Investor Conference - 19/11/12024 | enlight Renewable Energy

Good morning everyone. Just a few days ago, Enlight published one of the best quarterly reports in our history. This quarter joined the previous one, just one quarter earlier, which was also one of the best we've published. These results allowed us, quarter after quarter, twice in a row, to raise our revenue and EBITDA forecasts for 2024. These quarterly results don't come out of nowhere; they join years of growth. We've been a public company since 2010, and year after year, we see very consistent rapid growth across all parameters. We're not here to talk about financial reports—we'll briefly go over them. We're here because this is an opportunity at this conference to go a bit deeper and try to explain how it is that the company has been growing so much for so many years, and why we are so confident that this growth will continue. To do this, we'll try to go deep into three main things: first, what our story is, what our differentiation is, what competitive advantages we have in this industry, and how we built such a giant machine that generates so much value and will continue to generate value in the coming years. To do this, we'll provide an in-depth overview of the huge portfolio we are developing at the company—a portfolio that spans many years and has many layers. There are the visible layers you see reflected in the financial reports, and there's the giant machine that all of Enlight's employees and managers work in to expand it constantly and also to execute and turn it into sales. We'll talk about it in depth, but as you know, ultimately, behind all of this stand people. I'm proud to say today, and I think I have a lot of confidence in saying, that the company's leading team, the company's managers, is the deepest and most talented team in this field. And we want to give you a glimpse today, through them, into our operations. So today, not just I, but each of the different executives at Enlight will give an overview of their area, why it's going to grow, and how their part of the machine ensures this event continues. To do this, we will briefly go through the results. To move to the financial results, I want to invite the company's CFO, Nir Yehuda. Nir has been with the company for 14 years already; he is a very, very significant part of the company's growth, of the company's ability to do what it has done in all aspects, from the successes of our projects. It's a great privilege for us that Nir is with us and helps us get to where we've gotten. I'll step down a bit, and then everyone will come up after me.

