Corporate 2012 MSSC Annual Salinity Summit Desalination Experience in Israel Presenter Name: Fredi Lokiec – EVP Special Projects 27 January 2012

 The Governmental Authority for Water and Sewage  STATE OF ISRAEL  The Governmental Authority for Water and Sewage  STATE OF ISRAEL 2

 The Governmental Authority for Water and Sewage  STATE OF ISRAEL  The Governmental Authority for Water and Sewage  STATE OF ISRAEL (100) Hadera Palmachim Ashdod Ashkelon Sorek (150) (90) Overall until 2013 = ~ 600 MCM/Y Until 2020 = 750 MCM/Y In accordance with the Government decision (1999) large scale seawater desalination facilities are being built: Sea Water Desalination Another 50 MCM facility in planning

Corporate Seawater Desalination Facilities in Israel PlantCapacity MCM p.a. (x 10 3 AFY) Year of Operation Ashkelon120 (97)2005 Palmachim45 (36)2007 Hadera127 (103)2009 Current total production (2011): 292 M m 3 /yr Sorek150 (122)2013 Palmachim Extension45 (36)2013 Ashdod100 (81)2013? Expected total production in 2013: ~ 600 M m 3 /yr

Corporate 5 Ashkelon Seawater Desalination Facility The second largest SWRO operating desalination plant worldwide  Capacity 120 M m 3 /year (97 x 10 3 AFY)  Technology RO (Reverse Osmosis)  Project Type BOT (Build-Operate-Transfer) - 25 years  Location Ashkelon, Israel  Commissioned 2005

Corporate 66 Shareholders and Contractual Structure Concession Agreement EPC Contractor - OTID IDE (50%) + OTV (50%) EPC Contractor - OTID IDE (50%) + OTV (50%) VID IDE (50%) + Veolia (50%) VID IDE (50%) + Veolia (50%) O&M Contractor - ADOM IDE (40.5%) + Veolia (59.5%) O&M Contractor - ADOM IDE (40.5%) + Veolia (59.5%) State of Israel Lenders EPC ContractO&M Contract Financing Agreement/s

Corporate 7 Water Price Indexed to: Electricity price CPI To cover: Cost of Consumables Variable energy and O&M costs Indexed to: Currency basket CPI To cover: Capital Expenditure Fixed EPC, Energy and O&M costs Fixed Component Variable Component Bid Water Price* $ 0.52/m 3 * A/O September 2001 $

Corporate 8 Aerial View South Pre-Treatment South RO House Electrical Buildings & Connections North Pre- Treatment North RO House Post- Treatment TPP Gas Station Product Storage

Corporate 9 Key Technical Parameters  Total desalination capacity – 120 M m 3 /year (97 x 10 3 AFY)  Plant footprint – 350m x 200m  Feed seawater – 40,750 ppm TDS  Product water requirement: Potable water according to the Israeli MoH, Public Health Regulations & the Water Desalination Authority (WDA):  TDS < 300 ppm  Cl < 20 ppm  pH: 7.5 ~ 8.5  LSI: 0 ~ 0.5  B < 0.40 ppm

Corporate 10 Plant Achievements Technology  3 center design concept (HP, RO, ERS)  Triple Line Intake  Boron Removal System

Corporate 11 Plant Achievements  The second largest operating SWRO desalination facility in the world  One of the lowest-ever costs for high quality desalinated seawater  GWI Award – ‘Desalination Plant of the Year’ in 2006 On-Time. Within Budget. Above Specifications

Corporate Hadera Seawater Desalination Facility

Corporate Hadera Seawater Desalination Facility The World’s largest SWRO desalination plant  Capacity: 127M m 3 /year (103 x 10 3 AFY)  Technology: RO (Reverse Osmosis)  Project Type: BOT (Build-Operate-Transfer) - 25 years  Location: Orot Rabin Power Station - Hadera, Israel  Commissioned: 2009

Corporate Hadera Shareholders and Contractual Structure

Corporate Fixed Variable Variable component Indexed to: Electricity price CPI Fixed component Indexed to: Currency basket CPI Hadera Water Price Approx. US$ 0.57 / m 3 (2006) To cover: Cost of Consumables Variable energy and O&M costs To cover: Capital Expenditure Fixed EPC, Energy and O&M costs Structure of Water Tariff

