ORMAT TECHNOLOGIES, INC. SUSTAINABILITY UPDATE 2016-2017

Platanares, Honduras, 35 MW, 2017 1 ABOUT THIS UPDATE TABLE OF CONTENTS

This update is the sixth time All financial and operational data CORPORATE PROFILE 2 Ormat has shared its progress in this update has been verified on sustainability and this for corporate financial disclosure MESSAGE FROM OUR CEO ISAAC ANGEL 6 update highlights sustainability purposes. Specific sustainability achievements made in 2016 and reporting content has not been 2017. Check our website externally verified. CORPORATE GOVERNANCE 10 www.ormat.com/engagement for regular updates on our Ormat Technologies, Inc. or Ormat SOURCES BY ORMAT 12 sustainability progress. refers to the entire company and its subsidiaries. Dollar amounts are in ENVIRONMENTAL IMPACT OF A RENEWABLE ENERGY LEADER 16 This sustainability update references U.S. currency unless otherwise noted. the Global Reporting Index’s G3 THE ENVIRONMENT AND TECHNOLOGY – ALWAYS INNOVATING 20 guidelines. However Ormat has not We welcome your input. Please direct self-declared a GRI disclosure level it to [email protected]. WORKPLACE 24 herein. Ormat is working to further refine data collection processes, HEALTH AND SAFETY 28 and is engaged in efforts to explore other sustainability disclosure and reporting options. Next year, a full COMMUNITY INVESTMENT AND STAKEHOLDER INVOLVEMENT 30 sustainability report will be delivered according to the GRI's Sustainability Reporting Standards (SRS).

2 At Ormat Technologies, Inc. and its Our suite of sustainable energy Today, we are a geothermal industry subsidiaries (Ormat), sustainability is solutions is built on our proven leader, with global expertise in not another target we are trying to expertise, demonstrating full exploring, developing, designing, reach. It’s our way of life. commitment and delivering building, owning and operating courageous, creative, value-adding plants in the We are continually renewing earth’s renewable energy products and United States, Kenya, Guadalupe, energy future. We do so by delivering services. Ormat has done so for Guatemala, Honduras and environmentally sound renewable more than five decades, starting Indonesia. We also design, build power, primarily sustainable from 1965 when Ormat developed and supply power generation , to customers its first proprietary turbine design equipment for our customers’ in around the world. to generate electricity from low 30 countries around the world. enthalpy energy resources. In early 2017, Ormat expanded its operations Ormat maintains a vertically to provide energy storage and integrated structure that enables energy management solutions, by leveraging Ormat’s renewable energy leveraging its core capabilities and expertise and applying it at every global presence. Energy storage is a phase of the value chain. In so doing, key technology in integrating more we are thoughtful stewards of the renewable power to the grid. environment, and work proactively and cooperatively with our diverse stakeholders. CORPORATE

Platanares, Honduras, PROFILE 35 MW, 2017

Headquartered $693M Active in ORA traded in FY 2017 Over on NYSE Revenues RENO, 2,600 MW since 2004 Nevada, 30 * 53 Years Countries supplied USA Experience

Close to Over Largest 1,300 Power $344M Geothermal 862 MW Employees Plants FY 2017 ZERO power producer 170 ** owned & operated * Worldwide Installed * EBITDA Emissions in the US

* As of August 2018 ** For Reconciliation to US GAAP Financial Information see last page

2 3 RENEWABLE LEADER 19% of the 83% of the WITH A GLOBAL PRESENCE Geothermal Market* Binary Market* Select power plants owned or supplied by Ormat

* Source: Ormat analysis and IRENA “Renewable Energy Statistics 2018”

4 5 TO OUR STAKEHOLDERS, since our beginning. We’ve always During that same time frame, the advocated thoughtful, well-planned electrical generating capacity of ABOUT THIS UPDATE renewable energy developments facilities under our ownership and Our commitment to you, our supported by a firm financial operation expanded to approx. customers, employees, community foundation. In addition, we believe 800 MW in owned power plants members, shareholders, regulatory that a stable workforce, technologies, from approx. 670 MW in YE 2015, and government representatives, products and operations are the representing a growth rate of 19%. and others in the renewable energy bedrock on which companies flourish. Increases in employees from organic sector, is to report openly and • Full commitment to our growth and acquisitions enlarged continuously on our sustainability stakeholders and a sustainable future our global team of employees progress. is a value central to our brand promise. to 1,300 people. Our company has It means that wherever we operate, also grown in geographic range, and Since 2011, we have produced a we are fully committed to delivering added new power plants in Honduras series of sustainability reports that safe, reliable, clean, renewable energy and Indonesia and acquired a plant materially reference the Global products and services that minimize in French island of Guadeloupe, in Reporting Index’s (GRI) guidelines. environmental impacts and promote the south Caribbean. Our next full sustainability report a clean energy future for generations will be published in 2019, in closer to come. It also means every Ormat All of these initiatives demonstrate alignment with the GRI guidelines, employee is dedicated to delivering Ormat’s commitment to continue as well as the United Nations exceptional products, services and enlarging the world’s renewable energy Development Program’s Sustainable value to all of our stakeholders. platform, both in high-demand, highly Development Goals (SDGs), as we are • Courage comes from leveraging developed countries and geographies currently in the process of redefining our collective knowledge, experience, where energy development and MESSAGE our long-term sustainability prudent risk management and infrastructure is less advanced. goals. In the interim, this update unwavering focus to deliver the very FROM OUR CEO captures key progress we’ve made best results for our clients. Ormat was founded since 2015, the date of Ormat’s most • Finally, creativity is our core ISAAC ANGEL recent sustainability report. value reflecting our understanding “ “ and appreciation for the uniqueness For a company and has flourished developing renewable Ormat was founded and has of our stakeholders and how vital as a company that flourished as a company that creativity is to delivering solutions energy projects and develops renewable develops renewable energy in an specific to their needs. solutions, incorporating environmentally responsible manner. innovative storage energy in an Sustainability has been part of our Together, these five values are what strategies is a way environmentally corporate “DNA” from our inception will propel Ormat forward as we to complement and and continues to be the inspiration seek an even larger platform and reinforce its long-term responsible manner. for the growing number of renewable position in the renewable energy strategy sector of tomorrow. Sustainability has energy sectors in which we are participating and the diverse array of ” been part of our products and services we offer. This RECORD REVENUE AND can be seen in our core values, which OPERATIONAL GROWTH OPENING NEW VALUE STREAMS corporate “DNA” we refined through a strategy and Ormat has continued to experience Energy storage is one of the most from our inception rebranding process in 2017. strong revenue and operational promising horizons in the renewable growth in 2016 and 2017. In 2016, energy sector and in 2017, Ormat and continues to be OUR FIVE CORE VALUES total revenues increased to $662.6 strategically reinforced its position by • Constant renewal has kept Ormat million, an increase of 11.4% over successfully acquiring Philadelphia- the inspiration at the forefront of renewable energy 2015. In 2017, Ormat revenues for based Viridity Energy Solutions, Inc. development since our first turbine the full year were $692.8 million, (Viridity). Viridity has unparalleled design back in 1965. It’s a promise another 4.6% increase over 2016’s expertise in demand response, that we fulfill by continuing to record. These advances are built on energy management and storage, seek new challenges, advance new our well-established energy assets and a suite of proprietary software ” technologies, enter new fields and and the long-term Power Purchase and solutions that serve a growing test new business models. Agreements through which we sell number of retail energy providers, • Stability is a core value that has electricity output, primarily to large utilities and large industrial and helped build and sustain our company, utility clients. commercial clients.