Gilad. Thanks, great. So, what do we see? What do we want to show? We want to talk mainly about the future, but before we talk about the future, we want to look back for a moment and show you that this growth you saw in the last two quarters is not a coincidence. It's growth that anyone who knows the company—and most people here have known the company for many years—can say two things about: it's very, very fast, and it's very, very consistent. Since the company was founded, we've taken a very long period here from 2018. You can take any period you want. How many companies do you know whose revenues grow like this for so many years? In the background to revenue growth, the company's profitability margin increases in the same way, at 38%. Over the years, how many companies do you know where this growth is so visible on a straight and exponential line? This is something that has been happening for many, many years, and basically what we will mainly try to show today is the future. Why? What we've been doing at the company for the last 10 and 15 years is why this happened, why you saw it in the last two quarters, and why you will see it continue to happen. But I also want to show a few more parameters that have developed so beautifully over the years. Notice that the company's equity has already grown to $1.4 billion. Okay, we're talking about around 5.5 billion shekels in equity. In the background, all the time, the financial resilience of the company, the real leverage of the company, which is the debt-to-equity ratio, is going down. In the solo, the company is non-recourse, it's going down by 5% on average between the years, with all the financing activity and so on that is happening, with huge jumps. And even if you go consolidated, meaning you take all the company's debt, including the non-recourse debt in our SPVs, and you look at the company's leverage ratio, it is also going down by 4% year-over-year. Meaning, if you look at a country whose debt-to-GDP ratio is going down by 4% every year, you understand what a healthy thing this is. We are strengthening the company, we are reducing the leverage ratios, and we are also managing to do this while growing it by 40% year-over-year, and doing it in numbers that are already large numbers. It's not just two shekels anymore; we're talking about sales. You saw the numbers in dollars on sales. The guidance for '24 is $360 million, that's 1.4 billion shekels. Nir spoke about $100 million quarterly; I'm still a bit anachronistic and look at shekels. For me, a billion shekels in sales was an amazing milestone. We passed it a long time ago; we're already at 1.4 billion. But we are now exactly crossing the line of a billion shekels in annual EBITDA. So we've reached that point too. In terms of sales, this is really the stage where we will go deep. We want to show you now why this is happening and how it will continue to happen, as mentioned, even in the larger numbers. So let's look for a moment. When you look only at the company's financial results, this is what you see. You see a very, very beautiful mountain. Now, this mountain, today, if you look at our reports, is built from 2.6 gigawatts of normalized installed capacity. And these 2.6 gigawatts are generating $400 million in revenue. Meaning, what we've already connected to the grid is this mountain you see. It's generating $400 million. In 2024, we will connect 300, we will do $360 million because we already connected some during '24, so not everything was connected in January. So there's already $360 million for '24, and $400 million that we reported in the financial reports are connected and already generating $400 million. And this is, of course, not a forecast for '25, because maybe you'll connect a bit more in '25. But this is what we see now. What else do we see? If you look at our financial reports, we looked a bit earlier in terms of sales, but what generates the sales is the installed capacity, right? Because that's what we do. There is capacity that has reached commercial operation, and it generates sales and EBITDA. And what you can see, you already saw, is that it grows every year at an installed capacity level, even more, 66%. And it looks very nice on us, from 4 to 1.4 to 2.6, and it will continue to grow all the time. So this is basically this part that you see in the financial reports. But if you want to understand the company, you need to look back and understand that this mountain is just the tip of the iceberg. Meaning, the sales we generate, and you see them in the financial reports, are just the tip of the iceberg of all the activity. To generate these sales, the entire company is in the part that is below the water, in a giant machine we've built that develops these projects, pushes them all the time up the iceberg, converts them into projects that can be built, and builds them, and into projects that generate sales. And it really generates this value. Meaning, the giant machine is the machine that constantly lifts this iceberg above the water and expands it all the time. The machine itself is constantly growing, and what we will try to do today is simply to give you an in-depth look, to take advantage of the fact that this is not a quarterly report or presentation, to give you an in-depth look at what this machine does, what's in it, and what value it has. So if we look, let's start breaking it down for a second. We have, as mentioned, 2.6 gigawatts of installed capacity that today already generate sales of $400 million. Now, what else is important in these sales? They are contracted sales. This is $400 million that are locked in with agreements for 30 years ahead. Meaning, $400 million are guaranteed. Everything that is added is added on top of them. $400 million, multiply that by 20, 25 years, yes, nominally it's $8 billion, $10 billion, and so on. Now, what are the layers below? First, the closest thing: projects that are already under construction, where we've already done all the risk, we've finished developing them, and they are going to start generating revenue, some right now, some in a few months, depending on the project size. There are projects that take a year, two years. This is in the blend of these 1.9 gigawatts. They will be commissioned, in the case of Enlight, in '25 and '26, a large part in '25 and part in '26. They will add another $200 million in contracted sales. This is all things that have already happened, okay? For us, because ultimately the main event is to develop the projects to the construction stage. Of course, there are people sitting here who work very, very hard to make sure this mountain is on budget and on time, and after that, that the assets also perform as needed, as you saw in the quarter, where the assets performed operationally great. So there are people working on it, but the value is actually what makes it happen. And let's start going another layer deeper. Now, let's go to a layer we call 'near construction.' The 'near construction' layer is projects that will start construction in the next 12 months. When you look at a project we develop, it sometimes takes seven years, sometimes three years, usually more towards five to seven years. 