discounts for Lack of Marketability’ (“DLOM”) valuation method, which is a method used to calculate the value of restricted securities. The method purports that the only difference between a company’s common stock and its restricted securities is the lack of marketability of the restricted securities which is derived from the price difference between both prices.

Level 3

As at December 31, 2022 and 2021, the fair value of the long-term investment (Qoros) was based on the present value of the expected cash flows. Included in the long-term investment (Qoros) are the 12% interests in Qoros (as described in Note 10.3) and the put option (as described in Note 10.2). For the purposes of management’s fair value assessment of the long-term investment (Qoros), management takes into consideration factors including market risk and credit risk exposures, publicly available information and financial information of the New Qoros Investor and Qoros for the year ended December 31, 2022 and 2021.

The following table shows the valuation techniques used in measuring Level 3 fair values as at December 31, 2022 and 2021, as well as the significant unobservable inputs used.

Type	Valuation technique	Significant unobservable data	Inter-relationship between significant unobservable inputs and fair value measurement
Long-term investment (Qoros)	The Group assessed the fair value of the long-term investment (Qoros) using the present value of the expected cash flows.	The likelihood of expected cash flows.	The estimated fair value would increase if the likelihood of expected cash flows increase.

F - 87

Note 30 – Subsequent Events

Kenon

Dividend

In March 2023, Kenon’s board of directors approved a cash dividend of $2.79 per share (an aggregate amount of approximately $150 million), payable to Kenon’s shareholders of record as of the close of trading on April 10, 2023, for payment on or about April 19, 2023.

Share repurchase plan

In March 2023, Kenon’s board of directors authorized a share repurchase plan of up to $50 million.

OPC

Veridis Transaction

In May 2022, OPC had entered into an agreement with Veridis to form OPC Holdings Israel Ltd., which will hold and operate all of OPC's business activities in the energy and electricity generation and supply sectors in Israel (“Veridis Transaction”).

In January 2023, the Veridis Transaction was completed. Following the completion of the Veridis Transaction, OPC transferred to OPC Holdings Israel, among other things, its 80% interest in OPC Rotem, its interest in Gnrgy Ltd., as well other operations in Israel including OPC Hadera, OPC Tzomet, OPC Sorek, energy generation facilities on consumers’ premises and virtual electricity supply activities, and Veridis transferred its 20% interests in OPC Rotem to OPC Holdings Israel. In addition, Veridis invested approximately $128 million (approximately NIS 452 million) in cash in OPC Holdings Israel (after adjustments to the original transaction amount which totaled NIS 425 million [$125 million]), of which approximately $118 million (approximately NIS 400 million) was used by OPC Rotem to repay a portion of the shareholders’ loans provided to OPC Rotem in 2021 by OPC and Veridis.

As a result of the Veridis Transaction, OPC holds 80% and Veridis holds the remaining 20% of OPC Holdings Israel, which holds 100% of OPC Rotem and the other business activities in the energy and electricity generation and supply sectors in Israel transferred by OPC. The financial impact is still being assessed by Kenon.

Agreement by CPV to Acquire Wind Energy Power Plants in the United States

In January 2023, CPV Group through its 100% owned subsidiary entered into an agreement to acquire all rights in four operating wind-powered electricity power plants in Maine, United States, with an aggregate capacity of 81.5 MW.

The purchase price for the acquisition is $172 million, subject to adjustments and the terms and conditions set forth in the agreement. CPV intends to finance approximately 50% of the purchase price using external financing. OPC intends to finance its portion of the remaining amount of the purchase price through its own resources, by raising equity and/or through external financing.

The agreement contains certain representations of the parties, including the sellers’ representations on the power plants, which expire on the closing date and contains waivers of certain claims CPV Group may bring against the sellers. Due to such limits to the sellers’ liability, CPV intends to obtain a standard representations and warranties insurance policy, which would limit the coverage to 10% of the purchase price and for a limited period. The acquisition is subject to conditions, including the receipt of regulatory approvals, which are expected to be obtained within the next 2 to 5 months.

ZIM

Dividend

On March 13, 2023, ZIM announced a dividend for Q4 2022 of approximately $769 million, or $6.40 per ordinary share, to be paid on April 3, 2023. Kenon expects to receive $159 million ($151 million net of tax).

Fair value of ZIM

As at the date of approval of the consolidated financial statements, the fair value of ZIM, represented by its share price, had increased which may result in a reversal of impairment in 2023. The financial impact on Kenon from the increase in market capitalization of ZIM has yet to be determined.

