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

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

3.  The Governmental Authority for Water and Sewage  STATE OF ISRAEL  The Governmental Authority for Water and Sewage  STATE OF ISRAEL 3 127 (100) Hadera Palmachim Ashdod Ashkelon Sorek (150) 120 45 (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

4. 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

5. 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

6. 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

7. 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 $

8. 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

9. 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

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

11. 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

12. Corporate Hadera Seawater Desalination Facility

13. 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

14. Corporate Hadera Shareholders and Contractual Structure

15. 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

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

17. 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 ppm-TDS @ 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

18. 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

19. 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

20. Corporate 20 Shareholders and Contractual Structure

21. 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 $

22. 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)

23. 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

24. 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

25. Corporate

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

28.  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 ) 120 97 45 36 127 103 150 122 100 81 Water Price US$/m 3 US$/Kgal 0.81 3.07 0.88 3.32 0.73 2.78 0.54 2.04 0.65 2.46

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

30. Corporate fredil@ide-tech.com www.ide-tech.com