ORMAT TECHNOLOGIES, INC. Putting the Earth First: SUSTAINABILITY REPORT 2018

Our Economic, Environmental and Social Performance Highlights

Olkaria III geothermal complex, Kenya, 150 MW

1 CHAPTER I. A MESSAGE TO OUR STAKEHOLDERS

Don A. Campbell geothermal complex, NV, U.S., 39 MW

2 3 This report demonstrates performance over time. Risk Management: sustainability progress. our Company’s sustainability Ormat places high value in compliance proposition, which is based on our Furthermore, this year’s report with all relevant regulations. Applying In summary, Ormat is pleased to dispersed portfolio of geothermal, represents our Company’s best practices in risk management submit this sustainability report solar, recovered energy and energy response to requests from our throughout our business is key to to you, our stakeholders. Our storage facilities that provide stakeholders to broaden our helping us achieve this goal. commitment to encouraging clean and . Our disclosure on sustainability and the use of renewable power and renewable assets, which have little environmental initiatives and • Geothermal Resource (Brine and to reducing GHG emissions are emissions, mitigated 5.5 million adopt a global perspective on Steam) Management: embedded in Ormat’s corporate tons of GHG emissions in 2018, with sharing that information. Ormat employs sound, environmentally DNA. We are firmly committed to electricity generation totalling 5.9 prudent strategies to manage the these goals as a Company and as million Megawatt hours (MWh). As such, a materiality assessment geothermal resource, made up of brine concerned members of the global was among the first activities carried and steam. We use predominantly closed society. We believe this report, and out as part of our GRI-reporting loop systems to minimize brine by- the effort our Company makes in ADOPTING THE GRI REPORTING pathway in 2018, which was carried products (as almost all of the geothermal collecting and analyzing the data STANDARDS out through a survey distributed fluid is re-injected into the geothermal it contains will help accelerate to key stakeholders. This exercise formations) and we support research and learning, engagement and support GENERATING FOR GENERATIONS revenues of US$719 million, due to Ormat believes that consistent enabled Ormat to “hear” what development to further reduce impacts. meaningful change. our renewable energy abilities and and rigorous performance stakeholders identify as the most Dear Stakeholders, activities. These results speaks to the measurement yields meaningful important environmental, social and • Local Employment and growing demand for clean, renewable and ongoing improvement. economic issues that we impact. Development: Thank you for your interest. Ormat puts the earth and the energy power. It reflects the hard work our Ormat applies these principles in These insights enabled us to align Ormat believes local people and needs of its people first. It’s who we people do in providing renewable the management of its business our sustainability report content communities should benefit from Sincerely, are; it’s what we do. energy safely, economically and operations and we seek to apply more closely with these expressed having Ormat as a neighbor. That’s in an environmentally responsible them as the basis for further viewpoints, ensuring that each why we have a policy of hiring locally, Ormat’s employees, their passion manner. Our Company recognizes elevating our sustainability performance area is objectively and as well as providing training programs and relentless pursuit of excellence the importance of the fight against reporting practices. This thoroughly evaluated, and that the to increase local employment and generates valuable energy from climate change and the imperative sustainability report for 2018 is data presented is material, clear, economic opportunities. renewable sources, fueling economic, of lowering greenhouse gas (GHG) Ormat’s first report developed consistent and readily comparable. social and environmental progress emissions, as well as how critical in alignment with the Global Ormat’s materiality assessment • Occupational Health and Safety, Isaac Angel and a stronger, more sustainable it is to address poverty and social Reporting Initiative’s (GRI) process identified the following key Operations and Emergency Planning: Chief Executive Officer future for all. inequality by encouraging local Sustainability Report Standards content priorities: Wherever Ormat’s people work, economic growth and employment (SRS). Adopting this well- we recognize our responsibility to We are proud of the impact that our opportunities. This is evident in the established global reporting • Climate Mitigation: provide the appropriate health and activities generate for people and the sustainable value Ormat generates standard for sustainability Ormat believes that fighting climate safety training, personal protective planet. This sustainability report aims by employing a global workforce that disclosure on environmental, social change is of the utmost importance equipment and safety awareness to reflect the sustainable aspects of contributes to the social fabric of the and governance (ESG) issues is and that CO2 emissions must be programming to achieve a our activities in 2018, what we do and communities in which we operate. an important step forward for addressed and significantly lowered, zero harm and an incident-free how we do it. us. Up until this report, and since largely by making renewable workplace. Safety is a top priority Another aspect of this strong 2010, we regularly shared with our energy options more accessible for Ormat and its stakeholders. performance is rooted in stakeholders bi-annual updates on and by developing new strategies Ormat continually works to ensure AT THE FOREFRONT OF Ormat’s business structure. As our general sustainability progress and technologies to increase the all our facilities are operated in DEVELOPING AND DELIVERING a vertically integrated Company and environmental and social adoption of lower or even emissions- a safe and responsible manner RENEWABLE ENERGY with significant involvement in initiatives. Through this, our first free renewable energy solutions. in order to protect employees, every aspect of the energy value sustainability report compiled contractors, local community For more than five decades, Ormat chain, we are able to envision the according to the GRI Standards’ • Ethical Business Conduct and members and others. has demonstrated unique vision challenges and opportunities Core reporting option, and paired Transparent Corporate Governance: and leadership when it comes in the renewable energy sector with our commitment to continue Ormat employees, management We invite you to read in this to developing renewable energy from the vantage point of an reporting annually according and Board members must comply report more about the specific solutions. We understand what it inventor, explorer, developer, to internationally-recognized and adhere with all regulations achievements Ormat has made takes to build resilient, world-class operator and manufacturer. reporting standards, we seek for corporate financial disclosure, in these areas throughout in 2018 renewable energy capacity and Leveraging these perspectives to ensure that our data is more sound business practices, ethics and across our operational portfolio. capabilities that endure. gives our Company and our comprehensive, and transparent. corporate governance, everywhere We also invite you to regularly stakeholders superior insight We believe this will enable us to we operate. visit our corporate website (www. In 2018, Ormat achieved record and agility. better analyze and improve our • Legal Regulatory Compliance and ormat.com) for updates on our

4 5 CHAPTER II. ABOUT ORMAT

Value for the Environment, Society and Our Key Stakeholders

Steamboat geothermal complex, NV, U.S., 65 MW

6 7 ORMAT AT A GLANCE Present in 100% US$3B US$719M US$368M 33 Local Total Assets FY 2018 FY 2018 Countries Electricity, Product Revenues Adjusted EBITDA* Empolyment & Other

Headquartered in RENO, Nevada ~1,350 Employees U.S. Worldwide Largest producer in the U.S. 54 Years of 910 MW Over Experience in 25 Plants owned & operated** 180 Power Plants 18 Years ORA traded on NYSE Over Installed ** Weighted 2,900 MW Average PPA since 2004 supplied **

* For Reconciliation to U.S. GAAP Financial Information see page 95 ** As of year end 2018 8 9 ORMAT PRESENCE

U.S.A 622 TURKEY

GUATEMALA GUADELOUPE 43 HONDURAS 15 38 KENYA 150

INDONESIA* 42

*Ormat owns 12.75% interest in the 330 MW Sarulla Complex

Ormat power plants Capacity (MW) Ormat manufactoring facilities Countries in which Ormat supplied services and equipment over the years

10 11 ORMAT: WHAT WE DO Net Revenues1 by geographical location and business Ormat Technologies, Inc. (“Ormat” segments: Exploration “We”, “Our”, “Us”, or “the Company”) is a leading renewable energy Company with over five decades Electricity of experience. Ormat is vertically integrated – engaged in the execution of all stages of development 465 510 and energy generation – at our geothermal and recovered energy Development Geothermal Power Plants Recovered Energy Power Plants Storage & Energy Management 204 power plants. These stages include: 170 exploration, development, drilling, Ormat is a global leader in the Our Recovered Energy power plants Energy storage systems use a design, manufacturing, construction, geothermal market. Geothermal power produce electricity from recovered variety of technologies, such as large and operation. Our Ormat Energy is a clean, practically emission-free energy or “waste heat”. Recovered scale batteries, to utilize surplus, Converter – a power generation unit 295 306 renewable energy resource generated energy power plants utilize residual or available electricity, which, in that converts heat into electricity from reservoirs of water that are heat that is generated as a by- turn, allows the optimization of – is the basis for the solutions and heated by magma, deep beneath the product from a variety of industrial the electricity grid operations, run services that we offer our diverse 2017 2018 Drilling earth’s surface thus producing steam processes (cement manufacturing, generators closer to full capacity array of customers. and brine, which are used to turn our gas compression turbines, etc.), for longer periods, and operate United States International geothermal power plants’ turbines and which would otherwise be the grid more efficiently and produce electricity. wasted to generate electricity effectively. Common applications without burning additional fuel or for energy storage systems involve ABOUT OUR BUSINESS power plants generating emissions. management of local capacity, harness a natural and locally available frequency regulation, ramping, Our business is divided into three Product energy source and enables providing reactive power, black start and main segments: Design baseload electricity 24/7. Most movement of energy from times 224 202 importantly, usually geothermal energy of excess supply to times of high 1. Electricity Segment – the power offers an environmentally friendly demand and more2. generation business, where we sell energy alternative that produces renewable energy generated to 221 187 practically no GHG emissions. different entities. 15 2 2. Product Segment – sale of our 2017 2018 geothermal and recovered energy- Manufacturing based power plants that we design and manufacture. United States International

3. Other Segment - provision of energy storage, demand response and energy management-related services. Other Segment Construction

2 7

2017 2018

Operation United States 1 Presented in USD$ thousands. Presented in Ormat’s Form 10-K as “Geographic Breakdown of Results of Operations”. 2 For more information on energy storage and related terminology, refer to the following link: https://www.ormat.com/en/renewables/storage/main/

12 13 OUR HISTORY AND KEY operates 910 MW of geothermal and include contractors, geothermal Beneficial Ownership EXPERIENCE recovered energy-based power plants, plant developers, owners and predominantly using equipment that operators. The customers for our No shareholder holds a controlling interest in the equity structure of the Company. As such, the below table presents Ormat was established in 19653 for we design and manufacture. With the recovered energy solutions include our ten largest shareholders as of December 31st, 2018: the principal purpose of developing acquisition of the Viridity4 business in companies engaged energy equipment for the production of 2017, we manage curtailable customer intensive industrial processes such energy from clean, renewable and loads of over 875 MW across nearly as cement and glass production as inherently sustainable sources. 3,000 sites across the United States well as gas processing. Significant Shareholders Percentage of Institutional Ownership We have a total of fifty-four years and own and operate 41MW of battery of experience in the renewable storage power plants. The target customers for our energy sector pertaining to both energy storage business are grid ORIX Asset Management Corp. 21.65% technological development and the Our headquarters are located operators, retail energy providers provision of products and services. in Reno, Nevada and our major and large commercial and Vanguard Group Inc. 7.73% manufacturing facility is located industrial customers. Our first product, developed in 1966 in Yavne, Israel. As of the date of Clal Financial Management Ltd. 6.32% and installed in the African country this report, Ormat operates power of Mali, was a solar pump, directly plants that are located in the OWNERSHIP STRUCTURE Insurance & Financial 6.05% connected to a turbine that is rotated U.S., Honduras, Indonesia, Kenya, by vapor generated through solar Guatemala and Guadeloupe (French Ormat Technologies, Inc. was formed BlackRock Inc. 5.61% panel heat. This pump was used to Caribbean). as a Delaware corporation in 1994 by pump water from a well to provide our former parent Company Ormat members of the local community Industries5. In February 2015, Ormat Phoenix Holdings Ltd. 4.93% with access to water resources. Later, OUR CUSTOMERS Technologies, Inc. completed the we engaged in the manufacturing, acquisition of Ormat Industries in Menora Mivtachim Pensions & Gemel Ltd. 4.83% ownership and operation of solar Ormat’s main customers fall under two an all-stock merger, eliminating its ponds for energy generation in major categories: those who buy power majority ownership and control of Impax Asset Management Group plc 3.46% Israel and the United States (U.S.). plants and those who buy electricity. Ormat Technologies, Inc. Eventually, we ceased production of Harel Insurance 3.32% both products, but the technology Ormat provides electricity from In 2017, ORIX (a Japan-based and operational models are the basis renewable energy solutions to financial services group) acquired for current day Ormat. customers worldwide. Most of the approximately 11 million shares, Dimensional Fund Advisors LP 3.03% Company’s revenues arise from fully- representing a 22 percent ownership In 1983, Ormat began to set up its first contracted energy and/or capacity stake (purchased from FIMI ENRG geothermal power plants in the U.S. payments under long-term power limited partnership, FIMI ENRG and state of Nevada. We began by selling purchase agreements (PPAs). In the L.P. Bronicki Investments Ltd.). our power plants to geothermal U.S., the purchasers of power from our developers, which later evolved into power plants are typically investor- Ormat is a publicly traded Company. the development, ownership and owned electric utility companies The Company’s common stock is operation of our own power plants. or electric cooperatives including dually listed on the New York Stock Today, we continue to grow our publicly-owned utilities. Outside of the Exchange (NYSE) under the ticker business by selling power plants to U.S., our purchasers are either state- “ORA” since 2004 and the Tel Aviv developers worldwide and through owned utilities or privately-owned Stock Exchange (TASE) since 20156. the development and acquisition of entities and we typically operate our additional geothermal power plants facilities pursuant to rights granted to The Company’s Board of Directors in the U.S. and internationally, with us by a governmental agencies under is fully independent (according to the goal of positioning Ormat as concession agreements. the NYSE definitions) and is made the largest producer of geothermal up of nine members. power in the U.S. and a leader in the In the sale of power plants, our international market. customer base and contract scope 3 Ormat Technologies Inc. was initially established as a subsidiary of Ormat Industries in 1994. On February 12, 2015, Ormat Technologies Inc. completed the acquisition of Ormat Industries differ. The scope varies from the in an all-stock merger, eliminating its majority ownership and control of Ormat Technologies. 4 In March 2017, we entered the energy storage, demand response and energy management markets following the acquisition of substantially all of the business and assets of Viridity Energy, Inc., a Since our establishment, Ormat has built supply of equipment to full, turn- Philadelphia-based Company. The acquired business and assets comprise our Other segment. We are using our Viridity business to accelerate long-term growth, expand our market presence in a growing market and further develop our energy storage, demand response and energy management services, including the VPower™ software platform. We plan to continue providing services and products to over 180 geothermal and recovered key solutions. Our customers for existing Viridity customers, while expanding our service offerings to include development and EPC into new regions and targeting a broader potential customer base. 5 Ormat Industries was originally established in 1965 as Ormat Turbines Ltd. The entity was later renamed Ormat Industries. energy power plants in a number of the geothermal power units that 6 Ormat Industries was listed on the in 1991, but in February 2015, it was delisted and Ormat Technologies common stock began trading on the TASE under countries. As of 2018, Ormat owns and we design, manufacture and sell the ticker symbol “ORA”.

14 15 AN ORGANIZATION goal that Ormat strives to achieve in propel Ormat forward as we seek an the spirit of environmental and social even larger platform and position in CREATIVITY SHAPED BY VALUES responsibility. Sustainability has been the global renewable energy sector part of our corporate DNA since our of tomorrow. inception and continues to be the inspiration for the growing number These, the core values that Ormat At Ormat, sustainability is not just of renewable energy sectors that is built on, are reflected in the way another target we aim to achieve; we participate in and for the diverse we work and operate our Company, it is at the core of our business and array of products and services that every day, in every location. We our way of life. Ormat was founded we offer. This way of life is also believe that honesty, openness and and has flourished as a Company demonstrated in our core values fairness must be demonstrated by whose purpose is to continually as detailed below. Together, these every Ormat employee, manager or renew the earth’s energy future, a values sustain our organization and director, at all times.

Creativity is a core value that reflects our appreciation for the uniqueness of our stakeholders and our understanding that OUR FIVE CORE VALUES creativity is vital to delivering robust solutions that can address their expectations and needs.

CONSTANT RENEWAL FULL COMMITMENT

Constant renewal has kept Ormat at the forefront of renewable energy development since our first turbine design back in Full commitment to our stakeholders and a sustainable future is a value central to our brand’s promise. That means that wherever 1965. It’s a promise that we fulfill by continually seeking out new challenges, by advancing new technologies, entering new we operate, we are fully committed to delivering safe, reliable, clean renewable energy products and services that minimize fields and testing out new business models - a promise that is the basis for our sustainable value proposition. environmental impacts and promote a clean energy future for generations to come.