'Near construction' means it has completed almost all its development risks, all the development milestones, and we expect it to start construction in the next 12 months. And of course, we build our forecasts from this. So you see that we are meeting this also in 2025, another 3.7 gigawatts will start construction, which means another $380 million in annual recurring revenues. Now, if you are familiar with our financial reports and our presentations, you know that we call this the 'committed portfolio.' Meaning, within this big mountain we have, this is only the mature component. Why? Because it's built from what is already generating revenue, what is under construction, and what is near construction. That means the things we've finished developing, they are post the main risk, or the main value in our business, which is the development value. So this is the committed portfolio, as we call it. You see how much more is below the water that is going to come in in the near term, how much we've already secured. But let's look another layer up, because we are greedy. So we have another layer in the portfolio, in this machine, called 'advanced development.' This is what will be built in 2026. That means in every report, we look 12 to 24 months ahead. Up to 12 is the 'near construction' layer, and 12 to 24, this layer, in our case, because we are at the end of '24, means construction start in '26. So already in '26, we are entering the machine with another 6.4 gigawatts. Think about it: the tip of the iceberg today is 11.4 billion shekels in sales, clear leader in the Israeli market. An enormous volume will join it in the near term: 1.9, and another 3.7, and another 6.4, which are projects that will only start in '26. Okay? And that means they will connect in '27, '28, and so on. But that's not all, because ultimately I said the machine develops projects from greenfield. It takes between three and seven years, usually. So we have another component in the portfolio that we call the 'pipeline component.' All the projects that will be built from 2027 onwards. Meaning, from two years onwards. Some of them will really be built in two years, some in three, four, five, and so on, usually not more than that. And there, we have another 13.7 gigawatts. Meaning, if you look at Enlight's entire portfolio, all of Enlight, when you look not just at the financial reports, it's a 30-gigawatt portfolio. What you see in the financial reports is something that, in my view, is very amazing and I'm very proud of, that has already reached 1.4 billion shekels in contracted revenue. But there are layers, and this is basically the employees and managers of Enlight, this is what they do, pushing all of this. We call it in English 'increase and convert.' We are constantly expanding this mountain. It's not a given mountain where the only role is to lift it up. We are expanding. We are constantly entering new areas and developing new projects and new countries, and this constantly expands it. But at Enlight, we are very focused on execution. We strongly believe in the track record of execution, and we are reaching execution rates that I think are the highest in our market, and I think also a global benchmark. And our goal is to constantly push the portfolio up the layers until we see it, until we see it coming out of the water, and you see it in the financial reports coming out of the water and understand the company in the top part. We want more of that today. Now, let's talk for a moment about differentiation, okay? Because this machine is also ultimately a result. There is a reason why this thing is so successful. Why, when I measure what it means to be so successful, there is one clear indicator for companies like us. One is how fast we are growing, and we are growing faster than the market, with a compound annual growth rate of 40%. But we also want to grow with higher returns than the market, and that is also happening. Ultimately, our multiple cannot be based only on something small, and it cannot be growth without returns. So the way to evaluate us is whether we are outperforming the market in both growth and returns. And the question is how we do this, because in the reports, I think you see it. So, first of all, our business model is a unique model. We invented this model, we led it in Israel, and more and more players are entering this model today. It's basically how we founded the company: we understood that the value is in the development. Okay? Ultimately, today, when you look at the return of a project in our field, a lot of the return is in the development part of the project, bringing it to construction. That's the hard part. If you buy a project that is already generating revenue, for example, like many institutional investors do, you get the project very safely but at a lower return, which is very suitable for institutional players, and that's why they do it, and it's great. Or financial players. But a lot of the return, the high double-digit returns we bring, are in development. But being only a developer is not enough, because ultimately, when you are a developer and you don't have the ability to build the projects and sell the electricity, you remain small. Meaning, people who are CEOs of private development companies can be rich because when they sell it, they can pull money out, but their companies are small. And basically, when we entered the market, what did we see? That most of the global market is private developers who know how to make money if they are good, personally, with small companies, or large IPPs that buy from the developer at more advanced stages, less advanced stages, and then they are usually companies with lower returns. And we understood that the combination is the right one, and we built this model. And today, for example, on the Israeli stock exchange, companies that entered after us entered with this model. But the question in this model is, first of all, to be in it, and we are proud that others are entering after us, also in the American and European markets. But it's how deep the model is, meaning how deep your control over the value chain is, because that is what brings the return, and in this, we are differentiated. Meaning, if you look at our geographic diversification, most developers in the world are focused on one market. They are either in the American market, or the European market, or other markets. And even in the American market, maybe because it was a large enough market, people didn't need to. So usually companies focus on one market, only in PGM, only in another market, and so on. We are one of the most unique players. We have a very, very balanced and growing activity across three large geographies, some of which are the largest in the world, and one is, of course, Israel, our home market, where we know how to be here with a large market share and grow a lot. But we are also expanding it today to what we call MENA and Africa, which are three very large and growing markets, and we have a very large depth that perhaps other players don't have. I'll just give an example: we are in 10 countries in Europe, not just one country, and in the United States, we are in 22 states. The second thing is technological differentiation. Okay? Technological differentiation complements this matrix. We looked at the market when we entered. 