6 7 ENERGY STORAGE IS OUR BRAND NEW BRAND hard work, ingenuity and dedication TRANSFORMATIVE Renewing Ormat’s brand is one of of our people and I’m extremely Advances in energy storage the most visible steps forward we’ve proud of their contributions and technology are delivering more taken throughout 2016 and 2017 and commitment. resiliency and reassurance that is the actual manifestation of our energy is always available. For a core values. The brand revitalization We’re always interested in hearing company developing renewable process was and continues to be what you think about our reporting energy projects and solutions, of prime importance to our firm, as and outreach and welcome any incorporating innovative storage we embrace a sustainable future as comments, questions or feedback strategies is a way to complement a global renewable energy leader. you may have. Please email us and reinforce its long-term strategy. Our new branding platform and at: [email protected]@ormat.com or visit our refreshed look and voice tells the website at www.ormat.com. Ormat’s strengthened position in Ormat story with a contemporary energy storage, is designed to give new look to clearly articulate our We look forward to continuing to us a strong advantage as power core values, defining who we are chart new pathways as one of the grids continue to evolve and change. and where we are headed. world’s leading innovators in the Increasing flexibility, balancing renewable energy sector. opportunities and greater cost COURAGE, CREATIVITY AND savings potential are a few of the COMMUNITY attractive incentives transformative Ormat’s core values are also Sincerely, energy storage technologies are reflected in our community delivering. As energy storage interactions. Our company has becomes more mainstream, the long maintained active community tools, facilities, software and ability outreach programs. The multiple to effectively manage grid stability, avenues for information exchange Isaac Angel balance fluctuations betweenand engagement include Chief Executive Officer generation and load, and optimize regular meetings, open houses, Ormat Technologies, Inc. savings will become increasingly comprehensive stakeholder vital and valuable. consultation programs and transparent, and timely sharing of To that end, Ormat has established all facility monitoring data. engineering and project management teams specializing We go beyond the basics and aim in energy storage and is actively to ensure that the communities evaluating other markets where in which we operate are better the company’s deep engineering because of our presence there. expertise can be applied to That’s why we also encourage the generating facilities, in front of the employment of a local workforce, meter, for large electricity grids, and vendors and contractors. It’s also behind the retail electricity meters why we work to address pressing of industrial or commercial facilities. community needs – healthcare, education and social services – as a means to improve opportunities and outcomes for the people. We “ invite you to read about specific We go beyond the community development and basics and aim to support projects Ormat furthers ensure that the around the world, later on in this communities in report. which we operate are better because of our In closing, I’d like to thank you for presence there your interest in our company and our record of creating a sustainable future. Our success today and Sarulla – SIL1, Indonesia, ” tomorrow is a testament to the 110 MW, 2017

8 9 Our Corporate Governance 100% COMPLIANCE CERTIFICATE A FULLY INDEPENDENT NINE- Guidelines, Code of Business All new Ormat employees and senior MEMBER BOARD OF DIRECTORS Conduct and Ethics and Anti- officers of the company must sign a Ormat is a publicly traded company Corruption Policy outline our compliance certificate stating their managed by a fully independent corporate governance practices and intention to uphold these standards, Board of Directors made up of nine the expectations our company has as a condition of employment. members. for good governance and business Employees periodically confirm practices. All of our corporate their compliance with our Code of BOARD COMMITTEE MANDATES governance policies can be found Business Conduct and Ethics and Audit, Compensation and here www.ormat.com/governance Anti Corruption Policy. Nominating, and Corporate Governance are three key Board committees. See our website www.ormat.com/governance for our corporate documents and charters for each committee of the Board.

PROFITS ALLOCATED TO DIVIDENDS Ormat has a dividend policy designed to distribute at least 20% of annual profits (available for distribution, if approved by our Board of Directors) by way of CORPORATE quarterly dividends to registered shareholders.