STABILITY COURAGE

Stability is a core value that has helped establish and sustain our Company over the years. We strive to implement long- Courage comes from leveraging our collective knowledge, experience, prudent risk management and unwavering focus to term action plans and to advocate for thoughtful, well-planned renewable energy developments supported by firm financial continually delivering the very best results for our customers. foundations. In addition, we believe that a stable workforce, technology, product and operations are all hallmarks of an organization with well-integrated sustainable management systems.

16 17 The main stakeholder groups that were identified as relevant for the organization Stakeholder Group Methods of Communication KNOWING OUR are the following: IMPACTS – Employee communication portal and newsletters, periodical career and STAKEHOLDER professional performance reviews, participation in employee health and Employees safety committees, organized employee evaluations and open dialogue ENGAGEMENT between employees, managers and human resources representatives, events STRATEGY and conferences for employees.

Communication through our website, customer service framework, and on- Customers As a global Company that understands Social & going sales and business development relationships. Financing Entities the inherent value of sustainability as Employees Environmental NGOS a business strategy, we work to assess our impacts on the environment, Communication and updates delivered through the Investor Relations society and local communities, as arm, investors conferences and non-deal road shows, general shareholder Investors well as relevant impacts for our key meetings, earnings calls and relevant updates, through the ‘Investor & Shareholders stakeholder groups. As a result, Relations’ page on Ormat’s website9, annual and quarterly reports, SEC we have developed processes for filings and newsletters. Media identifying, communicating with and Customers Public Authorities, Policy Makers addressing grievances from our key & Regulators groups of stakeholders. As part of Engagement through environmental and social impact assessments, compliance reviews and action plans, annual and quarterly reports and this engagement strategy, and to Financing Entities better understand these risks and SEC filings, and on-going communication through our finance department, opportunities, we engage in on- mostly through the Investor Relations arm. going stakeholder dialogue and have developed an organization-wide Stakeholder Engagement Policy that Public Authorities, Engagement through industry organizations, lobbying activities, Investors & Local Communities Academia can be accessed at the following link.7 Shareholders Policy Makers participation in workshops, conferences and events, compliance reviews and & Regulators action plans, and on-going communication.

STAKEHOLDER GROUPS ENGAGED BY THE ORGANIZATION Communication through our global Stakeholder Engagement Policy and Local Communities relevant local communication strategies, tours and meetings at Ormat’s Ormat regularly engages with various local facilities. groups of internal and external OUR APPROACH TO STAKEHOLDER The policy sets out our promise of stakeholders in the context of our business ENGAGEMENT productive, transparent and equitable Active participation in relevant events and conferences, donations, operations. Ormat’s management relationships with stakeholders. Social & contributions and volunteering activities and cooperation in social and and relevant representatives from our Ormat has developed a business Environmental NGOs environmental projects and industry initiatives. various business units who engage strategy that places both directly with stakeholder groups – for environmental sustainability and example representatives from the social responsibility at the forefront Communication through Ormat’s website, press releases and informational Human Resources Department and from of our activities. Our stakeholders Media notes, tours at Ormat’s various facilities, and on-going communication. the Legal Affairs Department - initially play a central role in the realization identified the stakeholder groups listed of our sustainability strategy and it below. However, in order to better assess is our intent is to develop productive Cooperation with Ormat in conducting research and development activities the methods of engagement and the and fruitful relationships with these specifically with our Resource Department, providing support for scientific material interests of these stakeholders, stakeholder groups while also Academia initiatives and expansion of educational opportunities, and tours at Ormat’s and as part of the Company’s materiality expanding on the opportunities various facilities. assessment that we conducted according available for engagement with Ormat. to the best practice recommendations of the GRI, Ormat surveyed stakeholder Our approach to stakeholder groups to verify management’s and the engagement is demonstrated in our In addition to these methods of communication, all stakeholders can submit their grievances, questions or comments various departmental representatives’ Stakeholder Engagement Policy concerning the Company’s activities to [email protected]. assessments of relevant stakeholder that is publicly available on our groups for Ormat. website at the following link.8

7 https://www.ormat.com/Warehouse/userUploadFiles/Image/Ormat%20Stakeholder%20Engagement%20Policy.pdf 8 https://www.ormat.com/Warehouse/userUploadFiles/Image/Ormat%20Stakeholder%20Engagement%20Policy.pdf 9 https://investor.ormat.com/ 18 19 OUR STAKEHOLDERS’ KEY workplace diversity, employee corporate governance, local OUR STRATEGY - Ormat’s business and the issues that The materiality results presented INTERESTS AND CONCERNS well-being and local employment community engagement, innovation are of critical interest or concern to below show the relative correlation - as relevant to their stakeholder and the encouragement of green DEFINING WHAT’S the stakeholder group within the between matters of interest to Ormat’s We believe that an adequate group. Our customers identified energy as relevant issues. MATERIAL TO ORMAT context of their specific relationship stakeholders and management in and clear understanding of reliability of our product and/or to the organization. With regards to accordance with their significance to the our stakeholders’ interests and service, customer service, innovation The topics identified by our the latter, stakeholders were asked Company’s impacts on the one hand and concerns encourages closer and and data privacy and security of stakeholders are addressed in to rank a range of material issues our business strategy on the other. These more productive relationships information as key issues of concern. the scope of this report, in our Ormat began work to identify according to the level of importance issues – addressed in the scope of this with our stakeholders. It also Investors, shareholders, financing existing policies and engagement our material issues in 2018 of the issue to their specific report - reflect the significant economic, helps Ormat as an organization bodies, public authorities, policy frameworks and in our on-going by conducting a materiality stakeholder group. environmental and social impacts of the understand the needs and concerns makers and regulators identified business activities. We consistently assessment. Both the stakeholder organization together with their degree of those closely affected by our economic performance, operational seek out opportunities for active survey (described above) and The list of issues presented to our of influence on the assessments and activities where possible. This efficiency, corporate governance engagement with our stakeholders the materiality assessment were stakeholders was compiled based on decisions of our groups of stakeholders. insight enables us and to refine our performance, risk management and and embrace every opportunity to conducted with the assistance our understanding of relevant best business strategy in order to meet local community engagement as key hear their opinions and concerns of independent consultants. This practices and recommendations The results of the materiality survey these needs and concerns. issues. Local communities and social regarding our organization and our approach that enabled us to for compiling material issues for are presented below in two ways. In and environmental NGOs identified business activities. maintain objectivity in recording presentation to stakeholders, such as the first, the table where the material As part of our materiality assessment issues such as local community and analyzing the answers from those indicated in the Sustainability issues which are presented according conducted in 2018, our employees engagement, local employment, our various groups of stakeholders. Accounting Standards Board’s to their level of significance to both identified issues such as employment, corporate governance, philanthropy (SASB) standards for Electric our stakeholders and the Company, career and professional development and volunteering as relevant issues. Ormat’s internal and external Utilities and Power Generators10, and are classified according – including training opportunities, Finally, relevant stakeholders in stakeholders were surveyed for information from the news media to Economics & Governance, occupational health and safety, the media and academia identified their opinions and viewpoints and from benchmark studies on Environment and Social. In the regarding two aspects: the groups relevant issues for our business second, in a graph matrix shows all of stakeholders that are relevant to sector. the material issues together.

MATERIAL ISSUES

Economics & Governance Environment Social • Ethical Business Conduct • Brine & Steam Management • Safety and Emergency Planning • Legal and Regulatory Compliance • Encouraging Green Energy • Occupational Health and Safety • Ormat’s Operational Efficiency • Climate Change Mitigation • Reliability of Ormat's Service • Innovation in Products & Services • Water Management • Ormat’s Labor Relations • Risk Management • Biodiversity • Customer Service • Corporate Governance • Waste Management • Local Employment & Development • Executive Compensation • Energy Efficiency • Employee Training & Development • Greenhouse Gas Emissions from • Human Rights in the Supply Chain Operations • Workplace Diversity • Site Restoration and Preservation • Data Privacy & Security • Air Quality • Community Support • Climate Change Risk • Employees’ Well-Being • Local Community Engagement • Philanthropy & Volunteering

Stakeholders visiting Steamboat complex

10 As per the “Electric Utilities & Power Generators Sustainability Accounting Standard,” Industry Standard Version 2018-10.

20 21 Legal & Regulatory Compliance

Safety & Emergency Planning Ethical Business Conduct 5.0 Brine & Steam Occupational Health & Safety Management

Climate Change Mitigation Encouraging Green Energy Ormat’s Labor Relations

Local Employment and Development 4.0 Ormat Operations Water Management Efficiency

Corporate Governance Customer Service

Risk Management Innovation Reliability Human Rights in Supply Chain (Products & of Ormat’s 3.0 Services) Service Employee Training Development Waste Management

Biodiversity Executive Workspace Diversity Compensation 2.0 Air Quality Climate Change Risk Importance to Ormat's Management Ormat's to Importance Employees’ Well-Being

1.0 Local Community Engagement Community’s Support Energy Efficiency Site Restore & Preserve Data Privacy & Security

0 Philanthropy and Volunteering Operations GHG Emissions 0 1.0 2.0 3.0 4.0 5.0

Importance to Ormat's Stakeholders

Social Economics & Governance Environment

22 23 EXTERNAL INITIATIVES In addition, Ormat was part of Energy for federally-funded OUR STRATEGIC Ormat applies these and other of the Frontier Observatory research on drilling technology sustainability principles to the way for Research in Geothermal and machine learning. SUSTAINABILITY we evaluate opportunities and We endorse a number of external Energy (FORGE) initiative (in COMMITMENTS AND develop, manufacture and operate initiatives that assist us in realizing our partnership with Sandia National In the U.S., we sponsored the Women renewable energy facilities around environmental, social and corporate Laboratory and others) initiated in Geothermal Program (Wing SUSTAINABILITY PLAN the world. governance commitments. by the U.S. Department of Energy. Program) that supports the role of FORGE yielded new insights and women in the geothermal industry We have reported on our GHG techniques for characterizing and works to promote gender Ormat is committed to principles ORMAT'S CONTRIBUTION TO THE emissions to the CDP since 2010. We potential enhanced geothermal equality in the sector. We shared of Environmental, Social and UNITED NATIONS' SUSTAINABLE also report data on our carbon dioxide system (EGS) sites as well as information on the organization with Governance-related (ESG) DEVELOPMENT GOALS (SDGS) and GHG emissions to the Israeli tested new techniques and our relevant groups of stakeholders responsibility - commitments that Ministry of Environmental Protection’s tools in the field of geothermal and supported the organization’s are achieved through our business The United Nations (UN) adopted voluntary business reporting initiative, drilling technologies. Currently, mission at the 2018 Geothermal activities, policies, frameworks the Sustainable Development a practice that we have engaged in Ormat is partnering on several Resources Council Annual Meeting. for stakeholder engagement and Goals (SDGs) as part of the since 2011. proposals to the Department strategic objectives. 2030 Agenda for Sustainable Development (the “2030 We pursue sustainable innovation Agenda”). The 17 SDGs and the ORMAT'S MEMBERSHIPS OF ASSOCIATION - The table below outlines the main organizations of which Ormat is and leadership in renewable energy related 169 targets were designed a member and that are related to our various business and ESG activities. across several areas – namely to address the world’s most geothermal energy, recovered pressing social and economic energy generation and energy issues. More information on the Type of Organization Relevant Memberships storage. Each of these directions SDGs is available at the following allows our Company to advance link11. Furthermore, businesses • Geothermal Resources Council (GRC) – U.S. existing practices and push forward play a role in achieving the SDGs, 1 | Geothermal Organizations • International Geothermal Association (IGA) to improve our performance in ways while the goals simultaneously • Indonesia Geothermal Association that minimize material and energy present businesses with unique • Jesder - Turkish Geothermal Association inputs, maximize energy output and opportunities for engaging our operational efficiency. in innovation, social impact • California Energy Markets projects, managing risks, • California Energy Storage Alliance (CESA) For example, one of our improving relationships with • Energy Storage Association – U.S. established development stakeholders and for developing 2 | Energy Organizations • Society of Petroleum Engineers – U.S. practices involves the incremental a common and shared language • Utah Clean Energy increase of energy production for their social and environmental • Green Energy Association of Israel capacity for geothermal plants. sustainability programs. • World Energy Council We work to better understand the specific properties of a As a leading renewable energy • The American Society of Mechanical Engineers (ASME) geothermal reservoir and add Company with global operations, • National Safety Council – U.S. new energy generation capacities Ormat recognizes the role we play in • National Fire Protection Association (NFPA) – U.S. progressively in stages. As achieving the SDGs and the related 3 | Health and Safety Organizations • Alliance for Industrial Efficiency such, we strive to deliver targets in our countries of operation • American Society of Safety Professionals (ASSP) more renewable energy while and through our activities. We strive • CA OPC Engineers Board maintaining substantially the to address relevant SDGs through • California Community Choice Association (CalCCA) same developmental footprint. our business activities and social Similarly, when it comes to and environmental engagement • CalChamber – California, U.S. developing new renewable energy plans for local communities. • Churchill Economic Development Authority – Nevada, U.S. plants, we work to fully understand • Hawaii Island Chamber of Commerce the needs and concerns of the The following table details the • Elko Chamber of Commerce – Nevada, U.S. local stakeholder community and most relevant SDGs and targets 4 | Chambers of Commerce • Israel Export Institute to build lasting relationships and that we address through our • Manufacturers Association of Israel specific community engagement business activities and social and • Israel-Asia Chamber of Commerce programs designed to meet those environmental engagement plans. • Israel Turkey Business Council needs and concerns. • Israel Latin America Association

11 https://sustainabledevelopment.un.org/

24 25 Sustainable Development Goal Relevant Targets Relevant Business Activities

• Ormat is one of the leading providers of geothermal energy generation solutions worldwide, thus helping countries and • 7.2: Increase substantially the share of renewable energy in the global energy mix communities address their renewable energy targets. In addition, Ormat provides recovered energy generation solutions and • 7.A: Enhance international cooperation to facilitate access to clean energy research and technology, including solutions for energy storage, which contribute to the feasibility of renewable energy alternatives. renewable energy, energy efficiency and advanced and cleaner fossil-fuel technology, and promote investment in • We work with governments and through international frameworks to promote our renewable energy solutions, including support energy infrastructure and clean energy technology for research and development in the geothermal and energy storage fields, collaborations with relevant industry organizations and • 7.B: Expand infrastructure and upgrade technology for supplying modern and sustainable energy services for all with leading renewable energy companies. in developing countries, in particular least developed countries, small island developing States, and land-locked • Ormat works to develop its renewable energy technologies in developed and developing countries alike, with several plants Affordable and Clean Energy developing countries, in accordance with their respective programs of support in developing countries such as Indonesia, Guatemala and Honduras, among others. Many of these projects support national renewable energy goals and international commitments in developing countries.