F - 88


	KENON HOLDINGS LTD.

Date: May 4, 2023	By:	/s/ Robert L. Rosen
		Name: Robert L. Rosen
		Title: Chief Executive Officer

	THAT the Constitution of the Company be altered by inserting a new Article 123A immediately after the existing Article 123 of the Constitution:

	“123A. (A) Whenever the Directors or the Company in General Meeting have resolved or proposed that a dividend (including an interim, final, special or other dividend) be paid or declared on shares of a particular class in the capital of the Company, the Directors may further resolve that members entitled to such dividend be entitled to elect to receive an allotment of shares of that class credited as fully paid in lieu of cash in respect of the whole or such part of the dividend as the Directors may think fit. In such case, the following provisions shall apply:	Share dividend scheme

	(a) the basis of any such allotment shall be determined by the Directors; (b) the Directors shall be entitled to determine whether to pay or satisfy a dividend in either cash and/or, in lieu of cash, shares of a particular class in the capital of the Company at the election of members, and in such case to determine the manner in which members shall be entitled to elect to receive an allotment of shares of the relevant class credited as fully paid or cash in respect of the whole or such part of any dividend in respect of which the Directors shall have passed such a resolution as aforesaid, and the Directors may make such arrangements as to the giving of notice to members, providing for forms of election for completion by members (whether in respect of a particular dividend or dividends or generally), determining the procedure for making such elections or revoking the same and the manner in which and the latest date and time by which any forms of election or other documents by which elections are made or revoked must be submitted, and otherwise make all such arrangements and do all such things, as the Directors consider necessary or expedient in connection with the provisions of this Article 123A;

	(c) the right of election may be exercised in respect of the whole of that portion of the dividend in respect of which the right of election has been accorded, provided always that the Directors may determine, either generally or in any specific case, that such right shall be exercisable in respect of the whole or any part of that portion; and

	(d) the dividend (or that part of the dividend in respect of which a right of election has been accorded) shall not be payable in cash on the shares of the relevant class in respect whereof the share election has been duly exercised (the “elected shares”) and, in lieu and in satisfaction thereof, shares of the relevant class shall be allotted and credited as fully paid to the holders of the elected shares on the basis of allotment determined as aforesaid. For such purpose and notwithstanding the provisions of Articles 128 and 129, the Directors shall (i) capitalise and apply out of the amount standing to the credit of any of the Company’s reserve accounts or any amount standing to the credit of the profit and loss account or otherwise available for distribution as the Directors may determine, such sum as may be required to pay up in full the appropriate number of shares for allotment and distribution to and among the holders of the elected shares on such basis, or (ii) apply the sum which would otherwise have been payable in cash to the holders of the elected shares towards payment of the appropriate number of shares of the relevant class for allotment and distribution to and among the holders of the elected shares on such basis.

	(B) The shares of the relevant class allotted pursuant to the provisions of Article 123A(A) shall rank pari passu in all respects with the shares of that class then in issue save only as regards participation in the dividend which is the subject of the election referred to above (including the right to make the election referred to above) or any other distributions, bonuses or rights paid, made, declared or announced prior to or contemporaneous with the payment or declaration of the dividend which is the subject of the election referred to above, unless the Directors shall otherwise specify.	Ranking of shares

	(C) The Directors may, on any occasion when they resolve as provided in Article 123A(A), determine that rights of election under that Article shall not be made available to the persons who are registered as holders of shares in the Register of Members, or in respect of shares, the transfer of which is registered, after such date as the Directors may fix subject to such exceptions as the Directors think fit, and in such event the provisions of this Article 123A shall be read and construed subject to such determination.	Record date

	(D) The Directors may, on any occasion when they resolve as provided in Article 123A(A), further determine that no allotment of shares or rights of election for shares under Article 123A(A) shall be made available or made to members whose registered addresses entered in the Register of Members is outside Singapore or to such other members or class of members as the Directors may in their sole discretion decide and in such event the only entitlement of the members aforesaid shall be to receive in cash the relevant dividend resolved or proposed to be paid or declared.	Eligibility

	(E) Notwithstanding the foregoing provisions of this Article, if at any time after the Directors’ resolution to apply the provisions of Article 123A(A) in relation to any dividend but prior to the allotment of shares pursuant thereto, the Directors shall consider that by reason of any event or circumstance (whether arising before or after such resolution) or by reason of any matter whatsoever it is no longer expedient or appropriate to implement that proposal, the Directors may at their discretion and as they deem fit in the interest of the Company and without assigning any reason therefor, cancel the proposed application of Article 123A(A).	Disapplication

	(F) The Directors may do all acts and things considered necessary or expedient to give effect to the provisions of Article 123A(A), with full power to make such provisions as they think fit in the case of shares of the relevant class becoming distributable in fractions (including, notwithstanding any provision to the contrary in this Constitution, provisions whereby, in whole or in part, fractional entitlements are disregarded or rounded up or down).”	Fractional entitlements


Goodwill	Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment; and any impairment loss is allocated to the carrying amount of the equity investee as a whole.