GOVERNANCE ETHICS SUPPORT FOR EMPLOYEES Ormat has a dedicated telephone line and website, where employees may confidentially report concerns about unethical behaviour. In addition, Ormat has an Anti Corruption Committee composed of senior management representatives from various disciplines, who oversee implementation of such principles. Ormat also has a Chief Compliance Officer who reports directly to the Audit committee of the Board of Directors for certain matters.

PWC-VERIFIED FINANCIAL CONTROL SYSTEMS PriceWaterhouseCoopers LLP, a registered global professional services firm, is tasked to Zunil, Guatemala, independently verify the 23 MW, 1999 effectiveness of Ormat’s internal financial control systems.

10 11 GEOTHERMAL ENERGY HARNESSING THE EARTH’S HEAT

Geothermal energy is heat energy derived from the earth’s molten core and transported to the surface by movements of crustal plates, to intrusion of molten magma and deep circulation of groundwater. Reservoirs of water under pressure are the result of these forces – and it is these underground reservoirs that Ormat harnesses, targets and develops. Drilling wells into geothermal reservoirs enables the steam and high-pressure hot RENEWABLE water to be captured and directed to drive turbines in power plants, ENERGY converting earth-bound energy into SOURCES electrical energy. Geothermal energy offers numerous BY ORMAT benefits for a world seeking alternatives to polluting and high emission fossil fuels. Geothermal energy is a naturally occruing and To date Ormat has developed Ormat’s vertically integrated locally available resource. It provides ORMAT and manufactured over structure enables our company firm, flexible and reliable base-load 2600 MW of geothermal to supply complete renewable electricity. Equally vital, geothermal TECHNOLOGY * and recovered energy power energy solutions from project is a low carbon alternative that plants since our company was start to start-up, from the location consumes fewer resources such established over 50 years ago. identification, permitting, as land capacity and water and All these power plants operate exploration, to equipment design, it has a much lower impact on without fossil fuel consumption manufacturing, construction, the environment, compared with and create virtually no air commissioning and operating. conventional fossil fuel combustion. emissions. We are proud of The ability to leverage our the sustainable focus we’ve experience, knowledge and achieved across our entire suite know-how, gained through years of renewable energy generation of owning and operating our technologies and the advances own geothermal and renewable we have helped pioneer in the energy power plants heightens geothermal industry. the overall rigor and precision of the solutions we offer.

* As of August 2018

12 13 Ormat has also developed unique generate residual heat that has Ormat recognizes the importance In 2017, Ormat secured a strategic expertise in the production of value and can be reused as an of being attuned to the constantly foothold in this sector, with the electricity from recovered energy – energy source. When captured, it evolving needs of today’s modern successful acquisition of Viridity waste heat sources that result as a by- can be used to generate electricity power markets and is focused on Energy Solutions, Inc. This product of many common industrial without burning additional fuel or meeting customer and market needs privately held, Philadelphia-based processes. Cement manufacturing generating emissions. in innovative ways. Early on, we saw company has nearly a decade of and gas pipeline compression how procurement changes and the expertise and leadership in demand RECOVERED ENERGY stations are two examples of ENERGY STORAGE impacts of intermittent renewable response, energy management and ADDED ENERGY VALUE processes and equipment that AND DEMAND resources would impact the market. storage and an array of proprietary RESPONSE SERVICES Ormat expanded from marketing software and solutions for primarily our renewable power services to retail energy providers, utilities and investor-owned utilities (IOUs) to large commercial and industrial creating portfolio Power Purchase (C&I) clients. Agreements (PPAs) to meet the needs of publicly owned utilities Viridity manages curtailable customer (POUs) as well. In addition, Ormat is loads under contracts with leading US developing the next generation of retail energy providers (in front of the Solar power is a part of Ormat’s clean energy solutions, including the meter) and directly (behind the meter) renewable energy history. expansion of our renewables, demand with large C&I clients. This unique One of Ormat’s first units ever response and energy storage to meet and valuable experience initiating, manufactured back in 1966 was the market needs of consumer choice analyzing, designing and operating entirely solar-powered. In the 1970s, aggregators. energy storage projects, with state- Ormat advanced the development of-the-art grid technologies enable of solar pond technology, in which Ormat sees a bright future ahead Viridity’s customers to optimize their SOLAR ENERGY saltwater pools collect and store with the fast-developing energy electricity assets. This contributes storage, demand response, energy to a more stable electricity grid for HARNESSING THE SUN solar thermal energy. management and micro grid services all users, while providing substantial for electricity, especially in the well- opportunities for customers to developed, high-demand regions of monetize savings from smarter the United States. electricity management.

14 15 In addition, these figures represent CONTRIBUTING only what Ormat’s owned power TO A LOWER plants mitigated in 2017. The amount of CO2 mitigated by the CARBON FUTURE more than 1,500 MW in power plants Ormat has supplied to other power producers would result in a 5,190,000 Ormat’s operating activities from substantially higher offset figure. tons of CO2 owned facilities and purchased electricity (Scope 1 and 2 emissions), * This chart demonstrates the impact of which include manufacturing renewable energy, comparing Ormat’s 2017 CO2 emissions from the more than 5.5 million MWh facilities, offices, corporate of electricity we generated to the amounts that automobile fleet and other would have been generated using fossil fuels. ("CO2 Emissions From Fuel Combustion contributors created CO2 emissions Highlights 2017" International Energy Agency of approximately 14,162 tons in 2017. (IEA), 2018)

In 2017, Ormat-owned power plant 3,710,000 facilities generated more than 5.5 tons of CO2 million MWh of electricity. Note that these MWh do not count in our calculation of direct (Scope 1) and indirect from purchased electricity ENVIRONMENTAL (Scope 2) emissions as the electricity is sold to utilities and should be IMPACT OF counted in their emissions reporting. When compared with other base 2,200,000 load electricity generation methods, A RENEWABLE all of which are fossil fuel-based, tons of CO2 the chart shows the renewable ENERGY LEADER electricity offset Ormat recorded:

80,000 tons of CO2

ORMAT PLANTS NATURAL GAS PLANTS OIL PLANTS COAL PLANTS

16 17 That's why Ormat continually RESPONSIBLY monitors facility performance RESPECTING and reports any incidents that may occur. Close monitoring of THE ENVIRONMENT our environmental performance provides the information necessary to improve or modify procedures We have outlined how Ormat’s over time, with the goal of technology has a profound and preventing future incidents. positive impact on the environment. We take our commitment to the MINIMIZING IMPACTS environment even further, by going to TO LOCAL RESOURCES great lengths to minimize and mitigate In the U.S. Ormat minimizes our our impact on the environment, facility footprint by operating adhering to all regulations in each in accordance with National of the different countries in which Environmental Policy Act (40 CRS we operate and by going beyond 1500.1) if the sites are located on compliance where we deem fit. public land. Ormat interacts with various government and regulatory COMPLIANCE WITH agencies in the U.S., most frequently ENVIRONMENTAL LEGISLATION with the federal Bureau of Land The countries in which Ormat operates Management (BLM), as well as with have local environmental protection the U.S. Forest Service (USFS) and laws regulating: the Department of Defense (DOD). • the effect on the environment Other federal agencies we consult outside of the power plant, including with on proposed geothermal restrictions on noise, air emissions projects or during permitting and discharge of pollutants and application and review processes contaminants; may include: U.S. Fish and Wildlife • air quality and noise levels Service (USFWS), U.S. Army Corp of inside our power plants, to protect Engineers (ACOE), Advisory Council employees; on Historic Preservation (ACHP), • Ormat maps and monitors laws U.S. Environmental Protection regulating our sites and maintains a Agency (EPA), Department of multi-year plan for the continuous Energy (DOE), National Park Service improvement of our environmental (NPS), State Historic Preservation performance. Office (SHPO). Ormat is also active in Wildlife Working Groups. In addition to meeting all legal and regulatory requirements in the multiple jurisdictions in which we operate, Ormat meets the exacting standards of various international operating guidelines and has earned IS014001 certification.

ENVIRONMENTAL INCIDENTS Ormat's facilities and the people who operate them strive to work in full compliance with all applicable environmental regulations. Despite our best efforts, sometimes exceedances (emissions beyond what a facility is licensed to emit), Ormat neer the Olkaria III plant Kenya geothermal pipes designed to not disturb the life of the Girrafes spills or other incidents may occur.

18 19 Ormat’s sustainable approach to energy development is based on key technological pillars and an ongoing commitment to advancing the science of renewable energy technologies. It also means finding new ways to operate more sustainably, at every facility, every day.

OPTIMIZING EVERY FACILITY THROUGH RESOURCE EFFICIENCY Ormat employees at the At Ormat, being a responsible service center in Turkey facility operator means continually seeking ways to make the most out of every square meter of land our plants occupy and constantly reduce unnecessary environmental After extensive work in 2016 and continuously recharges geothermal evaluating opportunities to impacts, while maintaining a 2017, Ormat’s plan for the 48 MW systems, by maintaining consistent improve our operational efficiency. streamlined and efficient value chain. Phase Three of the McGinness water flow and pressures. Hills geothermal complex received Reinjection of geothermal fluids, Ongoing research into new Turkey is one of Ormat’s key regulatory approval. which are often referred to as THE ENVIRONMENT equipment helps keep our markets, with Ormat supplying “brines”, as they contain water, facilities running as cleanly and Turkey with over 30 of our power Construction for the expansion, salts and other minerals, help AND TECHNOLOGY – incident-free as possible. In 2017, plants in just over a decade. In the which will boost the overall reduce production-related pressure our engineering and research past two years we’ve established complex’s capacity to 138 MW, is drawdown and promote enhanced ALWAYS INNOVATING and development teams enabled a manufacturing workshop in expected to be completed by year- thermal energy extraction from the a series of improvements. For Turkey, which employs 22 local end 2018. This latest expansion heated rocks within the reservoir. example, several facilities were professional workers, and provides incorporates cutting edge facility Importantly, reinjection also avoids reconfigured to accommodate the capability to build everything features designed to reduce impacts the need for disposal of wastewater larger pumps, which can more required for local customers such as light and sound pollution into nearby surface water bodies and efficiently extract and process in-house. This center better and others intended to prevent minimizes make-up water required to fluids from geothermal reservoirs. accommodates our client’s needs, raven and raptor perching. keep a geothermal reservoir viable. This, in turn, reduces the number of provides fast and more efficient Ormat emphasizes resource wells that are required to properly service to allow the customers RESERVOIR CONSERVATION management and almost all exploit a geothermal reservoir, to enjoy higher incentives per THROUGH REINJECTION of our plants are air-cooled thereby reducing our overall the Turkish incentive regulation. A key sustainability driver for without requiring make-up water. land use, while at the same time Another incentive for Ormat to geothermal power generation is the Our company is known for our enhancing the overall operational opt for this localized approach was conservation and recycling of the pioneering advances, which achieve capacity of the facilities. environmental; it reduces both the water that conveys the heat from 100% recirculation of the exploited amount of shipping and logistics deep underground to geothermal geothermal fluid (condensate The installation of more efficient, issues, as well as time constraints power plants on the earth’s surface. and brine) back into geothermal angled air-cooling equipment was for our customers. Ormat, through its unique designs reservoirs while avoiding the another compelling improvement and operating processes, makes unsustainable use of water to that significantly reduced energy MCGINNESS HILLS PHASE strong efforts to ensure that this enhance depleted resources. consumption at a number of Ormat THREE – AN EVEN SMALLER precious water is not depleted. facilities. IMPACT OF THE PLANT ON ITS REDUCING VISIBLE IMPACT SURROUNDINGS The geothermal resources Ormat Optimizing locations for energy LOCAL SERVICE CENTERS Every new facility Ormat develops develops involve reinjection and generating facilities to lessen their Ormat provides renewable energy requires detailed environmental plans recirculation essentially of all of the visual impact is an important part of solutions to clients worldwide and to minimize impacts to the surrounding geothermal fluids back into their reducing the footprint associated we strive to ensure that we minimize natural lands and wildlife ecosystems, respective reservoirs, in what are with geothermal energy generation. the distance that our equipment with the hope of minimizing the level known as “closed loop” systems. The visible plumes geothermal needs to be transported, again to of disruption to nearby communities. This highly efficient method power plants emit consist of water