• 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and • Ormat prides itself on 100 percent local employment at all of our operational facilities and power plants. innovation, including through a focus on high-value added and labor-intensive sectors • We work to develop the skills and knowledge of our employees, including at our manufacturing facilities thus encouraging the • 8.3: Promote development-oriented policies that support productive activities, decent job creation, upgrading of skills for labor-intensive sectors. entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and • Through our renewable energy solutions, we seek to help countries decouple economic growth from environmental degradation medium-sized enterprises, including through access to financial services caused due to the burning of fossil fuels and from the use of non-renewable resources for energy generation. • 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor • We promote equality in employment for all of our employees regardless of gender, race, cultural background, religion, physical to decouple economic growth from environmental degradation, in accordance with the 10-year framework of disposition, or other irrelevant factors. programs on sustainable consumption and production, with developed countries taking the lead • Ormat has an advanced health and safety framework that is implemented through our Quality, Environment, Health and Safety • 8.5: Achieve full and productive employment and decent work for all women and men, including for young people policy. We seek to uphold the highest level of health and safety standards at all of our sites. Decent Work and Economic and persons with disabilities, and equal pay for work of equal value • We fully support the labor rights of all our employees and honor their basic rights to decent work and fair pay. We manage human Growth • 8.8: Protect labor rights and promote safe and secure working environments for all workers, including migrant resources at our Company with employees’ rights in mind. workers, in particular women migrants, and those in precarious employment

• 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable • Ormat’s power plants act as significant energy generation infrastructure in the countries where we operate. Often, the power access for all plants are completely new infrastructure. In addition, the nature of renewable energy infrastructure works to increase the overall • 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency level of resilience in the country of operation. and greater adoption of clean and environmentally sound technologies • Through our power plants and renewable energy solutions, we actively encourage the adoption of clean and environmentally- • 9.A: Facilitate sustainable and resilient infrastructure development in developing countries through enhanced sound technologies, namely in developing countries that may have limited access to such solutions. Industry, Innovation and financial, technological and technical support to African countries, least developed countries, landlocked developing • Our recovered energy power plants enable industries to produce clean electricity in-house without generating excess emissions. Infrastructure countries and small island developing States

• 12.2: Achieve the sustainable management and efficient use of natural resources • Ormat encourages the sustainable use of materials and resources, including natural geothermal resources. • 12.4: Achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in • We encourage and track the generation of waste products and the use of materials (namely non-renewable materials) at our accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order operational sites. to minimize their adverse impacts on human health and the environment • We actively promote and enforce practices for recycling, reclamation and reuse of materials at our operational sites, with a Responsible Consumption and • 12.5: Substantially reduce waste generation through prevention, reduction, recycling and reuse specific emphasis on our manufacturing facilities. Production

• 15.1: Ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems and • Throughout the development process of geothermal resources, we work to preserve and take the surrounding natural their services, in particular forests, wetlands, mountains and drylands, in line with obligations under international environment – including the native flora and fauna – into account. As such, we conduct environmental impact assessments to agreements ensure that we have an adequate understanding of our impacts. • 15.9: Integrate ecosystem and biodiversity values into national and local planning, development processes, poverty • As part of the environmental impact assessments that we conduct, we consult with local communities and local government reduction strategies and accounts administrators. Life on Land

26 27 CHAPTER III. ABOUT THIS REPORT

McGinness Hills geothermal complex, NV, U.S., 140 MW

28 29 we intend to publish a sustainability ABOUT THIS REPORT THIS REPORT REGARDING THIS REPORT contain such words or expressions. report on an annual basis, as opposed Unless otherwise noted, this report Such forward-looking statements to our former practice of publishing a includes environmental and social data We have strived to provide all of the include, but are not limited to: Ormat’s 2018 sustainability report sustainability brief and/or update on from internal systems and information from relevant data and information regarding statements about our business highlights our environmental, social a biennial basis. January 1, 2018 through December 31, 2018 our sustainability performance and strategy; statements about Ormat’s and governance (ESG)-related In compiling this report, Ormat has and is focused on our material operations activities for 2018 in the scope of this competitive strengths; statements measures, initiatives and activities for followed the GRI’s requirements that includes our operations in: the United report. Stakeholders who are interested about Ormat’s development and the period of January 2018 through and recommendations in defining States, Israel, Turkey, Honduras, Guatemala, in understanding or clarifying the operation of electricity generation, December 2018, i.e. the reporting the reporting Boundaries, as Guadeloupe (French Caribbean) and information presented, or who have storage and energy management period. This is the Company’s inaugural outlined in the section below. Kenya. Ormat has operations or holdings questions regarding the content of the assets, including distributed energy sustainability report. This report has We have taken into account our in other locations such as Indonesia, which report, can contact us through one of resources; statements about been prepared in accordance with material entities over which the are not operationally material and hence the following channels: Ormat’s other plans, expectations, the GRI Standards: Core option.12 Company has control, including the data/detailed analysis is not included in objectives and targets; statements To assist readers in locating relevant those in which we have significant this report unless otherwise mentioned. All Mail requests: about Ormat’s views on market and information throughout the report, we influence over the activities that of the financial or economic information is Ormat Technologies, Inc. industry developments and economic provide a GRI content index on pages are material for the Company disclosed according to our Annual Report 6140 Plumas Street conditions, and the growth of the 102-121 of this report. In addition, the according to their economic, on Form 10-K filed with the U.S. Securities Reno, NV 89519-6075 markets in which Ormat conducts report references the Sustainability environmental and social aspects. and Exchange Commission (SEC), which U.S. its business; and statements about Accounting Standards Board’s (SASB) should be referred to in case of any the growth and diversification of reporting standards for Electric Utilities For the purposes of this report, discrepancies. Requests for general information: Ormat’s customer base and Ormat’s and Power Generators.13 “Ormat” “We”, “Our”, “Us”, or “the [email protected] future revenues, expenses, earnings, Company” refer to the U.S.-based This sustainability report focuses on capital expenditures, regional market Previously, the Company generated Company Ormat Technologies the environmental and social topics Requests for sustainability-related penetration, electricity generation, sustainability briefs and/or updates Inc. and its controlled entities that that are material and relevant to information: and other operational performance for our stakeholders, based in are included in the Company’s Ormat’s operations and business, and [email protected] metrics, among others. All of these principle on the GRI Standards, for consolidated financial statements. which are of greatest interest to our and other forward-looking statements the years 2010-2017. All previous Details regarding the entities stakeholders. The content presented Online form: made in or during the course of this sustainability publications are included in our consolidated in the report was prioritized www.ormat.com/en/company/ report are made only as of the date available on the Company’s financial statements can be found through a process of research and contact/main hereof and Ormat undertakes no website at the following link.14 The in our Annual Report filed with the consideration of a variety of sources obligation to update or revise any most recent sustainability report SEC at the following link.15 All of the including feedback from our groups forward-looking statements, whether published covered the period of entities included in our consolidated of stakeholders, the GRI Standards, FORWARD-LOOKING STATEMENTS as a result of new information, future 2016-2017. financial statements or equivalent including its Reporting Principles developments or otherwise, except documents are covered by this for defining report content, which This report may contain “forward- as required by law. You are cautioned This is the first sustainability report report, unless otherwise noted. include: Stakeholder Inclusiveness, looking statements” within the not to place undue reliance on compiled in accordance with the GRI Sustainability Context, Materiality and meaning of the Private Securities the expectations, projections and Standards: Core Option and there Ormat obtains independent Completeness, and the Reporting Litigation Reform Act of 1995. other forward-looking statements are no restatements of information external assurance of its annual Principles for defining report quality, These statements involve estimates, made in or during the course of this that have to do with mergers or financial information, the annual which include: Accuracy, Balance, expectations, projections, goals, report as actual future results and acquisitions, changes in base years accounts and management reports Clarity, Comparability, Reliability and objectives, assumptions and risks, and developments may differ materially or periods, changes in the nature of (individual and consolidated with Timeliness. In addition, we roughly activities, events and developments from such expectations, projections business, or changes in measurement those of its controlled entities) by consulted the SASB sector-relevant that may or will occur in the future. and forward-looking statements due methods. As such, the only significant PricewaterhouseCoopers LLP, which standards, and other relevant When used in or during the course to a number of risks, uncertainties and notable change from previous has served as the Company’s auditor third-party sustainability reporting of this report, the words “may”, “will”, and other factors, many of which reporting periods is the application since 1988. We did not receive frameworks. We expect the content “could”, “should”, “expects”, “plans”, are beyond Ormat’s control. These of the GRI Standards to the external assurance for this, our first and data quality of our report to “anticipates”, “believes”, “estimates”, risks, uncertainties and other factors organization’s sustainability reporting sustainability report compiled in improve and evolve moving forward as “predicts”, “projects”, “thinks”, include, but are not limited to, the framework. Specifically, there are no accordance with the GRI Standards’ we further develop our sustainability “forecasts”, “guidance”, “continue”, risks, uncertainties and other factors changes in the list of material topics Core option, but we are considering strategy and as we continue to “goal”, “outlook”, “potential,” described in Ormat Technologies, and topic Boundaries as this is the to secure external assurance for the receive relevant and worthy feedback “prospect” or “target”, or the negative Inc.’s Form 10-K filed with the SEC first time that the organization is data reported in our forthcoming from our stakeholders. of these terms or other comparable from time to time, in Ormat’s quarterly conducting a materiality assessment sustainability reports. terminology are intended to identify reports on Form 10-Q that are filed and defining topic Boundaries per the forward-looking statements, although with the SEC. GRI Standards. Following this report, INFORMATION BOUNDARIES OF CONTACT POINT FOR QUESTIONS not all forward-looking statements

12 According to the Global Reporting Initiative, “Consolidated Set of GRI Sustainability Reporting Standards 2016.” The Standard is issued by the Global Sustainability Standards 14 https://www.ormat.com/en/company/engagement/view/?ContentID=140 Board (GSSB). The Standard applied is effective for reports or other materials published on or after 1 July 2018. 15 https://investor.ormat.com/Doc/Index?did=50940528 13 Sustainability Accounting Standards Board, “Electric Utilities & Power Generators Sustainability Accounting Standard,” Industry Standard Version 2018-10. 30 31 CHAPTER IV. GENERATING ENVIRONMENTAL VALUE AND MEASURING OUR IMPACTS

Zunil geothermal power plant, Guatemala, 23 MW

32 33 MITIGATING ABOUT OUR GEOTHERMAL Flash systems – Geothermal fluid is Geothermal Power SOLUTIONS extracted from the underground reservoir (figure a) CLIMATE CHANGE and flows from the wellhead through a RISKS WHILE Geothermal energy is produced by heat gathering system to flash tanks and/or energy derived from the earth’s molten separators. There, the steam is separated ENCOURAGING core and transported to the surface by from the brine and sent to a demister, RENEWABLE movements of crustal plates, intrusion where any remaining water droplets are of molten magma and deep circulation removed. This produces a stream of dry ENERGY SOLUTIONS of groundwater. Reservoirs of hot water saturated steam, which powers a steam under pressure result from these forces, turbine coupled to a generator to produce and it is these underground reservoirs that electricity. In some cases, the brine at the Ormat identifies, develops and harnesses outlet of the separator is flashed a second Ormat is a global leader in renewable energy from. Drilling wells into geothermal time (dual flash), providing additional energy solutions: geothermal energy, reservoirs enables the steam and high- steam at lower pressure used in the low- recovered energy and energy storage pressure hot water to be captured and pressure section of the steam turbine and management. We have developed directed to drive turbines in power plants. to produce additional power. Steam and manufactured over 2900 MW16 This converts earth-bound energy into exhausted from the steam turbine is of geothermal and recovered energy electrical energy. (figure a) condensed in a surface or direct contact Consender power plants since our Company was condenser cooled by cold water from a Binary Systems (figure b) established over 50 years ago. All of Geothermal energy offers numerous cooling tower. The non-condensable gases Generator Turbine these power plants operate without benefits for a world seeking alternatives (such as carbon dioxide) are removed by fossil fuel consumption. At Ormat, our to polluting and emissions-ridden fossil means of a vacuum system in order to motivation to mitigate climate change, fuels. Geothermal energy is a naturally maintain the performance of the steam Vaporizer Fan reduce GHG emissions, advance occurring and locally available resource condenser. The resulting condensate is

Geothermal Fluid Preheater energy efficiency and promote the use in a number of locations worldwide. used to provide make-up water for the Motive Fluid Pump of renewable energy sources. These It provides firm, flexible and reliable cooling tower. The hot brine remaining Motive Fluid (Liquid) aims lie at the heart of our business and base-load electricity. Equally vital, after separation of steam is injected (either Motive Fluid (Vapor) Injection Pump represent our key value proposition for geothermal is a low carbon alternative directly or after passing through a binary our customers. They also have been that consumes fewer resources such plant to produce additional power from identified as highest priority by the as land and water and has a much the residual heat remaining in the brine) stakeholders who participated in our lower impact on the environment back into the geothermal resource through Production Pump materiality assessment. compared with conventional fossil fuel a series of injection wells. (figure c) Hot Geothermal Fluid Cooled Geothermal Fluid combustion. The following chapter provides There are a number of environmental an overview of our renewable There are two main types of geothermal advantages to binary geothermal Steam energy solutions and their key power plants – binary and flash systems: power plants as compared to flash environmental benefits, mainly geothermal steam turbine plants: Steam Systems Steam Cooling Tower their significantly low GHG Binary systems - Geothermal fluid is Firstly, reinjection of all of the (figure c) Turbine emission and energy impacts extracted from the underground reservoir geothermal resources exploited- Generator for both our Company and our and flows from the wellhead through a promotes superior efficiency. By Condenser stakeholders. We do this by gathering system to a vaporizer that heats continuously recharging geothermal providing details of the emissions a secondary working fluid (typically an systems and reducing production- and energy used in our drilling and organic fluid, such as pentane or butane) related pressure drawdowns, binary Cooling Water Pump manufacturing operations, offices that is vaporized and is used to power geothermal power plants help and owned and operated power the turbine. The organic fluid is then maintain the overall geothermal Vacuum Pump Muffler plants. In addition, the chapter condensed in a condenser, which may be reservoir pressure. In addition, air- Blow Down details how we work to manage cooled directly by air or by water from cooled binary plants do not consume Ejector M Motor both the geothermal resources, a cooling tower, and sent back to the water for cooling (for additional Production Well Non Condensable Gas Removable System waste and water resources vaporizer through a pump. The cooled details on amount of water used associated with our operations, geothermal fluid is then reinjected back in different geothermal plants see as well as relevant biodiversity into the reservoir. Binary technology can the water use table presented impacts that are measured and be utilized on a wide range of resources below). Finally, air-cooled binary Hot Geothermal Fluid Cooled Geothermal Fluid assessed through environmental from low enthalpy to high. Multiple high power plants have a low profile with impact assessments. enthalpy binary facilities are in service minimal visual impact, as they do around the world. (figure b) not emit a plume.

16 As of December 2018.

34 35 including geological, geochemical heat may be captured in the recovery 2000, 2009, Exploration and Evaluation of Olkaria III Complex Kenya Geothermal 150 Geothermal Resources and geophysical surveys, surface process using a similar power plant to 2013, 2014, 2016, 2018 water analyses, soil surveys and Ormat’s OEC geothermal power plant, OREG I – CS7, CS9, CS10, North Dakota and South Recovered Energy on Gas 2006 22 Ormat’s structure as a vertically- geologic mapping. We begin which is used by recovered energy CS1123 Dakota, U.S. Turbine integrated Company enables us design and construction of the power plants to generate electricity OREG II – CS3, CS5, CS8, North Dakota, Minnesota Recovered Energy on Gas to engage in every element of plant once the exploration and without burning additional fuel. As 2009 22 CS1224 and Montana, U.S. Turbine the geothermal energy process, drilling phases are completed, and such, recovered energy power plants Recovered Energy on Gas from start to finish. As such, and it is determined that the geothermal present high-functioning solutions in OREG III – GRE - CS1325 Minnesota, U.S. 2010 5.5 before we are able to engage in a resource is worth pursuing in terms the context of circular economy and Turbine geothermal power project, we carry of resource accessibility and cost. circularity, or economic systems aimed Recovered Energy on Gas OREG IV – Peetz Colorado, U.S. 2009 3.5 out exploratory and evaluation at minimizing waste generation and Turbines activities to ensure that the making the most of existing resources. Ormesa Complex California, U.S. Geothermal 1987-1989, 2005-2007 39 geothermal resource is significant ABOUT OUR RECOVERED ENERGY Recovered energy generation is and sustainable for the generation SOLUTIONS therefore another critical part of Platanares26 Honduras Geothermal 2017 38 of renewable power over time. our sustainable energy portfolio, Recovered energy is a green energy generating electricity with practically Puna Complex27 Hawaii, U.S. Geothermal 1993, 2011, 2012 38 Starting from the initial evaluation solution whereby electricity is no emissions. The market for the phase in the exploration of generated from recovered of waste heat is present in Raft River Idaho, U.S. Geothermal 200828 11 geothermal resources, we map the or “waste heat”. Recovered energy locations where available electricity natural features of the potential comes from residual heat generated as resources are expensive or where the San Emidio Nevada, U.S. Geothermal 201229 11 geothermal site, such as springs a by-product of many heat- producing regulatory environment facilitates 330 (Ormat’s share Sarulla Indonesia Geothermal 2017, 2018 or lakes in close proximity, as well processes. These include gas turbine- construction and marketing of power represents 42 MW) as other relevant elements of the driven compressor stations and a generated from these sources. natural habitat. We also conduct variety of industrial processes, such However, typical recovered energy Steamboat Complex Nevada, U.S. Geothermal 1992, 2005, 2007-2008 65 surveys of the surrounding area as cement manufacturing. Residual projects tend to be smaller than 9 MW. Tungsten Mountain Nevada, U.S. Geothermal 2017 27