90% of the renewable energy market, which was $300 billion a year and has now grown to however large it is, was in wind and solar. So we understood we couldn't be only solar, and we were the first to enter wind. And today we have a very, very broad activity with huge infrastructure in wind in Europe and Israel. But very quickly, or in recent years, we understood that because renewable energy is huge, storage is also going to be a huge growth engine. Because ultimately, when you produce a lot of renewable energy, you must know how to distribute it at the right times in the grid. So we were the first to enter storage and created dramatic growth rates in storage. Today, we are one of the world's leading players in installed storage capacity connected to the grid, and this will be one of the main growth engines. So there is a matrix that covers over 90% of what happens in renewable energy, which is our real expertise, balanced between wind, solar, and storage. And this matrix is in three very large markets that are also growing, and this depth and differentiation within the IPP model is what gives us these relative advantages. But beyond that, when we understood that being an IPP gives us the size, okay, and the ability to also influence the depth of our development, we understood we also need to be competitive in access to capital, meaning in access to capital and in cost of capital. And the company was built since 2010 on the Israeli stock exchange, when there were no renewable energy players yet. When we started, you didn't know us. We created credit, and I think over the years, many players in the Israeli capital market understood and wanted the power of renewable energy and the ability to invest in renewable energy through us. And we have recently expanded this also to the American market, because the investments are in the billions, and the American market has also joined. So today we have huge financial flexibility, which is built on a huge platform with very large diversification of the leading and broadest players in the Israeli market. We added the American market. We have diversification in the ability to play at the sweet spot of each market: the cost of public debt in Israel, which may be cheaper and more attractive, the ability to produce tax equity in the United States, and so on. Meaning, we manage to create very large flexibility. Now, the company also has no controlling shareholder, so our interest in the financial structure is completely aligned with our shareholders, which is you. There isn't some controlling shareholder who invested billions and can't put in more, and then it's hard for him to dilute, and then they go to maybe more financing or higher leverage, and so on. Meaning, we are growing the company with a very, very aligned trajectory that is completely aligned with our shareholders and gives them the most value. Meaning, when we decide on the leverage ratio, we decide on it to create a situation that, on one hand, generates the most value for you, and on the other hand, generates the most resilience for the company. So this is something where we have no constraints. And the last thing, look at the company over 15 years. The company is very entrepreneurial; it constantly enters new areas, it identifies where the profit spots are in this market, and it enters them first. But the company also has amazing execution capability. The company built itself on execution capability, quarter after quarter, year after year. We are already over 50 quarters, and I think you see that when you look at these five points, each one separately and all together, they build the relative advantages and they build our model in the market over time. But ultimately, as I started, behind all of these things are people. Okay? And I firmly believe that the team we've built at the company, the management team, but also the leadership team, the people who lead the company, is the most talented and deepest team in the country today, with an amazing blend of many people who have been with the company for many years and know this market at the highest global level. Some are Israelis and some are not Israelis, but also new players, very talented managers who help us take this machine, absorb its growth, and also accelerate its growth. And what we've also done is we constantly adapt the company's management infrastructure to our challenges. So one of the things we did in the last year, and maybe this is a good time to present it, is the restructuring we did, which basically created four CEOs under me. You are used to seeing me; under me today in the company are four CEOs of activities, and another two founders in the company, which is the founder, Amit the founder, and Nir, who is almost a founder of the company, and another management team of senior managers who basically support all this growth. And these people are the ones who will present the activities to you. We have a CEO for all activity in the United States, a CEO for activity in Europe, a CEO for activity in Israel, and we have a CEO of the execution division who does all the execution. And ultimately, you need to plan, engineer, build, acquire, manage the revenue-generating assets, and optimize them to get the results you saw. People who do this, both the CEO and his VP, are sitting here at this table, and they are the ones who ensure this happens. And with us here are people, perhaps with the most experience in the market. Sitting here is Marom, who is a senior manager in the company, and a VP who is perhaps one of the people who understands the most in the country in the field of electricity, and other people who make this happen. And of course, above the company is a very stable, very professional, very business-like board of directors, with Yair, the chairman, who guides us, monitors us, and accelerates us, and gives us the ability and the optimal work environment for us to also grow without power struggles, which I see in other companies, without ego battles, but really for you, a professional body that has worked with the company for years and knows how to help it grow. And I've only shown you the first layer, which is below the layer of the CEOs and the founders. There are about 15 VPs today who are basically the ones on whose backs the company stands. These are people who understand the most in the country, in the markets, in Europe, and in the United States, each in their field, and make this happen. And really, we want to give you a glimpse today into some of these markets, but also through some of the CEOs.