20 21 vapor emissions in the form of RESPONSE SERVICES steam. Geothermal power plants Brake-Through Energy Storage do not combust fossil fuels, – SEPTA - Viridity has worked with hence they produce no harmful the Southeastern Pennsylvania emissions such as carbon dioxide, Transit Authority (SEPTA) since Sulphur dioxide or nitrous oxides. 2012 to develop and operate a Even so, a steam plume’s impact can fleet of distributed energy storage be further reduced by thoughtful assets. This “value-stacking” design. Ormat designs and sites innovation applies a power control geothermal facilities to blend into system to the subway trains that the surrounding landscape, taking run on the system, and as they into consideration the actual brake, the kinetic energy flows to physical location of each facility, the three storage systems deployed configuration of units that are used at three separate traction power to build it, landscaping, paint and substations. The battery storage other surface finishes. Studies show assets are charged from voltage that over a typical 30-year lifespan surges caused by regenerative of a power plant, a geothermal braking events from subway cars facility consumes 404 square and discharge to offset electric meters of land per gigawatt hour, supply costs. Viridity manages the while a coal facility consumes 3,632 system and is the market operator square meters per gigawatt hour.2 for this stored “braking” power. This dynamic system is designed ADVANCING TECHNOLOGY to achieve higher performance and THROUGH PROGRESSIVE better subway system electricity use RESEARCH by leveraging flexibility, reducing Ormat participates in different risk and providing a faster return on research programs that are investment for system operators. furthering the understanding Value-Stacking in the Village of geothermal reservoirs and of Minster, Ohio - The Village of advancing methodologies Minster, Ohio has a large industrial to increase efficiencies. customer base, and in 2016 Ormat was part of the Frontier Viridity delivered a value stacking Observatory for Research in and system control with energy Geothermal Energy (FORGE) storage project for this client, that initiative (in partnership with Sandia is deployed behind-the-meter. This National Laboratory and others) involved Viridity in monitoring the initiated by the U.S. Department of municipality’s 15-25 MW average Energy. FORGE yielded new insights load in real-time to guarantee no and techniques in characterizing reverse power flow to electric potential EGS sites as well as tested distribution company feeders. To new techniques and tools in the field do so, Viridity introduced a dynamic of geothermal drilling technologies. dispatch modulator and developed a unique software solution to Currently Ormat is partnering on monitor and manage solar power several proposals to the Dept. of generation through storage. The Energy for federally-funded research project was recognized at the 2016 on drilling technology and machine PowerGen Conference as Project learning. Ormat is actively looking of the Year for its ground-breaking to partner with organizations, innovation. entities and governments on new and emerging technologies in the renewable energy field. “A Guide to Geothermal Energy and the McGinness Hills Complex, Nevada, USA, INNOVATION IN THE FIELD OF Environment”* Geothermal Energy Association, 90 MW, 2012, 2015 ENERGY STORAGE AND DEMAND April 2007

22 23 Ormat is committed to creating and maintaining a workplace where our people can be their very best. That’s why we place a high priority on employee involvement and engagement in the major initiatives that we advance. We believe clarity, transparency and clearly articulated values are fundamental. One such initiative, Ormat’s new brand identity and values, is an excellent example of how Ormat relies on employee input, ideas and enthusiasm to create authentic, relevant programs.

Ormat also works to ensure our workplace is fair, open and free from discrimination or harassment. Progressive workplaces attract and retain the best employees, which we recognize as a key driver of our success as a company. Ormat offers WORKPLACE equitable and competitive pay and benefits, health insurance and retirement savings plans. Lastly, we offer a wide variety of professional development opportunities design to help individuals excel at their current responsibilities, and to advance in their careers.

24 25 NEW BRAND AND OUR EMPLOYEES

For a company operating in 30 countries worldwide, a unified, cohesive brand is critical. Ormat’s successful brand launch in September 2017 started with employee involvement. Their collective ideas and shared experience helped shape and test the new branding platform, as well as the five core values that support them. According to Isaac Angel, Ormat’s CEO, “Our employees know who we are and where we are headed and played a very valuable role in the rebranding process. We greatly appreciate their contributions.” Ormat employee ideas and insights are considered valuable perspectives that enable our company to work more proactively, safely and in tune with the local communities in which we operate.

Ormat’s worldwide brand launch event was staged simultaneously on September 18, 2017 so that every employee, regardless of the time zone or country, could celebrate together. Ormat’s CEO, Isaac Angel, spoke to employees through a video broadcast, explaining the brand values and what they symbolize. He said, “Ormat’s new brand was created by listening to our stakeholders – employees, clients, investors – to ensure it reflects who we are and where we are headed. You, our employees, are our most important brand ambassadors.”

All Ormat employees received a special gift to commemorate the new brand, including a reusable tote bag, note pad and water bottle, all featuring Ormat’s new logo. Ormat also launched a new website the same day. Response to date has been overwhelmingly positive and Ormat looks forward to continuing to embed the new brand identity throughout all marketing and communication initiatives.