Tuscarora Nevada, U.S. Geothermal 2012 18 Ormat’s Geothermal and Recovered Energy Power Plants in Operation as of 201817 The table below summarizes the portfolio of power plants and complexes that Ormat owns and operates, whether Zunil Guatemala Geothermal 1999 23 developed by Ormat or acquired: TOTAL 910

Project Location Application Operational Since18 Capacity (MW)19

Amatitlan Guatemala Geothermal 2007 20

Bouillante Guadeloupe Island Geothermal 1995, 200420 15

Brady Nevada, U.S. Geothermal 1992, 2004, 2007 26

Brawley Complex California, U.S. Geothermal 2011 13

Don A. Campbell Nevada, U.S. Geothermal 2014, 2015 39 21 Complex 17 We indirectly own and operate all of our power plants, although financial institutions hold equity interests in one of our Opal Geo subsidiaries, which owns the McGinness Hills Phases 1 and 2 geothermal power plants, the Tuscarora and Jersey Valley power plants and the second phase of the Don A. Campbell power plant, all located in Nevada. In the 1985, 1993, 2005, 2006, table above, we list these power plants as being 100 percent owned because all of the generating capacity is owned by Opal and we control the operation of the power plants. Heber Complex California, U.S. Geothermal 81 18 In power plants that were built in phases, the year of each new phase is indicated. 2008 19 In power plant owned by Ormat the capacity figure given is the net to the grid generating capacity, which is defined in Ormat’s 10K reports. In solar power plants the MWdc is indicated. Jersey Valley Nevada, U.S. Geothermal 2011 10 20 Acquired by Ormat in July 2016. Ormat owns a 60 percent stake in the project company Geothermie Bouillante SA. 21 Ormat owns a 63.3 percent stake in Don A. Campbell complex. 22 The Neal Hot Springs power plant was acquired by Ormat in April 24, 2018 and 40 percent interest is held by Enbridge. Mammoth Complex California, U.S. Geothermal 1984, 1990 29 23 Ormat owns a 63.3 percent stake in the OREG I facilities. 24 Ormat owns a 63.3 percent stake in the OREG II facilities. 25 Ormat owns a 63.3 percent stake the OREG III facilities. 26 Ormat holds the assets under a Build, Operate and Transfer (BOT) structure for approximately 15 years. McGinness Hills Complex Nevada, U.S. Geothermal 2012, 2015, 2018 140 27 Ormat owns a 63.3 percent stake in the Puna Complex. 28 The Raft River power plant was acquired by Ormat in April 24, 2018. Ormat provided EPC services and installed its proprietary technology in Raft River to its former owner 22 U.S. Geothermal in 2007. Neal Hot Springs Oregon, U.S. Geothermal 2012 22 29 The San Emidio power plant was acquired by Ormat in April 24, 2018.

36 37 ABOUT OUR ENERGY STORAGE the need for services, such energy accelerate long-term growth, expand EMISSIONS FROM OUR CARBON FOOTPRINT AND AND ENERGY MANAGEMENT storage systems, that can “balance our market presence in a growing GHG EMISSIONS AVOIDED SOLUTIONS the grid”. Common applications market and further develop our OUR POWER for energy storage systems include energy storage, demand response PLANTS AND Ormat’s operating activities We continually look for ways to ancillary services, wind/solar and energy management services, from owned facilities and advance and stay at the forefront of smoothing, Peaker replacement, including the VPower™ software OPERATIONS purchased electricity (Scope 1 new thinking and approaches in the and transmission and distribution platform. We plan to continue and 2)33 emissions, which include renewable energy market. Energy deferral. More information on the providing services and products to manufacturing facilities and storage is one such sector. aspects and benefits of energy existing Viridity customers, while Our geothermal and recovered machinery, offices, power plants, storage solutions can be found on expanding our service offerings to energy power plants have The GHG reduction target we set corporate automobile fleet, drilling Energy battery storage systems the Storage & Energy Management include development and EPC into negligible levels of emissions. That in 2018 is for the total avoidance of rigs and electricity consumption utilize surplus, or available section of our website at the new regions and targeting a broader said, we actively work towards the carbon dioxide emissions achieved at our facilities, among other electricity, that enables utilities following link.30 potential customer base. reduction of the GHG emissions 31 through our power plants and sources, generated 35,997 tons to optimize the operation of the generated through our operations our activities: total production CO2 equivalents in 2018.34 * More grid, run generators closer to full In March 2017, we entered the energy Ormat believes energy storage and and business practices, which of renewable energy (GWh) information on the breakdown of capacity for longer periods, and to storage, demand response and energy advanced energy management includes commitments to reducing in addition to the total carbon our carbon footprint calculations operate the grid more efficiently and management markets following the solutions will play an increasingly any subsequent climate change dioxide emissions avoided (tons for 2018 is provided in the graphs effectively. Many renewable energy acquisition of substantially all of important role in the renewable effects arising from our operations. CO2 equivalents) arising from and charts below. sources, such as wind and solar the business and assets of Viridity energy sector in the coming decade The consolidation approach for the Ormat’s activities and subsequent are characterized by fluctuation Energy, Inc., a Philadelphia-based and our Company plans to accelerate calculation of our carbon footprint renewable energy generation. The majority of our direct Scope 1 in the production of power. As the Company. The acquired business and further growth in this area. is operational control. In order to Ormat consistently considers GHG emissions arise from the operation penetration of renewable energy assets comprise our Other segment. improve the internal measurement KPIs as part of our general efforts of our geothermal power plants, i.e. generation increases, so too does We are using our Viridity business to of our GHG emissions, we have to improve our business practices auxiliary emissions from our power expanded our methods for data and will consider setting additional plants. Following auxiliary emissions, collection from our relevant GHG KPIs moving forward. use of vehicles at our various facilities operational sites with the goal of are the second largest source of Scope 1 estimating our level of impact and emissions, which are used for travel and generated emissions and have Our renewable energy power maintenance at our sites, including at set 2018 is the base year for our plants emit little GHG emissions our power plants and drilling locations calculations. We make concerted and thus enable our customers and to transport materials and parts efforts to both track and minimize to control their own levels of at our factories and workshops. The our direct (Scope 1) and indirect emissions and resulting climate third most significant source of direct (Scope 2) GHG emissions from our change effects. As such, these emissions is from the drilling rigs used in power plants and operations and issues were identified as material the geothermal exploration and power to regularly report on our progress by our key groups of internal and plant construction phases. Other less to the CDP and the Israeli Ministry externalScopes stakeholders. % (2018) of Environmental Protection.32 Scope 1+2

Scope 2 8,316 23% Scope 1 27,680 77%

Plumsted storage unit, NJ, U.S. 20 MW

30 https://www.ormat.com/en/renewables/storage/main/ 32 Through the voluntary GHG reporting framework. 31 “Greenhouse gases” are defined by the U.S. EPA as “gases that trap heat in the atmosphere. These gases include: carbon dioxide (CO2), methane (CH4), nitrous oxide 33 Scope 1 GHG emissions are direct emissions from sources that are owned or controlled by the Company, including auxiliary emissions from our power plants. Scope 2 (N2O) and fluorinated gases, or high global warming potential gases. emissions are indirect GHG emissions from the consumption of purchased electricity. 34 The source of the emission factors and global warming potential is the United Kingdom’s Department for Environment, Food & Rural Affairs (DEFRA). As such, the 38 gases included in our carbon footprint calculation are CO2, CH4, and NH4. 39 * In the process of calculating our CO2 emissions for 2019, we noted a miscalculation in the auxiliary emissions of our power plants in 2018 – an aspect included in our Scope 1 emissions calculations. Corrected figures for our 2018 Scope 1 emissions are provided below. Scope 1 by Country significant sources of direct emissions calculations is derived from the auxiliary 457,960 kWh and resulted in the include diesel generators, which are power consumed by those geothermal avoidance of emissions totaling 260 tons Scope 1 | Country used for emergencies or, at some of our power plants, which was calculated CO2 equivalents in 2018.37 power plants, in the event of outages according to the relevant emission factors Guadeloupe (France) or maintenance shut downs (planned for steam plants. We continue to make efforts to improve Honduras or unplanned), to power on-going the energy efficiency of our facilities and to Israel Turkey operations at our on-site offices,35 as The Scope 1 emissions for 2018 encourage a transition to renewable energy 1% ~0.1% well as from air conditioning units used from the above-mentioned sources sources in our manufacturing facilities, Guatemala in our factories at our offices, heavy- totaled 27,680 tons CO2 equivalents. in line with our overarching mission and 8% duty trucks used to transport materials commitment to renewable energy. and machinery and from machinery We also measure the emissions from Kenya that is owned by the Company and electrical energy consumption from the The total Scope 2 emissions for 2018 14% used in our factories and workshops grid – i.e. Scope 2 or indirect emissions from electricity consumption at our (such as forklifts, cranes and welding - at our offices, manufacturing facilities operational sites was 8,316 tons CO2 machines, among others). and power plants. equivalents. USA 77% The majority of our binary geothermal At our manufacturing facility in Yavne, Our GHG emissions intensity calculation, power plants with 100 percent geothermal Israel, we generate solar electricity i.e. the relative intensity of our emissions fluid reinjection and all of our recovered through the use of rooftop Photovoltaic compared to revenues in FY201838 was energy power plants do not generate (PV) panels. The relevant emissions are 0.0000501 CO2 equivalents/FY2018 emissions and therefore were not included calculated according to an emissions revenues. This calculation, which marks our Scope 1 emissions calculations. factor of zero. The electricity that we 2018 as the base year for comparison However, some of our steam and binary generate through the solar panels in in future calculations, acts as a point of plants that are unable to engage in 100 used for self-consumption and is sold comparison for us to track the intensity percent geothermal fluid reinjection due back to the local electrical utility. of our emissions over time, assisting us to constraints tied to the nature of the local In 2018, self-consumption of solar energy in accurately accounting for the extent geothermal resource do generate GHG at our manufacturing facility totaled of our environmental impacts. emissions.36 As such, another source of 1,603,480 kWh. The energy generated direct emissions that was included in our sold to the local electrical utility was ScopeScope 2 by 2 Country| Country Scope 1+2 by Source

Guadeloupe (France) Guatemala 1% ~0.1% Honduras 4% Turkey Kenya Plant electricity production used to 3% ~0.1% 8% operate the plant (auxiliary) Electrical Energy Consumption

41% Vehicles - others (used for company work) Israel 23% Drilling Rigs

Machinery Owned & Leased by Company - 21% Used in Factory (forklifts, cranes, welding machine etc.)

Generators USA 74% AC - Used in Ofces and Factories

Vehicles - Heavy Duty Truck (used for company work)

Gas Used in Company Kitchen (LPG)

23%

35 The air conditioning unit data that was included in the calculations included data for the majority of Ormat’s relevant sites, but the main source of emissions from A/C units arises from our manufacturing facilities in Yavne, Israel. 36 These geothermal power plants include: Ormesa, Herber 1, Brawley Complex, Amatitlan, Zunil, Olkaria III, Steamboat Hills and Desert Peak. 37 The presented data was not taken into account in the calculations of Ormat’s total Scope 2 CO2 emissions, i.e. deduction of the solar offset of 40 260 tons CO2 equivalents. 41 38 Ormat’s revenues in RY2018 total approximately USD $719,000,000, which was used as the basis for the energy intensity calculation. EMISSIONS FROM The chart shows the renewable power producers and utilities over the ENERGY USE, The table below reflects our internal energy consumption 2018, which includes electricity offset recorded by Ormat years, which have an installed base of the energy resources used in our global operations: OPERATIONS in 2018 compared with other base more than 1,700 MW. EFFICIENCY AND load electricity generation methods, FUEL RESOURCE such as conventional fossil fuel-based Energy consumption in the organization (GJ) 2018 In 2018, Ormat-owned power plant methods.39 These figures present MANAGEMENT AT facilities generated 5,857,963 MWh only the emissions that were avoided ORMAT Fuel Consumption in the Organization40 of electricity. Note that the reported through the generation of renewable MWh is not counted as part of our power at Ormat’s owned power plants Gasoline 119,784 calculation of direct (Scope 1) and in 2018. Ormat’s contribution to global Ormat strives to ensure optimization Diesel 29,333 indirect (Scope 2) emissions as GHG mitigation is strengthened and ultimate efficiency in its use the electricity generated is sold to through the avoidance of emissions in of energy resources throughout Red Diesel 35,419 utilities and is counted as part of the geothermal and recovered energy our value chain and in our internal Kerosene 477 their own emissions reporting. power plants that Ormat has sold to operations. As an energy generator, we seek to improve our efficiency FOD 484 by using advanced technologies and equipment in order to optimize LPG 461 the energy generated by our power 41 plants. As an energy consumer, we Electricity Consumption in the Organization 5.53 million work to improve our performance Electricity Consumption 100,385 through designated action plans tons of CO2 and by raising employee awareness Total Energy Consumption in the Organization (GJ) 274,793 regarding the use of energy in our operations, offices, buildings, facilities and transportation.

The table below reflects the electricity generated and sold by the organization: 3.96 million ENERGY CONSUMPTION IN THE tons of CO2 ORGANIZATION Electricity Sold by the Organization (GJ)42

The fuel consumption figure in terms Electricity Sold by the Organization 21,090,315 of energy (GJ) is obtained from direct measurement of the fuel used at each facility based on its calorific value (NCV), and applying the accepted 2.35 million units of fuel conversion from the “UK tons of CO2 Government GHG Conversion Factors for Company Reporting”.

The internal electricity consumption within the organization and the total amount of electricity generated and sold by the organization was calculated using inputs on energy purchased or generated, and using the following 0.06 million formula: electricity (GJ) = electricity (MWh) x 3.6 GJ/MWh tons of CO2