Other intangible assets	Other intangible assets, including licenses, patents and trademarks, which are acquired by the Group having finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

	As at December 31,
	2022		2021
	$ Thousands
Advances to suppliers		1,219		459
Inventories		1,928		1,706
Prepaid expenses		10,004		6,639
Input tax receivable		4,660		5,029
Indemnification asset (1)		-		9,047
Deposits in connection with projects under construction (2)		35,475		16,398
Others		5,670		4,101
		58,956		43,379


99.1	Proxy Statement, dated as of May 4, 2023
99.2	Notice of Annual General Meeting of Shareholders, dated as of May 4, 2023
99.3	2022 Annual Report comprising the Directors’ Statement for Kenon Holdings Ltd. and the Singapore Statutory Consolidated Audited Financial Statements of Kenon Holdings Ltd. for the Financial Year ended December 31, 2022
99.4	Proxy Card for Kenon Holdings Ltd.

(a)	(i)	allot and issue ordinary shares of the Company (“shares”); and/or

	(ii)	make or grant offers, agreements or options that might or would require shares to be allotted and issued, whether after the expiration of this authority or otherwise (including but not limited to the creation and issuance of warrants, debentures or other instruments convertible into shares),

	(b)	(notwithstanding the authority to be conferred by this resolution may have ceased to be in force) allot and issue shares in pursuance of any offer, agreement or option made or granted by our Directors while this resolution was in force,

	and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.

		(i)	in the case of a market purchase of an Ordinary Share, the highest independent bid or the last independent transaction price, whichever is higher, of our Ordinary Shares quoted or reported on the NYSE or TASE or any other stock exchange on which our Ordinary Shares may for the time being be listed and quoted (as the case may be); and
		(ii)	in the case of an off-market purchase pursuant to an equal access scheme, up to 105% of the closing price of our Ordinary Shares as quoted on the NYSE or TASE or any other stock exchange on which our Ordinary Shares may for the time being be listed and quoted (as the case may be), on the day immediately preceding the date on which we resolve on effecting the off-market purchase; and

	Years
Roads, buildings and leasehold improvements (*)	3 – 30
Facilities, machinery and equipment	5 – 30
Wind turbines	35
Computers	3
Office furniture and equipment	3 – 16
Others	5 – 15

	Years
Land	19 – 49
Pressure regulation and management system facility	24
Offices	3 – 9

							CPV						CPV						CPV						CPV						CPV						CPV
	ZIM						Fairview						Maryland						Shore						Towantic						Valley						Three Rivers
	As at December 31,
	2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021			2022			2021
	$ Thousands
Principal place of business	International						US						US						US						US						US						US
Proportion of ownership interest		21%			26%			25%			25%			25%			25%			37.5%			37.5%			26%			26%			50%			50%			10%			10%

Current assets		4,271,600			5,084,865			98,942			107,380			73,985			26,649			92,808			45,538			86,698			38,558			59,191			35,783			32,626			2,997
Non-current assets		7,353,700			4,756,973			938,869			986,321			654,720			669,668			983,576			1,039,153			936,268			952,997			678,540			705,501			1,338,392			949,385
Current liabilities		(2,662,200	)		(2,756,595	)		(166,468	)		(136,136	)		(73,883	)		(37,067	)		(53,619	)		(7,904	)		(133,746	)		(124,247	)		(542,176	)		(85,176	)		(47,939	)		(20,921	)
Non-current liabilities		(3,067,200	)		(2,485,714	)		(400,309	)		(591,169	)		(320,518	)		(356,838	)		(649,860	)		(727,037	)		(490,610	)		(538,750	)		(6,450	)		(537,310	)		(820,943	)		(708,402	)
Total net assets		5,895,900			4,599,529			471,034			366,396			334,304			302,412			372,905			349,750			398,610			328,558			189,105			118,798			502,136			223,059