26 27 SAFETY IS OUR #1 PRIORITY TRAINING IMPROVES SAFETY The health and safety of our Every Ormat facility has a safety- employees, contractors, the training program. Ormat’s company public and the environment is an wide Safety Strategy Committee overarching priority at Ormat. directs all safety training programs, We manage risks by identifying, working to ensure that Ormat’s assessing and controlling risks in Health & Safety Policy and its every facility, office and workspace underlying components are clearly that we own and/or operate. We communicated to and understood promote safety awareness and by employees and contractors. values so we can achieve our goal of zero casualties. We also work to To further reinforce safety across continuously improve our safety our operating facilities, Ormat has performance and instil a strong appointed in 2016 an Environment, workplace safety culture. Health and Safety Director, with responsibility for oversight of all The countries in which Ormat safety policies, processes, training operates have local laws regulating and work practices company-wide. these issues. These include safety Plant managers at each Ormat and general requirements, including operating site are accountable for ventilation, fire protection, personal implementation of these safety protection, railings, electric initiatives at the local level. protection, and employee training HEALTH on pertinent issues.

AND SAFETY Ormat’s Health & Safety Policy is focused on four components: PERFORMANCE • Everyone, Everyday - Ormat employees are integral to safe operations, each charged with the responsibility to work safely and helping to create and maintain a safe work environment. • Manage Hazards - Ormat strives to systematically identify hazards, and then manage them by elimination, isolation or minimization. • Safety as a Core Value - Safety is a core value at Ormat. We are committed to safeguarding employees and assets, customers, the community and the environment at all times. safely working in the Ormat • Continual Vigilance - Our goal manufqcturing facility of zero incidents requires that all employees maintain constant vigilance to ensure that unsafe acts or work conditions are identified, addressed, regulated and prevented, wherever possible.

safely working in the Ormat manufqcturing facility

28 29 THINKING GLOBALLY, WHO ARE ORMAT’S STAKEHOLDERS? ACTING LOCALLY

Shareholders Customers Utilities who own Ormat stock we sell equipment to and who buy the power we build power plants for generate THE POWER OF A POSITIVE APPROACH Ormat values positive, long-term relationships and strives to create

them wherever we operate. We Lenders Residents and Employees who lend us financial of Ormat worldwide do so by listening carefully to our Business Owners resources who live or operate stakeholders’ concerns and ideas. near our power plants We create policies and protocols to guide stakeholder interaction and make these efforts in a timely, transparent and respectful manner. Local Government Environmental Scientific Researchers PARTICIPATION AND BENEFITS Officials Regulators who supply products At Ormat, we believe in being at municipal, state and who develop policy and services an active participant in the federal levels and enforce regulations communities in which our plants COMMUNITY operate. We want the communities we interact with to benefit from our presence. We also believe that INVESTMENT & communities have the right to STAKEHOLDER INTERACTION TOOLS know how we operate to ensure STAKEHOLDER that our employees, the public and the environment are protected. INVOLVEMENT Website Community relations Civic engagement We recognize that every part of our connection with stakeholders – from pre-development and planning through to facility shutdown – is important. Facility tours Buying locally

We have a diverse array of stakeholders. They include OUR CONFLICT MINERALS POLICY AND SUPPLY CHAIN DUE DILIGENCE our employees, customers, Ormat has adopted a Conflict Minerals Rule, i.e. tin, tantalum, we have a broad commitment to shareholders, utilities, regulatory Minerals Policy, in compliance with tungsten and gold, in the components human rights and our understanding and governing authorities, lenders, the U.S. Securities and Exchange and materials supplied to us and of the impact of our activities is suppliers, scientists and local Commission’s Dodd-Frank Wall Street which are necessary to the production realized in our continued efforts to community members residing near Reform and Consumer Protection or functionality of our products. Our perform effective due diligence on our power plants. Act (known as "the Conflict Minerals policy fully supports the intention of the sourcing practices within our Rule"). Our Conflict Minerals Policy the Conflict Minerals Rule, which is supply chain. Our due diligence defines principles, commitments not to economically disadvantage processes are materially based on the and expectations that extend to areas of conflict in the Democratic internationally-recognized Conflict Ormat's partners, subcontractors Republic of Congo and surrounding Minerals due diligence framework and suppliers, with the intention of countries, but rather to significantly introduced by the Organization identifying, to the best of our ability reduce or eliminate funding of armed for Economic Cooperation and and knowledge, sources of the groups that have a record of human Development (OECD). relevant minerals under the Conflict rights abuses in the region. As such,

30 31 CREATING COMMUNITY BY SHARING TECHNICAL EXPERTISE AND SOLUTIONS

Ormat sees the value that comes from looking at the long-term, bigger picture. That idea is embodied in the after-sales workshops Ormat regularly hosts for customers in different countries. Bringing renewable energy practitioners together to share insights, pose questions, discuss challenges and learn more about new advances is receiving enthusiastic uptake.

In May 2017, Ormat hosted a two-day workshop in, New Zealand, where we are involved in 10 geothermal facilities with five key clients. Leaders from each of the client organizations made presentations, and the day culminated with an open forum for participants to review, explore and elaborate on what was learned.

Similarly, Ormat also held its annual Geothermal Turkish Users Workshop in Izmir, Turkey in 2017, which was attended by over 50 representatives who are operating over 30 Ormat-supplied power plants. The forum covered a diverse array of projects from operational know-how to construction highlights to trends and innovations in Ormat’s renewable energy and power plant technology.

Nir Wolf, Ormat’s Executive Vice President explains, “Hosting these client workshops enables Ormat to listen closely to our clients, gain fresh perspectives and, at the same time, facilitate a community of Ormat clients, where they can gather, share their experiences and learn from one another. We see it as a win-win.”