ORMAT PLANTS NATURAL GAS PLANTS OIL PLANTS COAL PLANTS

39 The emissions from Ormat’s power plants and the relevant calculation are explained above. The other electricity sources are from “CO2 Emissions from Fuel Combustion Highlights 40 As of 2018, Ormat did not consume any renewable fuel, and therefore this metric is not reported. 2018” International Energy Agency (IEA), 2018. 41 As of 2018, we did not separately measure our heating, cooling and steam consumption as these are not material energy uses and of our heating, cooling and steam energy needs are generated through electrical energy. 42 42 Ormat does not sell heating, cooling or steam energy resources, and therefore only date on the electricity sold by the organization through generation in our power plants is reported. 43 ENERGY INTENSITY factory or workshop manager resulting in reduced electricity MANAGEMENT OF brine – which are composed of water, air-cooled plants, water resources are is responsible for assessing and consumption during the evening salts and other minerals that carry used only for maintenance activities We calculated the energy intensity mapping potential areas for energy surge hours. GEOTHERMAL BY- the heat from deep underground to and for administrative and domestic for our organization, or the measure efficiency improvements and then PRODUCTS AND the geothermal power plant on the purposes (gardening, toilets, etc.). In our of the efficiency or inefficiency implementing the identified projects Our largest vehicle fleet is in the earth’s surface. plants that are located in areas of water in the use of energy resources in at their operational location. This United States, where most of our WATER RESOURCES scarcity, such as Nevada and Kenya this the organization, by dividing the is added to our Company-wide power plants are located. Our We develop geothermal power plants provides a significant advantage. In our absolute energy consumption by commitment to encouraging the operational locations there are that involve reinjection and recirculation water cooled plants water is used for our organization as presented responsible use of energy resources taking strides to reduce the carbon of the geothermal resource in what cooling, mostly due to local weather above - 274,793 GJ by our revenues at all levels of the Company. Some footprint from vehicle use, while The management of the geothermal are known as “closed loop” systems. and atmospheric conditions. for 2018, i.e. US$719,000,000, to of the Company-wide initiatives also decreasing our fleet expenses. resources required for geothermal This method continuously recharges reach an energy intensity ratio we have implemented in recent To achieve this goal, Ormat has energy generation and non- geothermal systems by maintaining • Manufacturing facility: Water of 0.000382 GJ/US$. This is our years include refurbishing our partnered with a third party fleet geothermal water resources are of consistent geothermal fluid flow and resources are used for various organization-specific metric that we manufacturing facilities with LED management Company to not only key importance to Ormat and our pressures. Reinjection of brine and applications by the factory staff plan to report on in a comparative lighting, installing more efficient manage the purchase and sale of stakeholders. We work to manage our condensate help reduce production- and to facilitate the manufacturing fashion in forthcoming reports. air conditioning and cooling units vehicles, but to manage vehicle impacts on the local hydrology and related pressure drawdown and process. The main use for water and setting goals for improving maintenance and fuel expenses natural environment both through our promote enhanced thermal energy in our manufacturing facility is for EFFORTS TO IMPROVE ENERGY the energy efficiency of our by creating a system of “Green commitments to various regulatory extraction from the heated rocks within testing the viability of our plants in EFFICIENCY manufacturing facilities. Scores” that rate the drivers in each requirements and in our environmental the reservoir. Importantly, reinjection the factory setting, wherein we use group according to their average action plans. Geothermal by-products also avoids by-products from emitted recycled water. We make concerted efforts to At our manufacturing facility mileage per gallon and the number and water impacts are managed by geothermal steam and the need for monitor and reduce our energy in Israel, we have initiated a of “unfavorable” events on the the power plant managers at our disposal of wastewater as well as visual • Exploration and drilling: Water is consumption. Most of these system for measuring energy road such as hard braking, hard operational sites, while the nature of impacts in the form of an emitted used in drilling activities to generate efforts are implemented at our consumption in different parts of acceleration, or speeding. their activities and initiatives is inspired plumes from the cooling process (as the mud that is necessary for drilling manufacturing facilities through the factory. Findings are analyzed by our commitment to minimizing discussed above). a geothermal well, for environmental measures such as switching to identify opportunities for In addition, Ormat’s drilling department environmental and health-related dust control and to maintain fluid for outdated equipment and machinery increasing energy efficiency. This works to improve optimization and impacts as detailed in our Integrated well control. The source of water used for newer models with better energy analysis led to an initiative to increase energy efficiency by replacing Quality, Environment, Health and MANAGEMENT OF WATER for drilling is different at each location efficiency and fuel consumption, reorganize working shifts so that aging semi-trucks with more efficient Safety Policy. RESOURCES IN OUR OPERATIONS and tanks are usually brought onto among other initiatives. Each the daylight hours are maximized, and safer vehicles. the drilling site. The water used meets We engage with water resources relevant regulatory and environmental MANAGEMENT OF THE from diverse sources to operate our requirements that are enforced as GEOTHERMAL RESOURCE AND ITS power plants, manufacturing facilities conditions of our drilling permits. BY-PRODUCTS and offices. As of 2018, we did not discover A key sustainability driver for We use water resources for various any negative impacts on the local geothermal power generation is the purposes, such as: hydrology in the vicinity of our power conservation and recycling of the plants and manufacturing facilities as a geothermal resources - steam and • Operation of our power plants: In our direct result from our operations.

The following table details the volume of water consumption according to its role in various aspects of our operations.

Use of Water Resource Total Volume (m3) in 2018

Air cooled power plant 2,397,553 Operation of power plant Water cooled power plant 12,234,145 Manufacturing renewable power plants in Ormat Manufacturing facilities 17,379 Drilling activities 43,527 Total water consumed 14,692,604

44 45 Impacts of Our Operations on the development and operations on environmental monitoring efforts, we Local Hydrology and Aquifers government-owned or naturally track the sources of withdrawal for Total Volume Country Plant or Location Source protected lands. These leases legally the water resources that we consume. Withdrawn (m3) We conduct the necessary studies require us to conduct operations in We consume water resources at our - including environmental impact a manner that minimizes impacts on operational sites mainly through assessments - to uncover and mitigate water and the geothermal resources. the local water utility, but in other Amatitlan Well water 2,074 any potentially negative impacts on local cases we consume groundwater and Guatemala hydrology and groundwater systems. As of 2018, our stakeholders did not well water resources. In very rare Zunil Water purchased from a third party 464 submit any material grievances or circumstances, we consume water Ormat has entered into geothermal concerns regarding the management resources directly from local water Guadeloupe Bouillante Bay of Bouillante 2,128 resources leases with government of water resources in the vicinity of our sources. However, our interaction entities, such as the Bureau of Land power plants. with such water sources is managed Honduras Planatares Bufa River 2,642 Management (BLM) in the U.S., entailing directly through our engagement Israel manufacturing facility and the right to conduct geothermal In addition, and as part of our with a local water utility. Israel Israel Water Authority 17,378 offices Lake Naivasha through the Lake Laivasha Kenya Olkaria III Complex 26,035 The following details the sources for various water resources used at our power plants and at our manufacturing Water Resource Authority sites in 2018. Turkey manufacturing facility and Turkey Izmir Water Company (IZSU) 0.3 offices Drilling 51 Total Volume operations Different locations worldwide Various sources 43,527 Country Plant or Location Source Withdrawn (m3) worldwide

Brady43 City of Reno 79

Don A. Campbell Complex Gabbs, Nevada 191 Colorado River through the Imperial Heber Complex44 6,618,908 Irrigation District Jersey Valley Battle Mountain 77 Mammoth Complex Mammoth Community Water District 64

McGinness Hills Complex Callahan Pond 761

Neal Hot Springs Groundwater and on-site water well 693 Colorado River through the Imperial Brawly Complex45 1,486,628 Irrigation District United States Colorado River through the Imperial Ormesa Complex46 4,128,610 Irrigation District

Raft River47 Groundwater and on-site water well 935,896

REG Power Plants Different sources48 0.076

Reno Offices City of Reno 3,649

San Emidio49 Groundwater and on-site water well 1,423,077

Steamboat Complex City of Reno 202

Tungsten Moutain Well water 58 Wilderness alongside our power plant

Tuscarora50 Spanish Springs Ranch 1,136

48 Each REG plant uses a small amount of water, none for plant operation, each plant purchases from its own local utility 43,44,45,46,47,49,50 Partially or fully water-cooled facility. 51 The drilling work frequently changes locations and we did not record the different water sources that were used. If there is drilling in an existing plant then typically the water comes from the local utility from which the plant purchases water but in new locations water is usually trucked in containers and brought to the drilling site. 46 47 MEASURING AND WASTE, MATERIAL MANAGEMENT health and safety guidelines and facilities – such as wood, metal and Ormat’s power plants are often waste that is disposed of through a AND RECYCLING Emergency Action plans, training of aluminum - is entirely sold to these made from reused or repurposed third-party contractor who transports CONTROLLING our personnel and employees on issues third parties for recycling, over 160 shipping containers that we purchase the waste to an authorized landfill. ENVIRONMENTAL We seek to responsibly manage our related to waste and the handling of tons in 2018. Furthermore, we aim from a variety of suppliers. Our waste and material streams and to materials and by keeping records of to reuse materials and equipment manufacturing facilities also generate IMPACTS: WASTE, reuse and reclaim as many materials our waste management efforts. ourselves. The control rooms in a certain degree of construction MANAGEMENT OF as possible in order to minimize our impact on the natural environment and We also have expectations of MATERIALS AND ensure the sustainability of our business our subcontractors for the sound The following table details the major categories of hazardous and non-hazardous waste that were generated at our over time. management of waste generated manufacturing facilities, offices and workshops in 2018, including details on how the waste products were disposed of BIODIVERSITY through their activities, which are set or treated. CONSERVATION Waste and material management out in our contractual agreements and is managed through our Integrated are outlined in our list of Environmental Quality, Environment, Health & Safety Compliance Responsibilities. For Waste Classification Ormat makes extensive efforts System Policy that outlines our instance, we require subcontractors that Category of Waste (Hazardous or Non- Disposal Method Weight (kilograms) to minimize and mitigate our commitments to standards such as perform work at our power plants to Hazardous) impacts on biodiversity and to ISO 14001 and relevant environmental participate in pre-work Safety Briefings manage our use of materials and health and safety standards for that detail the environmental and cultural General Waste Streams Non-Hazardous Landfill 500,240 and resulting waste generation the management of hazardous waste. resources to be protected in the context responsibly. Our VP of Quality, Health, Environment of the project, as well as expectations, and Safety oversees corporate-level such as the preparation of a Storm Metal Scrap (aluminum, Non-Hazardous Recycling 942,290 Ormat maintains a multi-year plan policies for the management of waste, Water Pollution Plan for the compliance chips, etc) for the continuous improvement materials and recycling. At the local of construction-related disturbances in of our environmental performance level, safe management of waste, response to storm events. Nylon/Plastic Waste Non-Hazardous Recycling 829,920 while constantly monitoring facility including hazardous waste, materials performance and reporting any and recycling efforts are managed incidents that may occur. In the on an ongoing basis by the plant WASTE AND MATERIAL Wood Non-Hazardous Recycling 720,359 context of the plan, we take into managers, who establish the relevant MANAGEMENT AT OUR consideration relevant legal and procedures for waste and material MANUFACTURING FACILITIES, regulatory requirements, which are management in order to comply with OFFICES AND WORKSHOPS Dichlorbenzene Hazardous Recycling 16,000 continually mapped and monitored local regulations. together with the standards set Our manufacturing facilities, offices and by various international operating workshops generate different types of Used Paint Containers Hazardous Authorized Disposal Methods 26,400 guidelines and frameworks, As such WASTE, MATERIAL MANAGEMENT hazardous and non-hazardous waste. and Paint Thinners we have implemented ISO 14001 at AND RECYCLING AT OUR FACILITIES When it comes to relevant types of our main manufacturing facility and AND POWER PLANTS hazardous waste, we dispose of the Used Oils Hazardous Authorized Disposal Methods 5,700 the standard is used as a guideline waste according to applicable local for our activities worldwide. In Waste management at our regulations. In terms of non-hazardous addition, we engage in thorough manufacturing facilities and power waste, we work to recycle, reuse and Lacquer Hazardous Authorized Disposal Methods52 1,000 dialogue with stakeholders, plants is managed through our repurpose as much of the waste and environmental NGOs and local material compliance with ISO 14001 materials as possible in order to increase communities to understand their and through the establishment of an our level of efficiency and minimize our Radiographic films Non-Hazardous Recycling 250 concerns regarding the natural Environmental Management System. impact on the environment. We provide environment and biodiversity In line with our commitments and our employees and subcontractors surrounding our facilities. We have expectations that are outlined in our with access to recycling receptacles Paper and Cardboard Non-Hazardous Recycling 501,712 established grievance mechanisms Integrated Quality, Environment, Health across our operational locations, and in most of the communities in our & Safety System Policy, every aspect of actively encourage the preservation of areas of operation, enabling the the waste management process must resources by promoting recycling and local population to directly submit be planned, implemented, measured, the responsible use of materials. any issues of concern regarding monitored and continuously improved waste management or biodiversity through strategic objectives. This Our manufacturing facilities, offices impacts directly to responsible includes properly handling, storing, and workshops generate different individuals. We attempt to address labelling, transporting and disposing types of waste, we aim to recycle any relevant such concerns in a of waste – namely hazardous waste as much as possible. Some waste timely and thorough manner. products or materials - through our generated at our manufacturing 52 “Authorized Disposal Methods” refers to authorized third parties that assist Ormat in disposing of certain types of hazardous waste according to relevant local regulations.

48 49 WASTE AND MATERIAL These are treated according to local Additional categories of waste Below are two examples licensed specialists for reuse and/ through the site’s environmental MANAGEMENT AT OUR POWER regulations governing storage and we dispose of and treat at these of how the topics of waste or recycling. Furthermore, as the impact auditing. The types of PLANTS disposal of these materials in the facilities include cardboard, power plant is located at a national materials that are used in drilling and material management park, regulations require Ormat to activities include, among others, relevant country of operation. fluorescent bulbs and batteries were addressed at two major At our various power plants, there that are recycled by third party clearly communicate and provide diesel fuel, lubricants, hydraulic are relevant local regulations A by-product of the utilization of contractors, as well as plastic construction sites in 2018: waste receptacles for visitors in the fluids, anti-freeze and drilling and requirements governing the geothermal resource is scale, which waste, which is collected and vicinity of the power plant. Solid chemicals (drilling mud, caustic At our power plant in management, disposal and storage of we are responsible for treating properly disposed of through Olkaria III waste is collected in accessible soda, barite, etc.), all of which are Kenya, we follow the Environmental waste,. In order to fulfill the objectives and disposing. Scale is commonly recycling, where possible. In waste receptacles and there is closely monitored and carefully Management and Coordination set out in our environmental action found to include calcium carbonate, general, our power plant managers clear separation of hazardous and transported in order to avoid the (Waste Management) Regulations plans and to fulfil relevant standards amorphous silica and silicates, and are encouraged to improve their non-hazardous waste types. As of risk of spills or leakages. As such that outline the legal requirements and regulations, we strictly adhere to mixed metal oxides and sulfides. waste management and treatment 2018, a number of corrective action (and as noted in the “Ensuring a for the segregation, transportation, and enforce these requirements at Ormat monitors the level of scale efforts based on the findings of recommendations were provided Safe & Healthy Work Environment – storage, treatment and disposal our sites under the supervision of the in our systems and if we are not the various environmental impact for improving waste management Occupational Health and Safety at of hazardous, non-hazardous and power plant manager. able to prevent the scale build-up assessments and according to the at the power plant. These Ormat” chapter of this report), the radioactive waste in the country. we have to remove and dispose of relevant regulations managing recommendations are currently site has an Emergency Action Plan Most waste generated at the In order to effectively operate our it. This disposal is in alignment with the disposal of hazardous and being implemented by developing that describes relevant emergency power plant is solid waste from the power plants, Ormat uses flammable regulatory requirements and our non-hazardous waste in their a waste management plan that action events, how to detect them offices, kitchens and maintenance materials, including industrial Company-wide expectations for country of operation. incorporates enhancement of and what the appropriate actions workshops and from infrastructure lubricants and organic motive fluids. sound environmental management. waste segregation at the source, are to address the event. In the maintenance activities in the collection and treatment of waste event of a major spill or release geothermal field. and provision of more advanced of hazardous chemicals, Ormat The following table details the types of hazardous and non-hazardous waste that were generated at our power plants collection methods that suit the personnel are trained to identify a During 2018, we refurbished one in 2018 and how the waste products and materials were disposed of or treated: needs of the plant. spill and to contact the appropriate of the plants in the complex, which contractor to clean and treat the included the decommissioning of At our McGinness Hills power spill. Furthermore, Ormat must old units – the final stage of a plant’s plant in Nevada, the hazardous implement certain measures Waste Classification Weight lifecycle. This created a significant and non-hazardous waste streams regarding the storage of necessary Type of Waste (Hazardous or Non- Disposal Method (kilograms)53 amount of scrap metal and waste generated in the operation of hazardous materials onsite, such Hazardous) compared to previous years, the plant and in drilling activities as secondary containment and Used Oils, Petroleum Solids, Oily but all scrap metal was removed (as part of expansion of the classifying the level of anticipated Landfill, Recycling, Recovery & Rags, Pads, Used Filters and Hazardous54 3,284,469 from the site by government project) are closely monitored risk from each type of waste. Reuse55 Other Oil Contaminated Products

Hazardous & Non- Motive Fluid56 Authorized disposal methods 984,744 Hazardous

Metal, Scrap Metal, Aluminum, Non-Hazardous Landfill & Recycling 119,550 Carbon Steel

General Waste Streams Non-Hazardous Landfill 81,000

Wood Non-Hazardous Landfill, Recycling, Reuse 5,700

Paper and Cardboard Non-Hazardous Landfill & Recycling57 569

Construction of the latest 53 Some of the weights of the waste provided are estimated based on data received from our operational sites. plant in the Olkaria III complex 54 The classification of hazardous waste depends on the location of the operations and the legal or environmental regulations that govern the topic in that country and/or locality. Therefore, waste is indicated as ‘Hazardous’ when it is considered as such in at least one of the locations of operation included in the scope of this report. 55 The disposal methods for the oils and solids varies depending on the country of operation. For instance, in Kenya, the oil is reused and repurposed after it is collected by government licensed professionals that collect the oil and treat it accordingly. In Guatemala, the oil is recycled for reuse in the power plant maintenance facilities. 56 The categorization of ‘hazardous’ and ‘non-hazardous’ in the context of motive fluids depends on the nature of local regulations that govern the topic. The majority of the hazardous waste classifications pertain to state-level waste and by product regulations that govern the nature of our operations in the state of California. 57 The waste is disposed of by different methods in different locations, either landfill or recycling. However, Ormat works to encourage the sites to dispose of paper and cardboard materials through recycling programs, where available. Indeed, in 2018, the majority of paper and cardboard waste was recycled, approximately 70 percent.