Thanks. Good, good morning. First of all, I want to say that I joined the company almost two years ago. It's a huge pride to be part of such a significant company that has such an impact on the activity and also contributes, I think, to the environment. This is something that, in my view, gives meaning, and I think it's also part of our huge success because people believe very much and are very connected to what they do, and then the results come. I will start by presenting a snapshot of the activity in Israel as of today, and after that, I will go a bit and talk about Enlight's activity in Israel. After that, we will talk about what is happening in the Israeli energy market and go back a bit to the future of Enlight in Israel. So this is our snapshot. We have close to 900 megawatts of installed capacity, responsible for $150 million in revenue as of 2024. And we see on the bottom right in the slide the huge jump we've made in recent years, especially in the last year. This is, of course, the result of work. If I take you back to that iceberg, it's the result of very hard work that happened below.

We really want to move as quickly as possible to the Q&A session. We really hope you have questions. So I'll summarize very briefly. We showed you, okay, what did you see here? You saw that first of all, the renewable energy market is a huge and growing market. It's a market that I think very few people have the opportunity, like we had, to enter a market that is simply going to replace the entire electricity generation configuration in the world. And this thing is only at its beginning. It will happen until 2050 and after that it will replace itself.

So we really had a rare opportunity, and we exploited this opportunity until today to become from a small company to a large one. I think our challenge today, as you see, is to become from a large company to a great company. That's what we want to do, and what we tried to show you is why this is happening and what is the insight into the machine. So you saw that there is a very clear and precise business model with six pillars on the value chain in this field, which allows us to both grow and bring returns.

But within this model, to ensure the advantage and differentiation, we created very deep geographic and technological diversification. We understood that in terms of financing, we need to be the best. And today, our cost of capital and accessibility to capital is better than the benchmark. When I say benchmark, it's American companies much larger than us. Our cost of capital is lower than theirs, and therefore we are also more competitive than them.

And ultimately, this entire company is built on very great entrepreneurship. You saw the managers; these are people who understand the most, are the most talented, and also have the most passion in their field. They know where to go within the market, which is very, very important. They know how to understand where the next thing is going to be, and they know how to aim for it. And the company has the courage to enter there. And basically, you saw the numbers. We are doing amazing numbers relative to the Israeli market, which is just 10% of this machine today.

There is another very mature portfolio of 8%, which is 20-something percent of this machine, and there is a huge machine behind it that will continue to push this forward. So ultimately, what you see is what we like to call, and we invite you to continue doing this with us, which is running a marathon but in a sprint. So we really hope you will continue this journey with us. We'd be happy to hear questions.

Yes, so regarding the US market, I think the most important thing is to look at the trend and understand where we are going. In the US market, over the last 20 years, there was a decline or flattening in electricity consumption, in demand for electricity. And in the last two years, we see a sharp increase in demand for electricity. When you look at data centers, which are the source of the increase, we are looking at racks that are not measured today in megabytes as we would think computers are measured, but in megawatts, because it's about electricity, that's the constraint.

I think when data centers started, it was a 15-kilowatt rack like this inside a huge data center. Today, I think it's already 150 kilowatts, and we hear that the big companies are already planning racks of 500 kilowatts because of their chips. This creates enormous demand for electricity. To supply this electricity, you need to build projects. What we also showed is that 90% of the capacity up to 2030 in the United States, as mentioned, are projects that take a long time to finance, built from renewable energy projects. By the way, all over the world, these are the projects that work.