32 33 IN THE UNITED STATES ORMAT’S A responsible citizenry, improved efforts to support community COMMUNITY social conditions, economic self- development through funding sufficiency and the enrichment scholarships and institutions that CONNECTIONS – of individuals’ lives are just a promote higher education.” AROUND THE WORLD few of the benefits delivered by public education. As such, Ormat The scholarship funding provided is a supporter and promoter of by the Mammoth Lakes Foundation universal access to education. cover student’s full tuition. Ormat’s commitment to Our company’s decision in late community support typically 2017 to commit substantial funds In addition, throughout 2016 begins well before we begin over three years to the Mammoth and 2017, Ormat continued to development in a new region, Lakes Foundation underscores this make our presence felt through as we strive to understand the corporate commitment. other corporate and community relevant regulatory frameworks, partnerships designed to promote and the cultural and socio- Publicly announced early in 2018, health, well-being, dignity and self- economic nuances of local these funds will support student sufficiency. Ormat in the US is a community life. scholarships for Mono County proud supporter of the Food Bank students attending Cerro Coso of Northern Nevada. Community College in the Eastern Sierra region of Southern California. Ormat also contributed to the building of an adaptive children’s Ormat’s Executive Director Paul park in Mammoth Lakes, California. Thomsen, says, “Ormat has been a Later in 2017, Ormat was pleased to part of the Mammoth community be one of the co-hosts supporting for more than 30 years and this UtahCleanEnergy’s Embracing Clean AN “OPEN DOOR” POLICY partnership aligns with our ongoing Energy party and fundraising initiative. Opening doors is an integral facet of Ormat’s approach to community relations, which is why our company hosts hundreds of plant tours annually for visitors, including governmental and environmental regulatory officials, researchers and students who wish to learn more about renewable, and specifically geothermal, energy.

Through 2016 and 2017, Ormat’s geothermal facilities have been visited by a diverse array of groups amounting to hundreds of visitors– from Indonesian Members of Parliament to members of the Sierra Club to fourth graders from St. Albert Catholic School.

Our goal for every tour is to inform and engage our stakeholders, giving them a first-hand look at how geothermal and other renewable energy sources are playing an increasingly vital role in a cleaner energy future and contributing to the stability and affordability of the electricity grid.

34 35 IN GUATEMALA IN HONDURAS Ormat operates two geothermal The Orpacaya Trust achieved Since 2012, Ormat has actively power plants in the Guatemalan great success with a reforestation participated in the development communities of Zunil and event in July 2016, an annual effort of Hondura’s geothermal energy Amatitlan and has been a partner to promote the natural forest capabilities, through involvement in these communities since habitat. AGRECA, a manufacturer in the Geotermica Platanares 1999 and 2007, respectively. of aggregate materials for the geothermal project, in cooperation Trust plays a significant part in cement industry, donated 3,000 with ELCOSA, a privately owned these long-standing community trees for replanting and the Honduran energy company. relationships – both as a quality Orpacaya Trust Fund provided that characterizes interactions 600 backpacks filled with a Ormat’s consultation and between Ormat and our healthy lunch to help fuel the relationship-building with local stakeholders, and through two volunteers, as well as donated Honduran communities is designed actual trusts – the Orpacaya an additional 3,500 trees. Other to enhance quality of life, education Trust and the Tigo Foundations. promotional items, including and healthcare opportunities. All community involvement t-shirts, basketballs and an initiatives are funneled through opening celebration helped Roadway improvements in these trusts, which are designed instill enthusiasm and pride in Yarusin and Maicupa were major to facilitate community input this important greening effort. infrastructure improvements that and decision-making, with local Ormat underwrote during the past community leaders. two years. The effort acknowledged roadway impacts made by heavy machinery during construction of the Geotermica Platanares and Ormat, together with project partners, worked to ensure that the roadways were restored to their pre-construction conditions.

Ormat gifted schools in the area of direct influence close to transmission lines from the Geotermica Platanares geothermal facility with 100 school desks, to improve the educational learning environment. The beautifully carved wooden desks are durable, functional and more comfortable for the students and are intended to improve students’ overall learning experience. A donation of bicycles was also made these schools to enhance recreational opportunities for local school children.

Family-oriented celebrations play a significant role and are an important aspect of local Honduran culture. In 2016 and 2017 Ormat contributed to a series of events honouring Children’s Day, Student’s Day, Mother’s Day and Christmas. Ormat underwrites the costs of basic food baskets, cakes and piñatas for these occasions.

36 37 IN GUADELOUPE In 2016, Ormat purchased an ownership stake in Geothermie Bouillante SA, which operates a geothermal power plant on the French island of Guadeloupe, in the southern Caribbean. In Bouillante we applied our technology and expertise to optimize the facility, and after only six months we increased the plant generating capacity by 50% to its current design capacity of 15 MW. Currently, we plan to expand the plant generating capacity by additional 10 MW by the end of 2020.

IN KENYA Orpower 4, Inc. is the Ormat In 2016 and 2017, Ormat contributed subsidiary operating in Kenya, funds to help strengthen local where the Olkaria III geothermal educational infrastructure, funding complex continues to grow. Olkaria the building of separate sanitary III has a unique location, inside convenience stations for girls and Hellsgate national park, a wildlife boys, and providing new classroom sanctuary. Since 2001, Ormat has desks, tables and chairs. made annual contributions to the Kenya Wildlife Service, which In addition, Ormat has kept helps facilitate the environmental education a priority by continuing and ecosystem management of to provide funds that supplement the park. salaries for additional teachers and extra-curricular learning Ormat has a well-established opportunities, such as field trips program of funding education for students. programs in the Kenyan One of Ormat’s first community investments in this new region was communities near our operation, Ormat continues to respond to designed to help improve awareness of the importance of movement with a special emphasis specific needs that arise in Kenyan among office personnel, in a special event called “Je bouge pour ma on providing scholarship communities, contributing to sante” – translated meaning, “I move for my health”. Staged in July 2017, opportunities for bright young efforts such as feeding programs over 350 participants experienced several group exercise options – girls. Providing higher education that provide porridge and lunch running, walking, cycling – and learned more about the importance of opportunities presents new for students, furnishing water movement in daily life. pathways for female students tanks for community groups and opens doors to careers as an and providing funding for a local alternative to early marriage. orphanage.