50 51 intensive geologic and hydrologic that has significantly reduced Though we conduct ESIAs for Geothermal pipelines designed to BIODIVERSITY studies that we conduct during the energy consumption and the level of each of the power plants that accommodate wildlife exploration and drilling phases. In impact on the natural environment we construct, own and those some cases, Ormat is required to surrounding our facilities. for which we have turn-key conduct additional studies regarding Our renewable energy solutions potential impacts on the natural contracts, below we present are derived from nature itself, environment as part of its land and ENVIRONMENTAL IMPACT a detailed description of the and as a result we place utmost mineral rights lease agreements. ASSESSMENTS AND impact assessments and action significance on assessing the ENVIRONMENTAL AUDITS plans that we generated for our potential impacts on the local During the construction phase, fully-owned plants in 2018. biodiversity and the natural we require the site manager and At each of the sites where Ormat and cultural environments construction team to fulfil a list of decides to construct a power plant, surrounding our power plants. specified environmental compliance we conduct environmental and Kenya – Olkaria III Power Plant Maintaining the natural responsibilities regarding biodiversity social impact assessments (ESIAs) or biodiversity around our plants preservation at various stages of regular environmental audits of our Our Olkaria III power plant was is important to a number of our the construction process. These activities as required by relevant and built in stages, starting with a 13 key stakeholder groups, such as responsibilities vary from site to site, local regulatory requirements. MW plant in 2000 and has grown local communities, environmental but in general include: attending a pre- every few years since then, adding NGOs and financing bodies, construction meeting with Ormat to Impacts analyzed in the context 11 MW in the refurbishment of the among others. Accordingly, review the environmental management of the environmental and social first unit in 2018. The plant has we strive to design our power expectations; preparation of impact assessments are classified as now reached a total generation generation facilities to blend into emergency response plans with those related to ecology and nature capacity of 150 MW. The plant the surrounding landscape, taking contingencies for hazardous material conservation, landscape and visual is located in Hells Gate National into consideration the actual spills and disposal; monitoring of dust impacts, traffic and transport, noise, Park, a national park managed by birds and insects, such as the rare animals or plants will be introduced, physical location of each facility, conditions on site during construction; socio-economic impacts, health, the Kenya Wildlife Service and Lammergeyer,60 Griffon vulture,61 and that all rules and regulations of the the configuration of units that are ensuring the proper storage of waste; safety and public nuisance, ground, categorized as an International the magnificent Verreaux’s Black Park will be followed and that local used to build it, landscaping, and recontouring of impacted areas water and air emissions, archaeology Union for Conservation of Nature Eagle,62 among others. Extensive trees will be planted (with preference the surrounding natural habitat, to match the surrounding terrain; and cultural heritage, electric and (IUCN) Category II national park58 wildlife censuses are conducted for the Tarchonanthus camphoratus among other elements. providing a buffer around eligible and magnetic fields and electromagnetic and a tentative UNESCO World biennially in the area around the species) in order to enhance the unevaluated cultural sites that are interference. Identified impacts are Heritage site. Furthermore, the plant in order to properly observe natural features of the Park. In 2018 close to project activities; salvaging managed and mitigated by Ormat in geothermal field is located in and manage any changes to the local an agroforestry tree nursery was MAINTAINING THE NATURAL and stockpiling soils for use later in the accordance with best practices. The close proximity to Lake Naivasha biodiversity. Each of the species are established within the plant to provide ENVIRONMENT IN THE construction process; and ensuring that measures adopted include informing and local flower-growing farms, mapped, counted and categorized seedlings to the locals for planting CONSTRUCTION AND OPERATION there is no use of construction paint on the local population in a timely all of which raised concerns according to their proximity to the during the rainy seasons. The nursey OF OUR POWER PLANTS the natural surface. manner about construction activities regarding the environmental site and the probability of their is managed by employees from the and repairing any damage to local impact of our operations. natural habitats being affected. The local community. Before we develop a new facility, In addition, ongoing research into access roads, as well as restoring any majority of the changes identified in we create a detailed environmental new equipment helps minimize disturbed lands. An environmental impact assessment wildlife and mammalian behavior in The environmental audit also plan to minimize impacts to the the environmental impacts from was conducted in order to answer the environmental audit, which was examines aspects of noise pollution surrounding natural lands and wildlife the operation of our facilities. For Our local site management team is requests from stakeholders such as conducted in 2018, were found to be that may arise from construction ecosystems. Our aim is to control and example, several facilities have been usually tasked with developing and funding bodies and in order to comply due to changes in breeding behavior activities and in the operation of reduce the level of disruption to the reconfigured to accommodate larger implementing an environmental action with local Kenyan regulations.59 due to climatic factors, and not due to the power plant. Noise pollution surrounding natural environment in pumps that can more efficiently or management plan that addresses The ESIAs were initiated beginning Ormat’s own activities. may impact various stakeholders the development of the plant. Our extract and process fluids from the actual and potential impacts on with the first plant, and have been in the local community, such as the care for the environment around our geothermal reservoirs. This, in turn, an ongoing basis for regulators and/ updated with the addition of each Ormat entered into an environmental workforce, Olkaria III and Hells Gate plants extends to the operation and may reduce the number of wells or the local community. additional stage, following the management agreement with the National Park visitors, wildlife and maintenance phases of their lifecycle, that are required to properly exploit relevant environmental guidelines. Kenyan Wildlife Service (KWS) to members of the local community. keeping in mind our commitment to a geothermal reservoir, thereby These assessments analyze the effectively manage environmental The results of the study found minimizing operational costs without reducing our overall land use while following aspects: ecology; geology resources in the Park and to that there is some noise from compromising on meeting the highest simultaneously enhancing overall and soils; hydrology, hydrogeology enhance conversation activities. The arising from Ormat’s activities safety and environmental standards. facility operational capacity. The and water resources; flora and agreement, requires that all installed that is audible to the surrounding Furthermore, we seek to maintain installation of more efficient, air- fauna; and social aspects. Hells Gate infrastructure will not obstruct communities and, as a result, the sustainable characteristics of cooling equipment in angled positions National Park is home to a variety wildlife movements, breeding or Olkaria III implements proactive geothermal resources through the is another compelling improvement of wildlife and many species of migratory patterns, that no exotic noise monitoring measures.

58 International Union for Conservation of Nature (IUCN) Category II national park refers to large protected areas that play a role in the connectivity of the landscape or 60 The Lammergeyer is listed as an IUCN “Near Threatened” species. seascape in that they are the home to large ecological processes and are complemented with species and ecosystems that are characteristic of the natural area. 61 The Griffon vulture is listed as an IUCN “Least Concern” species. 59 Relevant local Kenyan government regulations include: the Environmental Management and Coordination Act (EMCA) (1999), Regulation 31 of the Environmental 62 The Verreaux’s Black Eagle is listed as an IUCN “Least Concern” species. 52 (Impact Assessment and Audit) Regulations (2003) and the Kenyan National Biodiversity Strategy and Action Plan (2000). 53 United States - McGinness Hills EIAS AT OUR EXISTING POWER potential negative impacts are of generators to repower or Power Plant PLANTS IN GUATEMALA addressed. Every year, the plant’s sustain operation of the plants. level of compliance with certain Furthermore, no impacts on Our McGinness Hills geothermal Requests for environmental impact environmental requirements is local wildlife or vegetation were power plant site is located in assessments and audits at our Zunil measured and reported addressing identified in the context of the Nevada and is leased through and Amatitlan power plants in factors such as: monitoring of impact assessments. the U.S. BLM. As such, Ormat is Guatemala arise from requirements noise pollution and acoustic required to conduct environmental from relevant departments in the levels, monitoring of air quality At Ormat’s power plant in impact assessments, which are national government, such as the for particulate matter, combustion Amatitlan, the staff hosts an submitted for public comment Ministry of the Environment and gases and water quality. annual reforestation program from relevant stakeholders. As Natural Resources (MARN), but also for local school children. In 2018, part of the approval process for from the requests from the local In the on-going operations the school children planted geothermal resource development community and Ormat’s policy of of our power plants in Zunil a total of 16,000 trees in the permits, Ormat has committed high environmental standards.64 and Amatitlan in 2018, no Parque Nacional Volcán de to a number of environmental Therefore, Ormat reports on an noise pollution complaints Pacaya y Laguna de Calderas. protection measures to prevent annual basis on the environmental were received from the local Nearly fourteen local schools unnecessary or undue degradation performance and impact of our community. However, some participated in the effort that of the natural environment during Zunil and Amatitlan power plants members of the local community helped raise awareness for the the construction, operation and through detailed environmental filed complaints regarding noise importance of environmental reclamation phases. Requirements reports, which are paired with in the case of an emergency conservation and cultivation in that Ormat must fulfill include: action plans, to ensure that any or an outage due to the use the local community. coordination of Wildlife Working Group meetings that examine how impacts on wildlife and their habitat are mitigated in the area around the plant; development of a Bird and Bat Conservation Strategy (BBCS); development of an Integrated Weed Management Plan for the entire project area, which includes ensuring the use of materials that are free of intrusive Sage Grouse weed species; controlling surface- disturbance activities that could affect the local sage grouse breeding grounds; measurement and control of project noise levels including installation of sound and painting of the power plant which provides a framework for dampening barriers to reduce equipment to blend in with the evaluating and addressing specific noise emissions; installation of anti- natural landscape. impacts regarding the greater perch devices and construction of sage-grouse. The Plan includes transmission lines in accordance One of the main biodiversity triggers and thresholds for with Avian Power Line Interaction factors we identified at the determining when management Committee (APLIC)63 guidelines McGinness Hills site is the changes are needed and (2006 and 2012); instruction existence of native greater stipulations regarding activities for contractors and employees sage-grouse populations. The during the greater sage-grouse to avoid the harassment and greater sage-grouse inhabits a breeding times. In addition, and as disturbance of wildlife, namely limited geographic range in the part of the Adaptive Management during the greater sage grouse American Northwest and Canada Plan, Ormat must implement a breeding season; power washing of and has been characterized as a common raven monitoring plan to various equipment to prevent the “Near Threatened” species by the assess changes in raven numbers introduction of invasive species; IUCN. As such, Ormat developed due to development and human revegetation of various species an Adaptive Management Plan activities associated with the according to the BLM’s guidelines; for the McGinness Hills project, power plant.

63 “Avian Power Line Interaction Committee” leads the electric utility industry in protecting avian resources while enhancing reliable energy delivery. 64 Per resolution number 156-2002-AB/ADB.

54 55 CHAPTER V. OUR IMPACT AND ENGAGEMENT WITH OUR EMPLOYEES, SOCIETY & LOCAL COMMUNITIES

Ormat safety coordinator at a safety checkup

56 57 OUR PEOPLE: encourage our employees to or questions regarding to ethical Below is a breakdown of Ormat’s employees per country and employment type at year-end 2018. support our mission of generating conduct in the workplace to our EMPLOYMENT positive social and environmental whistleblower ethics hotline or AND SKILL value. These principles are central to third-party managed website at Location Number of Percentage of Total Of Which Of Which our model of labor and employment www.ethicspoint.com. Employees Employees Permanent Temporary DEVELOPMENT and we look to hire individuals who United States 584 43% 577 7 AT ORMAT express a keen understanding, and exhibit a personal example of our OUR EMPLOYMENT FRAMEWORK Israel 556 41% 545 11 values in their work. We rely as much as possible on our Kenya 58 4% 58 0 Ormat is a global organization Many aspects of our outlook own employees for all aspects of with employees working across towards employment are managed conducting our business. We use Honduras 45 3% 45 0 the world. As of the end of 2018, through our Human Rights and our own employees to design, we employed some 1,350 full and Labor Policy that puts into writing manufacture and operate our Guatemala 54 4% 54 0 part-time employees worldwide. We Ormat’s employment values.In the power plants. Most employees are an equal opportunity employer policy, we recognize our employees’ work with us full-time, with Turkey 23 2% 23 0 and are committed to creating and rights to the freedom of association some part-time functions maintaining a workplace where our and collective bargaining, all depending on specific business Guadeloupe 26 2% 20 6 people feel motivated to give their relevant and essential employment needs, professional functions or all and realize their professional rights in our countries of operation, on employee abilities. We work TOTAL 1,346 100% 1,322 24 and personal goals. As such, Ormat their rights to a workplace free of to accommodate our employees relies on employee input, ideas and harassment and discrimination in with both full and part-time enthusiasm to create authentic, all forms and our commitments to positions based on their personal, relevant methods of engagement eliminating human rights abuses professional or academic needs. and to enable our Company to work such as child and forced labor In addition, the vast majority more proactively, safely and in tune practices. In addition, our Code of our employees – 98 percent Equality in Employment at Ormat employment journey with us. This significant number of employees with the local communities in which of Business Conduct and Ethics - work with us on a permanent includes eliminating discrimination who are age 51 and older as well we operate. outlines our additional commitments and on-going basis, with a very Ormat’s employees are diverse. They in our hiring and employment as 30 and younger. As an equal to our employees regarding equal limited number of positions are of varying ages, genders, and termination practices and ensuring opportunity employer, we do not Ormat believes that employees have employment opportunity and anti- being filled by temporary cultural or religious backgrounds. that all employees are adequately discriminate against employees on the right to a workplace that is fair, harassment, and our ethical and employees. Our subcontractors Through our organizational values accommodated and treated equally. the basis of their age. As outlined open and free from discrimination behavioral expectations of them are mainly employed for the and the frameworks, policies and in the section below, we afford all or harassment and that encourages in the workplace context. Ormat’s completion of specific projects directives that guide our human We work to ensure that our of our employees full retirement engagement and the development executive management, Human or tasks, information technology resources and employment practices, employees come from diverse benefits according to the relevant of employee potential. We strive Resources department and the local (IT) and maintenance work and we express our commitment to age groups. The majority of our conditions of employment in the to hire a diverse workforce that employment managers at each of our to address other professional treating every employee fairly employees are between the ages country of operation. includes individuals from all sectors operational sites ensure that these capacities, as needed. and equitably throughout their of 31-50, but we also have a of society. In addition, due to our policies and their relevant conditions vertically integrated business are upheld in our dealings with model, we work with employees employees, and that our employees Below is a breakdown of Ormat’s employees per age, sex, and employment type at year-end 2018. with an array of professional skills fully understand and comply with and capabilities and do our best our expectations. Employees with to accommodate their professional grievances regarding management Total number of employees (by Total number of employees (by and personal growth within the of the issue of employment can employment contract and gender) YE 2018 employment type and gender) YE 2018 Company, taking into account their report to their direct manager, the Permanent Temporary Full Time Part Time unique characteristics. Human Resources department, the Secretary of the Corporation Male Female Male Female Male Female Male Female Despite Ormat’s diverse workforce or the relevant Code of Ethics 30 or younger 169 24 14 3 180 26 3 1 in terms of their geographic spread contact person. In addition, and and professional capabilities, we as outlined in the “Our Holistic 31-50 628 120 3 1 628 116 3 4 encourage integration and a sense of Approach to Corporate Governance togetherness among our employees. and Economic Management” 51 or older 314 67 1 2 306 64 9 5 We cultivate a transparent and section of this report, employees diverse work environment and can submit any relevant grievances Total 1,111 211 18 6 1,114 206 15 10

58 59 Total number of employees (by employment Total number of employees (by employment Below is a breakdown of Ormat’s employees who ended employment during 2018, categorized by age and gender, in contract and gender) hired in 2018 type and gender) hired in 2018 addition to a breakdown by employment type: Permanent Temporary Full Time Part Time Male Female Male Female Male Female Male Female Total number of employees (by employment Total number of employees (by employment contract and gender) end employment in 2018 type and gender) end employment in 2018 30 or younger 48 8 19 2 67 10 0 0 Permanent Temporary Full Time Part Time 31-50 101 21 2 1 103 22 0 0 Male Female Male Female Male Female Male Female