Corporate Hadera Aerial View BWRO (Cascade) Pretreatment SWRO Post-treatment Product water tank

Corporate Hadera Key Technical Parameters  Total desalination capacity – 127 Mm 3 /year (103 x 10 3 AFY)  Plant footprint – 1,200 m x 50 m ~150 m  Feed seawater – 40,200 15~30 o c  Product water requirement: Potable water according to WHO recommendations:  TDS < 230 ppm  Cl < 20 ppm  pH: 7.8 ~ 8.5  LSI: 0 ~ 0.5  B < 0.30 ppm  Electrical consumption – less than 80 MW

Corporate Hadera Plant Characteristics & Achievements  Narrow footprint + overhead high tension electrical lines  Two separate treatment facilities  3 center design concept (HP, RO, ERS)  Cascade Boron treatment  No IPP – variable production rate  International funding: Euromoney Project Finance ‘Deal of the Year Award’ in 2007  The largest operating SWRO desalination facility in the world  One of the lowest-ever water costs for high quality desalinated seawater

Corporate 19 Sorek Seawater Desalination Facility  Capacity 150 Mm 3 /year (122 x 10 3 AFY) (max. 26,000 m 3 /hr): 20% of the domestic water consumption in Israel  Technology Seawater Reverse Osmosis  Project Type 25 years BOT (Build, Operate & Transfer) Location Sorek, Israel  Presently under Construction, to be operational in August 2013 One of the largest SWRO desalination plants worldwide

Corporate 20 Shareholders and Contractual Structure

Corporate 21 Water Price Structure Indexed to: Electricity price CPI To cover: Cost of Consumables Variable Energy and O&M costs Indexed to: Currency basket CPI To cover: Capital Expenditure Fixed Energy and O&M costs Fixed Component Variable Component Bid Water Price* $ 0.54/m 3 * A/O October 2009 $

Corporate 22 Key Technical Parameters  Total desalination capacity – 150 Mm 3 /year (122 x 10 3 AFY)  Plant footprint – 590 m x 170 m  Feed seawater – 40,750 ppm TDS  Product water requirement: Potable water according to the Israeli MoH, Public Health Regulations & the Water Desalination Authority (WDA): TDS: 300 ppm max.Cl: 20 ppm max. B: 0.30 ppm max.pH: 7.8 ~ 8.5 LSI: 0 ~ 0.5Turbidity: 0.5 NTU max. Hardness: 80 – 120 ppm (CaCO3) Alkalinity: 80 ppm min. (CaCO3)

Corporate 23 Main Plant Features Technology  Double Line Intake  Three Pressure Center Design concept (HP, RO, ERS)  Introduction of large diameter (16”) membrane elements  Innovative design incorporating vertical arrangement of membrane PV  Membrane based Boron Removal System  Self-Generating Energy Supply System

Corporate Environmental Awareness  Prevention/minimization of disturbances  No marine/shoreline/land impacts thanks to pipe-jacking method and the location of the feed water pumping station on site  Minimal entrainment/impingement effects at the intake suction heads  Reduced electrical and chemical consumption  Natural gas fired IPP  Use of environmentally harmless chemicals and treatable cleaning solutions  Treatment of media filters and limestone reactor backwashing The envisaged design, execution and operation of the plant anticipate minimal impacts to the environment

Corporate

 The Governmental Authority for Water and Sewage  STATE OF ISRAEL 27 Palmachim SWRO 45 Mm3/year (36 x 10 3 AFY)

 The Governmental Authority for Water and Sewage  STATE OF ISRAEL  The Governmental Authority for Water and Sewage  STATE OF ISRAEL 28 SWRO Prices Ashkelon 2005 Palmahim 2007 Hadera 2009 Sorek 2013 Ashdod 2013 Mm 3 /Year AFY (x 10 3 ) Water Price US$/m 3 US$/Kgal

 The Governmental Authority for Water and Sewage  STATE OF ISRAEL 29 Exceptional Cost Efficiency of Israel’s Desalination Facilities

Corporate