We see that in the end, when they try to create an economy on non-competitive projects, they don't happen. The competitive projects come from this field. Now, it's definitely possible that there will be a policy that says it's less interesting to me, the climate. I assume what this administration is trying to say is that the climate is not interesting to them, the economy is interesting to them. So maybe they will exit the Paris Agreement, maybe they will exit emissions commitments, global warming is not that important to them. But what is important to them is the economy, economic growth, and fighting inflation.

Our way in the end to supply the projects is what will make these projects happen. I think an excellent way to look at this is the first term of Trump, between 2016 and 2020, when renewable energy grew a lot. And by the way, even then the terminology was against it, and Texas was the state that grew the most in renewable energy during this term, more than California. We look at our states, our states, like most of the dollar in the United States, where renewable energy is, are actually Republican states.

So we estimate that certainly there will be policy changes. It's possible they will also try to promote as much electricity as possible without environmental sensitivity, also gas, coal, everything is fine. The demand for electricity will dictate that the projects that know how to connect to the grid at the best prices will be built. And therefore, we, like others in the American market, are optimistic about this.

Regarding storage, what's important to say in the end is that every new market is usually a profitable market when you enter first. You have the profit pool there and you create competitive advantages. We see today that in storage, where it's needed in various different needs in Europe, the need comes more from grid support services, from the ability to stabilize the grid, because it's 27 countries connected together. In Israel and the United States, it comes more from peak shifting. So we are entering the right places.

We are entering today in Poland on grid shaping, Sweden grid shaping, Israel and the United States on peak shifting, on moving the peak that Gilad spoke about. And we know how to make the best returns there. We will present to you our performance in terms of storage and in terms of generation, combined into one number so that you get more or less the order of magnitude. And of course, our goal is to bring the highest returns, which I think you see we are bringing.

Yes, so first of all, let's talk about base costs. We are in perhaps the best environment we've been in since we founded the company. Today, the cost of a panel is 11 cents per watt. It's unbelievable. One of the things panel manufacturers need to do today to lower the cost of the panel is to find a way to lower the cost of the frame, because the silicon inside has already reached such low costs. But more than that, batteries. When we look today, we are veterans in the industry, but what is happening today in the storage field with batteries is what happened with panels in the early years: there is a dramatic drop in battery costs.

It was just two years ago $300 per kilowatt-hour. Today we are already well below $150, we are already in the area of $110-$130, and I think it will very quickly reach $60. So first of all, the base asset is in excellent condition. In the end, what determines in this world is the cost of equipment, the price of electricity, and the cost of money, right? That's the interest rate. In the end, that's the equation. So equipment costs are dropping dramatically, electricity prices are high because there is demand for electricity, and the cost of money, the cost of money is also gradually dropping in most of the world.

So first of all, in this context, our position is good. Now, the Americans, and in this matter, in a very consistent way between Democrats and Republicans, maybe the only thing they don't fight about is the issue of the trade war with China. They are interested in fighting the dumping prices coming from China through tariffs, and basically encouraging production in the United States. I'm not sure, for example, that this will hurt. It's possible there were various things in the Trump administration. I'm not sure that the issue of encouraging American production raises the prices of setting up renewable energy in the United States compared to setting up renewable energy in Europe and Israel.

The way to do this is tax incentives. So there are also tax incentives that encourage renewable energy in general, and within that, encourage American production, what are called 'adders'. So we believe this will continue. Now, if in certain areas there is an increase or decrease in one of the two sides of this scale, meaning either more tariffs or, say, fewer incentives, there is another component in the equation, which is the price of electricity.

We saw in the last two years, and reported to you, that when the Democratic government dramatically increased tariffs on Chinese production and then on four additional countries that the Chinese moved to produce in, and all this, the utility companies had to take the electricity from us to meet demand. They agreed, without any legal discussion or anything, simply agreed to open our PPA agreements before construction, in the order of 25%. By the way, the price of the PPA, even 25% higher to us, was still lower than the market price that is rising due to demand. So they were still in a win-win and they got the projects.

So I don't know what will happen, what Trump will do, etc. I know the market knows how to balance this. I'm not sure he will want to create inflation, but if there are more tariffs and less tax credits, or more tax credits or not, in the end there is something that balances this against the demand for electricity, which is the price of electricity.