51 or older 33 9 1 2 34 9 0 2 30 or younger 28 3 31 3 57 5 2 1

Total 182 38 22 6 204 41 0 2 31-50 79 12 4 0 83 11 0 1

51 or older 47 14 2 0 45 14 4 0

Total 154 29 37 3 185 30 6 2

Furthermore, as an equal sites. We have not set organizational providing these employees with opportunity employer, all qualified goals for the number of women and their rights and benefits. The applicants for employment with minorities working at our organization. Company adheres to all relevant Ormat receive consideration for However, Ormat adheres to all relevant legal obligations according to employment without regard to legal frameworks governing equality the relevant country of operation Subcontractors collective bargaining agreements. contribution in the relevant country race, sex, age, color, religion, marital in employment, such as through the where the employee is ending their As of December 2018, two percent of operation, including access to status, sexual orientation, gender Affirmative Action directives issued by employment or retiring. While the majority of our activities of Ormat’s employees were covered 401(k)65 pension schemes in the U.S., identity, veteran status, status the U.S. Department of Labor through are carried out by our permanent by collective bargaining agreements, and parental leave according to the with regard to public assistance, which we seek to hire individuals from and temporary employees, we namely the employees of our allotted time period in each country. source of income, national origin, underrepresented and/or minority work with subcontractors for some Bouillante power plant in Guadeloupe, Some examples of the additional citizenship status, disability, or any groups. That said, it is important to manufacturing activities and for where employees are represented by benefits that Ormat provides to protected status. stress that Ormat first and foremost construction activities, which allows the national union, the Confédération employees include: health and considers a potential candidate’s us to expand our construction and Générale du Travail de Guadeloupe. dental insurance, disability coverage, Ormat’s hiring processes are professional skills and their overall development capacity on an as- We have never experienced a major additional vacation days and other managed and designed by the qualifications for the position, and needed basis. In the construction labor dispute, strike or work stoppage. benefits beyond local employment Company’s Human Resources only then hires the most qualified or expansion of our power plants, We consider our relations with our laws. Ormat affords these benefits team. The team considers new candidate for the said position. This we work with subcontractors employees to be one of our success to its permanent full and part-time employees according to their is in line with our commitment to on a temporary, yet mainly full- factors, and to be beyond satisfactory. employees. professional capabilities and complete professionalism paired with time basis for the completion of We believe that our future success experience and in terms of their zero tolerance for discrimination in implementation-based projects depends on our continued ability to Some of the other benefits that fit with the relevant position. In the workplace. at various operational locations. hire, integrate and retain qualified are afforded to our employees at addition, the team considers the These subcontractors usually personnel everywhere we operate. a number of our operations sites employees’ fit in Ormat’s culture, Ormat offers equitable and fulfill various roles such as site include: access to educational such as with our workplace values, competitive pay and benefits, grading, road construction, civil, Employee Benefits funds, transportation fees, ethical and behavioral expectations health insurance and retirement mechanical and electrical work, housing subsidies, optical care, according to the Company’s Code savings plans to all of our among others. Aside from plant Ormat knows that the success of compassionate leave (during of Business Conduct and Ethics, employees. We also offer a construction and expansion, our business depends on employee mourning periods), birthday, and personal and professional wide variety of professional additional subcontractor roles satisfaction and stability. We family gifts and stipends, laundry goals regarding the opportunity development opportunities mainly include: provision of therefore strive to make our working services, and more depending on to work at Ormat. Employment designed to help individuals excel security services, sourcing and environment a place that employees the local needs in the country and with Ormat is based solely on the at their current responsibilities supply chain, and cleaning and site will choose to stay. We ensure this relevant requests from employees. Company’s requirements and the and to advance in their careers. maintenance staff. by providing competitive benefits, individual’s qualifications. growth opportunities and a warm Performance Reviews In unfortunate cases of employment Collective Bargaining Agreements and positive work atmosphere. All of Ormat strives for equal employment termination, end of employment, our global employees are entitled to As part of our commitment to opportunities for women and for or retirement, Ormat has an The vast majority of Ormat’s retirement and pension benefits at providing our employees with a better minorities at all of its operational organized framework in place for employees are not covered by or beyond the legal level of employer employment experience possible, we

65 In the United States, a 401(k) plan is the tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code.

60 61 invest significant time and resources Frameworks for Employee channels to express their TRAINING AND EDUCATIONAL pursuit of educational opportunities is spread out in the organization. in our program for performance Engagement and Promoting Well- expectations, grievances or OPPORTUNITIES FOR OUR through a variety of country-based Health and Safety training is reviews. As of 2018, nearly 85 percent Being in the Workplace recommendations for improvement, EMPLOYEES programs and based on specific managed by the QEHS department, of our employees received career beginning with their direct manager employee and business. guided by the VP QEHS and carried performance reviews. With such a large base of employees, and on to their Human Resources Ormat is committed to supporting out by employees in each location. we seek to encourage a sense of representative and through to our the professional development of our We provide of our employees with Other training is professionally Through career performance community and togetherness among CEO. We laso have an employee employees during their employment access to health and safety training, and administratively managed by reviews, which occur on an our employees. There are a number newsletter and in 2019 we are with us as well as to preparing corporate governance training the HR department (and it’s local annual or biennial basis between of ways that we achieve this, be planning to release our intra- them for career growth. As such, mainly regarding compliance with representatives) but is initiated by the employee and their direct it through community events and organizational communication we offer a variety of training and our Code of Conduct and Business different bodies such as department manager (depending on the employee gatherings, or through platform “OrMeet” that will allow educational programs for our staff Ethics, training in soft skills such managers. nature of the position), employees our employee portals, social media employees to create professional on both relevant professional and as the use of Office programs and are able to provide their feedback networks and on-line platforms. All of and personal groups to share soft skills to help them improve their languages, as well as relevant on their position, share their our well-being activities for employees experience, insights and support. performance. We also support our professional skills. career goals and receive feedback are sponsored or initiated by the The goal of the application is to employees and their families in the Direct management of training from their direct managers on employees themselves. For instance, create an additional platform that their performance. Together, due to requests from employees we encourages bonding between the employee and the manager began a Weight Watchers program employees across geographies and set goals and milestones for and Company-sponsored running professional capacities. In addition, assessing future performance groups. In Israel, we sponsor summer our CEO tours regularly the factory and the employee can request a camps and activities for employees’ floor and other sites to receive salary review, if desired. children, as well as festive holiday feedback and recommendations for events. In the U.S., we have an annual improvement from employees. In Our goal for 2019 is for all party for employees and other everything that we do, we seek to of our global employees to Company leisure activities such as encourage our employees’ utmost undergo performance reviews – Company picnics and family events. health and well-being both in and a measure that will be overseen outside of the workplace. and monitored by our Human Our employees have a number of Resources department. readily available communication

Employees in our offices and manufacturing facility in Isarel at a Training at Ormat Company event

62 63 The following outlines some of the professional and soft skills training courses that we provide our employees Providing Our Employees with local force is important in fostering Guatemala have agreements whereby with. It is important to note that we provide all of our employees with access to educational opportunities and Educational Opportunities knowledge regarding renewable employees work in time-set “shifts” courses that are relevant to their profession on a case-by-case basis: energy solutions, with the goal of for a few months before other local The professional and educational ensuring the long-term sustainability employees assume the position. development assistance we offer of our power plants and energy This method increases the rate of varies from in-house training courses solutions. Furthermore, we believe local employment and the degree of Type of Training Relevant Courses to subsidies for higher education that investment in the local workforce Ormat’s economic impact on local Operator Qualification Program programs through our educational supports the local economy and communities. funds, covering a range of topics or skills enables community development in Mechanic Qualification Program depending on individual needs and that Ormat’s local employees become This is the case not only in the Electrical Instrumentation & Controls Qualification Program aptitudes. We believe that by investing part of a larger global organization developing countries within which in employee skill development through and learn skills that contribute to their Ormat operates, but also in the U.S., Crane Operation Course provision of educational assistance professional career and personal goals. where Ormat has operations in areas First Aid we can meet our strategic business with traditionally high unemployment Health & Safety targets while adequately preparing In countries like Kenya, Guatemala, rates. Therefore, we not only hire Work at Height Courses and Certifications our employees for a rapidly evolving Honduras and Guadeloupe where qualified local staff where available, Safety Officer Competency professional environment. local employment options are limited, but also invest in creating Ormat offers our employees access opportunities for qualified local staff. Emergency and Fire Safety Preparedness Courses An Organization Shaped by Local to different professional employment For example, Ormat has power plants Safety in the Operation of Mechanical Equipment Employment opportunities such as plant managers, in the Imperial Valley, a region that local sustainability managers, power has one of the highest unemployment Driving Safety Courses Ormat is an organization that prides plant operators, maintenance workers, rates in the state of California, and Ormat's Code of Conduct and Business Ethics itself on full local employment at all engineers, mechanics and more. our local employment policy there levels at our power plants around Individuals that are hired for these has made Ormat the region’s second Time Management the world. In 2018, the proportion of positions are hired by the local Human largest employer. In addition, as senior management hired from the Resources manager based on their outlined above, we provide all of our Project Management local communities in our plants was relevant experience, knowledge and employees with access to educational Corporate Governance & 100 percent.66 education. In some locations where opportunities. Furthermore, Ormat Negotiation Skills We believe that local Human Resources employment is essential because our employment options are limited in the has written curricula for local Leadership Training employees have better understanding areas surrounding the power plant – community colleges and universities of the local community, stakeholders such as in Guatemala – our plants have in Nevada focusing on technical Team Building and environment and can adequately agreements with local community subjects such as plant operation and provide the superb degree of service councils and representatives to create relevant academic subjects such as Anti-Bribery and Corruption that Ormat strives for. In addition, we more local job opportunities. As such, geoscience, generating a talented Solar and Storage Course believe that cultivating the skills of the both the Amatitlan and Zunil plants in local employment pool.

American Society of Mechanical Engineers Course

Welding Course

Calibration Course

Wage Assessment and Accounting Certification Course

ISO CAT 111, ISO 45001, ISO 14001 Professional & Technical Training Technical Sketching for production workers

Exploration and Development of Geothermal Resources

Information System Security Certification Ormat team at Zunil power plant Import/Export Training in Guatemala

Inventory and Warehouse Management

Procurement Best Practices

66 'Senior management' is defined as employees who manage operations and implementation of our projects and business targets at our power plants and in our offices. 'Local' is defined as the immediate communities surrounding our operations. 'Significant locations of operation' are those operational locations that are included in the Boundaries of this report, as defined in the "Information Boundaries of This Report" section. 64 65 ENSURING most efficient and profitable goal is to learn and improve our Ormat’s website67 and outlines performance of our power plants performance following every event our commitments to providing A SAFE AND can only be achieved by fostering in order to reduce the number high quality products, conducting HEALTHY WORK a safe and healthy working of incidents. This requires that our business with care for the environment. First and foremost, all employees maintain constant environment and for integrating ENVIRONMENT – we follow the relevant health and vigilance to ensure that unsafe acts our QEHS system into our business OCCUPATIONAL safety rules and work regulations at or work conditions are identified, strategy and work processes. each of our operational locations, addressed, regulated and prevented, In addition, our Human Rights HEALTH AND but we also go beyond compliance wherever possible. and Labor Policy, which is also at the corporate level to ensure available publicly on our website68, SAFETY AT ORMAT that the appropriate policies The topic of Quality, Environment, outlines our commitments to and initiatives are implemented Health and Safety (QEHS) is ensuring that essential health and The health and safety of our wherever we operate. The goal managed by Ormat’s appointed safety standards and practices employees, subcontractors, the of these efforts is to create an Global VP of QEHS, who reports are enforced in the workplace, public and the environment is an overall culture of safety for all directly to the CEO. The Global VP to developing risk awareness overarching priority at Ormat. of Ormat’s employees at all of of QEHS is responsible for oversight and to encouraging responsible We manage risks by identifying, our locations. This includes the and management of the health and health and safety behavior assessing and controlling risks in initiation of a compensation and safety budget and relevant policies, among employees. The policy every facility, office and workplace incentive program for managers processes, training and work was updated in 2018 to add more that we own and operate. We that considers the implementation practices across the organization. comprehensive information on promote safety awareness and of health and safety initiatives as Plant managers at each of Ormat’s our health and safety policies, values and our goal is to report, a factor in evaluating performance operational sites and power plants initiatives and expectations, such analyze, learn and improve and as a condition for receiving are accountable for implementing as our full commitment to meet and performance following every event bonuses. In addition, we have relevant Company-level and local go beyond all legal and regulatory in order to reduce the number an advanced online platform for health and safety regulations and health and safety requirements of incidents. We also work to recording, reporting and tracking initiatives through the appointed in our countries of operation continuously improve our safety safety and environmental incidents Environmental Health and Safety and information on the industry performance and to instill a strong at our power plants and operational (EHS) coordinator. On-site EHS standards that we adhere to. workplace safety culture. The sites. coordinators are additionally countries where Ormat operates responsible for upholding the local Ormat’s employees have have local laws regulating the Ormat’s occupational health and conditions, regulations or other representation on the Company’s topics of health and safety that safety program is focused on four agreements, for ongoing record- health and safety committees. the Company follows, and where main components: keeping and reporting and for Ormat has two types of safety possible and practical, we strive the training and certification of committees: one for the to go beyond the requirements of 1. Everyone, Everyday - All Ormat employees. These EHS coordinators management of health and safety the legal regulations to promote employees are integral to safe report to the plant and/or power aspects at our factories and the utmost level of health and operations, each charged with the plant manager and conduct work manufacturing facilities and one safety for our employees and responsibility to work safely and according to Company-wide EHS for the management of health and other relevant stakeholders. These create and maintain a safe work initiatives that are set by the Global safety aspects in other operations, include safety requirements such environment. VP QEHS. i.e. at Ormat’s power plants and as ventilation, fire protection, work offices. The committees organize at height regulations, personal 2. Management of Hazards - Ormat Ormat has an Integrated Quality, and assess Ormat’s health and protection and gear, railings, strives to systematically identify Environment, Health and Safety safety program at the corporate electric protection and employee hazards, and then manage them by Policy that sets out our general level. An employee from each training on pertinent issues, among elimination, isolation or minimization. commitments towards health and department is nominated to other topics that are outlined in safety principles at our sites and participate in the committees the following chapter. 3. Safety as a Core Value - for all our stakeholders. The policy and employees from all Ormat’s Safety is a core value at Ormat. is enforced by the Company’s global locations are encouraged We are always committed to Global VP QEHS and adherence to volunteer their participation. Our Occupational Health and Safety Working safely at Ormat’s power safeguarding employees and with the policy, or the need for In order to expand employee Program – Striving to Go Beyond plants Compliance assets, customers, the community relevant revisions, is consistently involvement, the employee and the environment. monitored and assessed together representatives are rotated each Safety is a key area of concern to with Company management. The year. Overall in 2018 17 percent of us. We believe that the optimal, 4. Continual Vigilance - Our policy is publicly available on Ormat’s employees took part in

67 https://www.ormat.com/Warehouse/userUploadFiles/Image/Ormat%20Intergrated%20Quality%20Enviornmet%20Health%20and%20Safety%20(QEHS)%20Policy.pdf 68 https://www.ormat.com/Warehouse/userUploadFiles/Image/Ormat%20Human%20Rights%20Policy.pdf 66 67 the safety committees. Whether comprehensive safety plans are which contributes greatly to The following table details Ormat's performance with regards to accepted workplace health and safety indicators in 2018: participating as an employee maintained across all Company maturing and advancing a culture representative or not, all of Ormat’s operations. We provide regular of safety at our organization. employees are encouraged to training in health and safety Parameter70 Female Male All communicate their concerns or regulations and procedures Measuring Our Health and Safety recommendations to the relevant at all our locations and have Performance Injury Rate71 0 3.65 2.80 committees. In 2018, we received detailed guidelines in place in Occupational over four thousand health and case of emergency to monitor Ormat reports its health and 0 0.28 0.20 safety observations and hundreds health and safety standards on a safety data to the Bureau of Labor Disease Rate72 of safety suggestions from our continual basis. Statistics (BLS), which is part of Lost Day Rate73 0 2.30 2.00 employees through our health the U.S. Department of Labor, and safety management platform In 2018, we provided plant according to internationally- Absentee Rate74 This parameter was not calculated in the scope of this report (detailed below). managers and supervisors Safety accepted reporting standards Leadership Training, also known as such the Occupational Safety and Work-Related 0 0 0 Furthermore, every Ormat the ProAct safety training program. Health Administration's (OSHA)69 Fatalities75 facility has a safety training In 2019, we plan to continue this forms for recording work-related program, under responsibility of training program, as well as to injuries and illnesses. Ormat's each plant manager and the local expand employee participation in manufacturing and office facilities the EHS manager, and which is our SafeStart® health and safety in Israel operate in all material directed by our Company’s joint training and implementation respects according to OHSAS In 2018, we recorded the following injuries at our operational sites employee and management program, including integration 18001, but the facilities do not health and safety committees. of the SafeStart® philosophies have certification from the local The program seeks to ensure and practices into our health and Standards Institute of Israel. Type of Injury Number of Occurrences that safety expectations are safety key performance indicators clearly communicated and (KPIs). In addition, we increased Laceration 7 understood by all employees employee participation in our and subcontractors, and that behavior-based safety programs, Contusion 7

Strain 7

Heat Stress 3

Sprain 3

Broken Bone(s) 3

Eye Injury 2

Puncture Wound 2

Burn 2

Amputation 1

Ormat works to ensure that all of Ormat conducts Quality, Ormat manages and monitors our its employees who unfortunately Environment, Health and QEHS performance at a global experience an injury, illness or Safety audits of our plants and level for all sites using Microsoft’s fatality as a result of their work for facilities every three years. Power BI platform. All reports the Company receive the utmost In 2018, internal audits were are categorized according to the From one head protection gear treatment and care for their ailment completed for a number of sites criteria and performance metrics to another or affliction and that all of their in the U.S. including Mammoth, of the Occupational Safety and expectations of the Company with Steamboat, Tuscarora and Neal Health Association (OSHA) of the regards to the matter are met. Hot Springs. U.S. Department of Labor.