Group's share of net assets		1,217,797			1,182,810			117,759			91,599			83,576			75,603			139,951			131,261			103,639			85,425			94,553			59,399			60,609			56,021
Adjustments:
Excess cost		138,071			171,402			80,414			81,678			(14,396	)		(14,854	)		(52,777	)		(56,330	)		26,615			26,799			(806	)		(1,223	)		8,379			8,379
Total impairment loss		(928,809	)		-			-			-			-			-			-			-			-			-			-			-			-			-

Book value of investment		427,059			1,354,212			198,173			173,277			69,180			60,749			87,174			74,931			130,254			112,224			93,747			58,176			68,988			64,400

Investments in associated companies		427,059			1,354,212			198,173			173,277			69,180			60,749			87,174			74,931			130,254			112,224			93,747			58,176			68,988			64,400

	2022			2021
	$’000			$’000

Investment at cost¹		673,945			635,458
Impairment losses		(95,594	)		(95,594	)
		578,351			539,864

		Principal place
Name of subsidiary	Principal activities	of business	2022		2021
			%		%

I.C. Power Asia Development Ltd¹	Investment holding	Israel		100		100
IC Power Ltd.	Investment holding	Singapore		100		100
Kenon TJ Holdings Pte. Ltd.	Investment holding	Singapore		100		100
Kenon UK Services Ltd	Management services	United Kingdom		100		100
OPC Energy Ltd.²	Generation of electricity	Israel, United States		54.70		58.76
Quantum (2007) LLC	Investment holding	United States		100		100
IC Green Energy Ltd	Investment holding	Israel		100		100
Barkeria Limited	Investment holding	Singapore		100		-

Name of associate	Principal activities	Principal place of business	Ownership interest
			2022		2021
			%		%
ZIM Integrated Shipping Services Ltd.	Shipping services	International		20.68		25.76

	Profit or loss for the year ended December 31,
	2022			2021
	$’000

SGD (5% strengthening)		36			60
NIS (5% strengthening)		(7	)		(11	)
GBP (5% strengthening)		(12	)		(12	)

SGD (5% weakening)		(36	)		(60	)
NIS (5% strengthening)		7			11
GBP (5% weakening)		12			12

	Carrying amount		Contractual cash flows		Up to 1 year		1 – 2 years		2 - 5 years
	$’000		$’000		$’000		$’000		$’000
At December 31, 2022
Financial liabilities
Other payables		6,313		6,313		6,313		-		-
Accruals		5,979		5,979		5,979		-		-
Lease liability including interest*		611		679		170		339		170
		12,903		12,971		12,462		339		170
At December 31, 2021
Financial liabilities
Other payables		6,074		6,074		6,074		-		-
Dividend payable		188,607		188,607		188,607		-		-
Accruals		3,814		3,814		3,814		-		-
Lease liability including interest*		744		848		170		339		339
		199,239		199,343		198,665		339		339

	Kenon Holdings Ltd.
	(Incorporated in the Republic of Singapore)
	(Company Registration Number 201406588W)			IF YOU HOLD YOUR KENON SHARES THROUGH THE TEL AVIV STOCK EXCHANGE (THE “TASE”), PLEASE COMPLETE AND RETURN THE BOTTOM PORTION TO KENON C/O GORNITZKY & CO VIA FAX AT +972-3-560-6555, ATTENTION: ARI FRIED, ADV. OR BY EMAIL TO: KENONPROXY@GORNITZKY.COM, ALONG WITH YOUR OWNERSHIP CERTIFICATION SIGNED BY YOUR TASE CLEARING HOUSE MEMBER. IF YOU HOLD YOUR KENON SHARES IN “STREET NAME” THROUGH A BROKER, BANK, NOMINEE, OR OTHER INSTITUTION, BUT DO NOT HOLD YOUR KENON SHARES THROUGH THE TASE, DO NOT COMPLETE AND RETURN THE BOTTOM PORTION. YOUR BROKER, BANK, NOMINEE OR OTHER INSTITUTION WILL SEND A VOTING INSTRUCTION FORM FOR YOU TO USE TO DIRECT HOW YOUR KENON SHARES SHOULD BE VOTED.

1. Re-Election of Directors:
		For	Against	Abstain
	1(a) - Ducau
	1(b) - Bonnier
	1(c) - Charney
	1(d) - Cohen
	1(e) - Fine
	1(f) - Foo
	1(g) - Kaufman
	1(h) - Sen

Date (mm/dd/yyyy) — Please print date below.		Signature 1 — Please keep signature within the box.		Signature 2 — Please keep signature within the box.
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