Yes, so look, first of course we need a lot of equity. Today in the United States, we reach a net equity ticket of about 15%. When the setup of each gigawatt is about a billion dollars, okay? Meaning for each gigawatt we need to invest about $150 million net from the company. And the company has created very great financial flexibility. Meaning what it knows how to do, it supports this with many sources. First of all, we have a growing cash flow. In the quarter, we created cash flow from projects of $66 million. In nine months, if I'm not mistaken, already $160 million. This is already money that creates very, very good internal capability.

Second, we said we are an 'IPCO' company. Meaning our size will always come from the fact that we hold most of our portfolio, and it will grow the company and create balance sheet and create for us the capabilities to develop more assets and to buy and do M&A. But still, to create fuel for growth, there is no problem to occasionally realize assets, whether it's minority stakes, whether it's... and we are in the market, we reported to the market that we will do this. We started doing it already last year in a small way. This year we will do it even a little more, and I assume you will be happy to see at what equity multiple we are selling the assets.

Why? First, I think our assets are very high quality. And second, I think many players want to be partners of Enlight in assets, and we remain either in minority or sometimes in majority in these assets. And therefore we will receive a very, very large equity multiple. And this will also be a way for you to see the value of the portfolio I talked about, because you will be able to see this component, what its equity multiple is. But we won't do this on the entire portfolio. We will do this to create fuel for growth. And of course, you saw we also know how to raise debt when needed. We just did an expansion, we expanded debt at a spread that I think is excellent, around 1.6% above Israeli government bonds.

Again, I don't think there are European or American players who know how to raise debt at these prices. So we have another tool. And of course, we also have the equity tool. The equity tool, again, it can be private, as I said before, it can be public when we feel you have earned it, meaning when we are at multiples. These are things we have done. So we have very great flexibility in where to bring the money from. We have project financing ratios that don't require a lot of equity, but of course require relatively a lot. And I think you saw that the company knows how to do all this in large numbers and to go down in leverage.

Yes, North Africa will become the silicon of solar energy? It's very possible. North Africa is an amazing wind. Why is it an amazing wind? If we look at Morocco, which is a country we already operate in, you saw the development. You didn't even see the base development, that's another layer in the portfolio that you didn't even see. We are doing today base development in Morocco, between the company and with a partner led by Yossi Abou.

And basically, why are we doing this there? Okay, because in Morocco there is amazing solar irradiance, but there is also amazing wind. Not everyone knows about the Atlantic Ocean, all the western border of Morocco has one of the best wind resources in the world. The combination of both knows how to produce electricity economically in a way that cannot be competed with. This electricity can be used for various things. Morocco itself is still a coal country, but beyond that, Morocco is one of the closest countries to Europe. To get to Europe, you can do it in two ways with electricity. One is cables, you build undersea cables, but that takes time. You can also produce electricity on ships. How do you do that? With green hydrogen or with ammonia.

Today ammonia is fuel for agriculture, and it's also going to be fuel for maritime transport. Nir, my partner, understands this better than me. So there will be ways. This will take another decade forward. You got a picture three years ahead. You are trying to understand where Enlight is going a decade ahead. This energy, which will cost a few cents because it is so economic, will find its way to Europe and will lower the cost of electricity in Europe. Exactly, by the way, like the move we are doing in the Nordics. Enlight is selling ice to Eskimos. Why? Because in Sweden we have very large projects, and also in Finland, in minority. Why? Because there is very competitive electricity there today from wind.

And the production of electricity in these countries is around 70%, and today there is no way to export it to Europe. It's closed more or less in the Nordics with some interconnections. And we estimate and see that they will build huge interconnections to equalize concentrations, as we call it, just like we see with LNG from the United States to Europe after the route from Russia was closed. So now they export gas and it equalizes the prices a bit. The same thing will happen with electricity. So what we are doing today in Sweden is good, but the prices we will sell in five and ten years will be higher for a very simple reason: electricity there is cheap and it's not that hard to export it to Europe. That's why we are there.

Yes, so of course every company has its own policy. I think what we are saying right now is that the company is, to a large extent, still, despite already being in large numbers, a growth company and not a dividend company. What does a growth company mean? It means that basically, when you give me a shekel today, I know how to make three shekels from it. So I think most of our investors, when we were and talked with them, we told them: listen, if you still know how to make me three shekels from every shekel, don't return it to me at 1.05 shekels, make it three shekels. The company itself is a long-term dividend company because we are an 'IPCO' company. The large scales will be dividend scales, and in the meantime, we serve you the best way from every shekel we make three.