38 39 ORMAT'S OLKARIA 3 FACILITY CONTRIBUTION TO KENYE - TODAY 150 MW* LIGHT 300,000 KENYAN HOMES** ORMAT’S SAFE HARBOR STATEMENT

Information provided during this update that EBITDA and adjusted EBITDA may provide adjusted for (i) termination fees, (ii) impairment may contain statements relating to current meaningful supplemental information regarding of long-lived assets, (iii) write-off of unsuccessful expectations, estimates, forecasts and liquidity measurement that both management exploration activities, (iv) any mark-to-market projections about future events that are and investors benefit from referring to this gains or losses from accounting for derivatives, forward-looking statements as defined in the non-GAAP financial measures in assessing (v) merger and acquisition transaction costs, Private Securities Litigation Reform Act of 1995. Ormat Technologies’ liquidity, and when (vi) stock-based compensation, (vii) gain from planning and forecasting future periods. extinguishment of liability, and (viii) gain on These forward-looking statements generally This non-GAAP financial measures may also sale of subsidiary and property, plant and Plant 1 Refurbishment, june 2018 relate to the company’s plans, objectives and facilitate management’s internal comparison equipment. EBITDA and Adjusted EBITDA are 150 MW – 300,000 homes expectations for future operations, and are to the company’s historical liquidity. not a measurement of financial performance or based on management’s current estimates and EBITDA and Adjusted EBITDA are not a liquidity under accounting principles generally projections of future results or trends. Actual future measurement of financial performance or accepted in the United States of America and results may differ materially from those projected liquidity under accounting principles generally should not be considered as an alternative to cash as a result of certain risks and uncertainties. accepted in the United States of America and flow from operating activities or as a measure should not be considered as an alternative to cash of liquidity or an alternative to net earnings as For a discussion of such risks and uncertainties, flow from operating activities or as a measure indicators of our operating performance or Plant 4, February 2016 please see risk factors as described in Ormat of liquidity or an alternative to net earnings as any other measures of performance derived in 139 MW - 280,000 Homes Technologies, Inc.'s Form 10-K/A filed with the indicators of our operating performance or accordance with accounting principles generally SEC on June 19, 2018 and Form 10-Q for the any other measures of performance derived in accepted in the United States of America. period ended June 30, 2018 filed with the SEC accordance with accounting principles generally EBITDA and Adjusted EBITDA are presented on August 8, 2018 and the other documents accepted in the United States of America. because we believe they are frequently used by Ormat files with the SEC from time to time. EBITDA and Adjusted EBITDA are presented securities analysts, investors and other interested because we b elieve they are frequently used by parties in the evaluation of a Company’s ability In addition, during this report, statements securities analysts, investors and other interested to service and/or incur debt. However, other Plant 3, February 2014 may be made that include a financial measure parties in the evaluation of a company’s ability companies in our industry may calculate EBITDA 110 MW - 220,000 Homes defined as non-GAAP financial measures by to service and/or incur debt. However, other and Adjusted EBITDA differently than we do. the Securities and Exchange Commission, companies in our industry may calculate EBITDA such as EBITDA and adjusted EBITDA. These and Adjusted EBITDA differently than we do. The following table reconciles net income to measures may be different from non-GAAP EBITDA and Adjusted EBITDA for the twelve- financial measures used by other companies. RECONCILIATION TO US GAAP FINANCIAL month periods ended December 31, 2017 and 2016. The report of this financial information is not INFORMATION intended to be considered in isolation or as a We calculate EBITDA as net income before Plant 2, April 2013 substitute for the financial information prepared interest, taxes, depreciation and amortization. We 92 MW - 184,000 Homes and presented in accordance with GAAP. calculate Adjusted EBITDA as net income before Management of Ormat Technologies believes interest, taxes, depreciation and amortization,

Year Ended December 31, 2017 2016 (in thousands) Plant 1, 2nd Phase, January 2009 Net Income 147,109 96,294 48 MW - 96,000 Homes Adjusted for:

Interest expense, net (including amortization of deferred financing costs) 53,154 66,418

Income tax provision 21,664 37,059

Adjustment to investment in an unconsolidated company: our porportionate Plant 1 Addition, December 2000 (265) - share in interest expense, tax and depreciation and amortization in Sarulla 13 MW - 26,000 Homes Depreciation and amortization 108,693 99,141

EBITDA $ 330,355 $ 298,912

Mark-to-market on derivative instruments (1500) 319 Plant 1, july 2000 Stock-based compensation 8,760 5,157

8 MW - 16,000 Homes Gain on sale of subsidiary and property, plant and equipment - (686)

Termination fee - -

Impairment of long-lived assets - -

Loss from extinguishment of liability 1,950 5,780

Merger and acquisition transaction costs 2,460 335

Settlement expenses - 11,000

Household accessing electricity in Kenya MW of Olkaria 3 Write-off of unsuccessful exploration activities 1,796 3,017

Adjusted EBITDA $ 343,821 $ 323,834

Copyright © 2018 Ormat Technologies, Inc. All Rights Reserved. This document contains information proprietary to Ormat Technologies, Inc. * As of june 2018 ReproductionCopyright © 2018 Ormat Technologies, Inc. All Rights Reserved. This document contains information proprietary to Ormat Technologies, ** USAID's Power Africa project 2013 annual report, see www.usaid.gov/powerafrica Inc. Reproduction in any form without prior written permission is strictly prohibitedin any form without prior written permission is strictly prohibited.

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