First of all, we prepare through our business model. Meaning, think about it, we are the company that in the end is the best place to be in within such uncertainty, because there are no companies with such diversification. The American companies are all in the United States, and usually there are players that are sometimes only solar, etc. First of all, our diversification is huge. You saw a very large portfolio in Europe and in Israel, and this is also first of all something that helps us a lot. Part of what you see, that the results are rising all the time, we look at the reports and really, for me it's amazing to what state we've reached, that sometimes prices drop in Spain, but then solar irradiance rises in Israel. Sometimes something happens in Sweden, but it rises in the United States.

Our diversification, the differentiation, the protection, does two things. One, it smooths, but because everything in the end rises simultaneously, it usually also creates the exponent, but it also smooths a lot. That's a very good thing. Now, within the United States, what are we doing? We are building ourselves like everyone else. So in the United States, there is a way to do safe harbors already today. To be eligible for tax credits, you need to do safe harboring, you need to already start investing in the project to be eligible for four years of benefits from the tax credit. So we are doing, like everyone else, safe harboring. Maybe we'll add, there are also various other ways to protect yourself, to ensure the equipment arrives on American soil, etc. So of course, like everyone else, we will do this.

What I want to say in the end is that the economy of the United States, according to the current administration, is the most important thing to them. For it to grow, projects are needed. All the projects are renewable energy projects. Whoever has renewable projects, certainly in areas like Texas, and I'm not talking about the ERCOT base, but I'm simply talking about the fact that it's 2,300 hours of solar irradiance. You saw this huge spot of irradiance. So this allows us, in the same way, to sell electricity at a much lower price than, say, in PJM. In PJM, the price is maybe $70, and with us it's around $50. But in PJM, in some states it's like Europe, the eastern United States, it's 1,400-1,500 hours. With us it's 2,300 hours. Yes, the equation is on the same setup cost, yes, the same solar panel. So in the end, this equation allows us to be in a place that I think is a bit more protected.

And therefore I think the company is well diversified, well built, and I assume we are all a bit worried and everything. I think it's also a big advantage in the approach of this administration that no one knows what to expect, so everyone comes relatively prepared for concessions. But in the end, let's look, in another four years, you will see that the American economy must grow and it will grow, and the projects that will support this will be, among other things, renewable energy projects. And we always like competition, and we have no problem if they also promote other projects, fossil fuels, we have no problem with that.

Yes, yes, for a very clear reason. In the end, we build the fields we want to advance in. We want the equation of scale and returns. When we entered the offshore market, you definitely saw the numbers. Offshore grew, yes, it grew in Europe and there is demand for offshore wind in Europe. On the other hand, when offshore wind grew in Europe on a large scale, the cost of money was zero. The utilities did the right thing, they understood that if they don't build renewables, they will go bankrupt, they won't be those gorillas anymore. So in the end, they had to enter a certain field, which is a field of scale, of large engineering challenges, and they entered the field of offshore wind at very, very low costs.

They bought concessions in Europe, and then when tenders started in the United States, they bought concessions for another 10 years in huge volumes based on forecasts of zero cost of money. And this created a situation that our entry into offshore, if we wanted to do it, it would bring projects but not in the returns we want. And therefore, at this stage, we put this on hold. I think there will be some reset in this matter because many concessions will not be built at these prices. In the end, offshore wind is needed, and there is also technology developing for floating turbines, or more correctly anchored to the seabed but with cables, not with foundations. And this will open another market. So I assume that over time, Enlight will be there, but we know how to enter places where there are returns. I think we did very, very well that we didn't enter, although we were worried and concerned about the returns of the projects. We knew how to identify this as well, and therefore we put this on hold for the next stage.

Good, so thank you so, so, so much for coming, for listening to us. Thank you so much to the Enlight management team sitting here, to the Enlight board sitting here. I think you saw a small glimpse into the depth of Enlight, and you will see more and more, because this is the team that will take Enlight forward.