69 The Occupational Safety and Health Administration (OSHA) is an agency of the United States Department of Labor. 73 Time (‘days’) that cannot be worked (and are thus ‘lost’) as a consequence of a worker or workers being unable to perform their usual work because of an occupational 70 Each of the health and safety parameters are reported according to the relevant guidelines set out in 403-2 of the GRI Standards. disease or accident. Calculated as the number of lost day cases per 200,000 man hours. 71 Frequency of injuries, relative to the total time worked by all workers during the reporting period. Ormat uses the total recordable injury rate, TRIR which is calculated 74 Ormat plans to report on its Absentee Rate for employees in forthcoming reports. as the number of medical treatment injuries per 200,000 man hours. 75 Death of a worker occurring in the current reporting period, arising from an occupational disease or injury sustained or contracted while performing work that is 68 72 Frequency of occupational diseases relative to the total time worked by all workers during the reporting period. Calculated as the number of medical treatment controlled by the organization or that is being performed in workplaces that the organization controls. Calculated as the number of fatalities per 200,000 man hours. 69 occupational diseases per 200,000 man hours. United States Operations 200

Israel Operations 62 JHAs 432 Other International Operations 169

Drilling Operations 1

United States Operations 1065

Israel Operations 486 Ormat has a Company-wide KPIs Safety Suggestions | Number of Safety Inspections | Number of PSJMs 2068 for the implementation of our safety suggestions generated safety inspections per month Other International Operations 494 health and safety program for employees. Through adoption of Safety Observations | Number of Safety Work Orders (and/or Drilling Operations 23 the KPI, we seek to emphasize safety observations performed Completion of Safety Tasks) | the importance of sound health by employees Number of safety work orders United States Operations 1450 and safety activities at all sites, as generated or safety tasks well as express our commitment Job Hazard Analysis (JHA) | completed Israel Operations 0 Safety to learning and improving our Number of JHAs completed or 1626 Inspections health and safety performance. revised per quarter Safety Committee Meetings | Other International Operations 171 The KPIs measures, tracks and Number of safety committee compares performance regarding Pre-Job Safety Meetings (PJSM) | meetings conducted per quarter Drilling Operations 5 our existing Safety Participation Number of documented PJSMs Program and will report on the per month United States Operations 1353 following indicators: Safety Work Israel Operations 352 Orders 1956 (Tasks) Other International Operations 243

The following table represents our health and safety performance regarding the above-mentioned indicators in 2018: Drilling Operations 8

United States Operations 166 2018 2018 Indicator Business Unit Performance Total Safety Israel Operations 64 Committee 290 United States Operations 493 Meetings Other International Operations 59

Israel Operations 229 Drilling Operations 1 Safety 929 Suggestions Other International Operations 203

Drilling Operations 4

United States Operations 3131

Israel Operations 2828 Safety 7402 Observations Other International Operations 1375

Drilling Operations 68

70 71 In forthcoming reports, we plan Health & Safety in Our Work with Process Safety Management (RMP- Under the Volcano – important production and safety Events leading up to the shutdown to report on our health and safety Subcontractors PSM). In all cases, the regulated Managing Emergency indicators. Ormat employees demonstrate the strong safety indicator performance to show substance is the motive fluid in our also noted some pressure and and communication protocols and our progress year-over-year. In addition to implementing power plants; pentane, isopentane, Shutdown at Ormat’s Puna, brine irregularities. In response, emergency response planning stringent health and safety butane, isobutane.76 We typically Hawaii Geothermal Facility Ormat’s plant employees followed and procedures that Ormat’s Based on these indicators, we measures for our employees, we have small quantities of other the established protocols for lava employees apply at all operating operate a proactive safety plan demand our subcontractors to regulated substances like solvents intrusion and took quick action facilities. Protecting the health and for our employees, who are comply with relevant health and but most do not reach the quantity Ormat is majority owner of the to initiate shutdown procedures safety of employees, the public required to complete a number safety regulations as they pertain to relevant under the regulation for Puna geothermal power plant at the plant. This involved and the environment is of highest of different types of activities our operations, including our own official treatment. In Israel, our located close to the Kilauea reducing the plant’s pressure priority to the Company. Ormat and to report on their “Safety KPI rules, where relevant. In Ormat’s manufacturing facility follows the volcano’s East Rift Zone on the to 200 psi and isolating the maintained communication and Scorecard”. Each of our sites is standard contract for work with rules and regulations outlined Big Island of Hawaii. The Puna plant in sections until the entire worked in full cooperation with all required to set goals regarding subcontractors, the Company in the Hazardous Materials Law facility was safely shut down in facility was safely shut down. In local authorities throughout the the KPIs and to report on their reserves the right to indemnify (1993). Details on our treatment and early May 2018, following a series addition, to prevent any further event. Ormat assisted the local performance regarding the the services of the subcontractor dealing with hazardous materials of earthquakes and lava incursions hazards, potential flammable community by making the Puna following parameters: safety if the subcontractor violates or is provided in the “Measuring and caused by the volcano’s eruption. chemicals such as pentane were facility’s air monitoring equipment training of employees, number infringes upon any relevant laws, Controlling Other Environmental On May 3rd, Hawaii County’s Civil removed from the facility. On May available so that air quality and frequency of actionable rules, regulations or standards Impacts” chapter of this report. Defense department advised 4th, an earthquake measuring and safety could be accurately safety suggestions made, pertaining to occupational health the Company about a series of 6.9 on the Richter scale was gauged throughout the eruption number and frequency of safety and safety of employees. Ormat Ormat upholds detailed and earthquakes and cracks in the recorded, causing widespread and lava flows, which continued observations made, job hazard expects its subcontractors to strictly well-communicated emergency Leilani Estate area near the plant power outages, severe cracks to for several weeks. The facility analyses (JHAs) performed, pre- adhere to local health and safety response plans at each of its and warned about the potential highways and other infrastructure continues to remain shut down job safety meetings (PJSMs) held regulations, together with Ormat’s sites for evacuation in cases of for volcanic activity near the and major lava flows. The Puna and Ormat is currently working and at which frequency, number own expectations, whichever are emergency, natural disaster or Puna facility. All the geothermal facility reverted to emergency to repair damaged equipment, of safety inspections, number of more stringent. We also require other hazards, such as chemical wells at the Puna facility were diesel generators to maintain targeting a start-up in late 2019. safety work orders and number of all subcontractors to adhere to or pollutant spills and leakages. put under 24/7 monitoring basic power, while remaining in safety committee meetings. our checklist of “Environmental In general, the Emergency Action for pressure levels and other shutdown mode. Compliance Responsibilities”, which Plans (EAPs) are developed and Employees are encouraged is a list of tasks and necessary adopted by each of the offices, to take an active role in milestones that should be reported operational facilities and power improving our health and to Ormat on regularly by the plants on a local and case-to-case safety performance through subcontractor. Some of these basis. EAPs in the U.S. are based on the global Safety Participation requirements include: attending pre- the RMP-PSM, which governs all U.S. Program. The program is construction conferences to review state regulations, such as Chemical designed to encourage and health and safety expectations, Accident Prevention Program recognize employees who preparing an emergency response (CAPP) in Nevada and the California are actively involved in all plan, maintaining a speed limit of 10 Accidental Release Prevention aspects of maintaining a safe miles-per-hour in the construction (CalARP) Program. However, there and healthy work environment. area and other environmental is some general guidance from Employees can earn “Ormat controls, such as developing a Storm the global occupational health Bucks” by completing and Water Pollution Plan (SWPP). and safety team on the general participating in health and guidelines for generating an EAP. safety activities, such as safety Safe Dealing with Hazardous In our office spaces, the EAP work, taking proactive safety Materials and Emergency requirement is triggered by our fire measures, demonstrating Response Plans detection systems (OSHA Standard safety leadership, or by 29 CFR 1910.164) and by the fixed increasing safety engagement. When it comes to hazardous fire extinguishing system (sprinklers; By submitting safety reports, materials, U.S. plants are subject to OSHA Standard 29 CFR 1910.160). reporting unsafe conditions, the Comprehensive Environmental participating in JHAs or acting Response, Compensation, and as a safety committee member, Liability Act (CERCLA), the Puna surrounded by a lava stream Ormat employees can collect Emergency Planning and Community during the volcano eruption their “Ormat Bucks” at the end Right-to-Know Act (EPCRA), and of the month and select a prize. Federal Risk Management Plan/

76 More information on our treatment of these regulated substances can be found in the “Waste and Materials” chapter.

72 73 SUPPORTING wherever we operate, across the with stakeholders – from pre- LISTENING MEANS LEARNING Ormat’s stakeholders are In 2018, Ormat did not receive globe, while also understanding and development and planning through encouraged to file their grievances any major stakeholder grievances AND SHAPING perceiving the unique cultural needs to operations – is characterized by Community Engagement and directly with local plant nor were any other issues raised SUSTAINABLE of each location on every level, our “open door” policy. Handling Grievances managers and/or with appointed regarding vulnerable community from country to local community. representatives in their municipal groups in our areas of operation COMMUNITIES AND In all cases and locations, Ormat Ormat recognizes that for or community council who received. We are committed to FUTURES is committed to being open, SOCIAL ACTIONS PLANS successful interactions to regularly liaise with Ormat. achieving our goal of addressing transparent, consistent and focused occur, there must be a basis for and responding to 100 percent on delivering sustainable renewable At Ormat, we take the impacts meaningful communication, mutual Stakeholders may also contact of stakeholder requests received energy solutions that generate from the construction of our respect and trust. That’s why we Ormat through the ‘Contact Us’ through our various channels OUR GOALS AND GUIDEPOSTS inherently positive impact, for power plants seriously and work create processes and feedback page77 on Ormat’s corporate of stakeholder engagement, as the environment, society and the diligently to reduce them. We mechanisms to encourage all website which lists the mail, outlined in the “Our Strategy for Ormat’s mission is to be a leading economy. are guided by Environmental and community members to speak telephone, fax or email through Stakeholder Engagement” section. global provider of renewable energy Social Impact Assessments (ESIA), openly and honestly about any that they may connect and while building a balanced portfolio Our goal is to inform and engage which are conducted according to concerns that our development communicate with the Company. of geothermal, recovered energy our visitors and provide a first-hand local standards and requirements. activities may raise. Ensuring All concerns and grievances and storage assets. Ormat also look at how geothermal energy and We view this as an important way both positive and negative input received are addressed by Ormat’s recognizes the vital role that local other renewables are contributing to reduce negative impacts and is reported, listened to, and, Marketing and Communications people, communities and positive, to a cleaner energy future and a conducting such assessments most importantly, acted upon, department and are systematically long-term relationships play in more stable, affordable electricity is the first stage in establishing keeps communication channels reviewed and directed to the advancing the adoption, uptake grid. Across the globe, hundreds of our relationship with the local clear, quickly identifies pressing relevant corporate department for and long-term viability of renewable people – from school students, local community. The social part of the issues and promotes a spirit of review and any necessary action energy. Ormat sees an imperative to governments, service organizations, impact assessment first collects cooperation and pro-activity. and/or follow-up. act, operate and engage with local environmental groups and others data through dialogue with the local people and communities in a manner visited our facilities for tours. community, then maps the needs that is consistent both with globally of the local community and finally recognized social, environmental provides a framework for both and economic development UNDERSTANDING AND addressing stakeholder grievances standards and Ormat’s corporate UNIQUENESS and for generating positive impact values – of stability, constant through investment (philanthropic renewal, full commitment, courage Ormat knows each community or otherwise) in programs and/ and creativity. We view this as a reflects a constellation of unique or funds. Often these assessments fundamental pathway to success stakeholders and that no two are reviewed by relevant public and are inspired by the standards communities are identical. Each has authorities or by funding bodies, like of various leading sustainability its specific needs, characteristics, institutional investors, development frameworks, including those of the constraints and challenges. We banks and other relevant parties, Global Reporting Initiative (GRI), seek first to understand and assess and are often conducted prior to the United Nations Sustainability the local conditions through our permitting processes. Development Goals (SDGs), and Stakeholder Engagement Policy. other principles such as the OECD Our approach is responsive and In 2018, of all the social and Guidance on Sustainability Impact respectful to local customs, in full environmental impact assessments Assessments and the ISO 26000 alignment with all local regulations we conducted, Ormat did not guidelines for social responsibility. and laws and sensitive to the discover any notable negative These are the guideposts for the specific needs and requests for impacts on local communities. behavioral expectations Ormat contributions and assistance voiced upholds for all employees as we work by each community. This approach towards fulfilling our mission and highlights an essential truth – each engaging with local communities. community has deep insights into the ways it can be improved. Seeking Celebrating in a school Ormat Another essential principle that we this input typically leads to the most supported near Amatitlan in seek to implement in our activities proactive and potentially uplifting Guatemala and policies is that of equality. outcomes. Ormat’s commitment Ormat applies the same high to community typically begins well standards to the way we interact, before we start development in a new engage and develop our business region. Every part of our connection

77 https://www.ormat.com/en/company/contact/main/

74 75 United States close proximity to our Mammoth Amatitlan is handled through the The plan includes grievance In the United States, Ormat Geothermal Complex. The Orpacaya Trust (“Fideicomiso mechanisms for stakeholders works to increase awareness of stakeholder group, known as Orpacaya”) that enables Ormat to that enables various points of renewable energy and geothermal the Mammoth Community Water advance relationships with the local view, interests and concerns from energy in the general public as District (MCWD), asserted that community by furnishing economic local communities to be heard, well as for policy makers and the extraction of geothermal fluid and educational opportunities. The understood and factored into the government representatives. We at Ormat’s plant was affecting Orpacaya Trust works to develop plant’s operations and plans for share information on geothermal the area’s shallow water aquifer social projects on education, community investment. energy’s multiple benefits as a and impacting the quality of its health, infrastructure and viable, steady, reliable source of drinking water. Ormat conducted environmental mitigation. Financial The sustainability plan in renewable energy that has minimal advanced hydrological testing, support for the trust is allocated Honduras includes allocation of impacts on the surrounding which showed that our activities annually from Ormat’s power plant financial resources to support a environment. Ormat also engages do not impact the area’s shallow budget. In 2018, Ormat contributed Corporate Social Responsibility with local communities near our water aquifer. The MCWD US$100,000 to the trust, which Fund. In this location, the power plants in the United States, withdrew its claims against Ormat funds social, environmental and local community is defined according to organized stakeholder in late 2018. educational engagement. The as those in close proximity to engagement mechanisms that engagements are designed to transmission lines coming out encourage open dialogue and seek In 2018, during the construction be self-sustaining and motivate of the Geotermica Platanares to address relevant issues and of the 3rd phase of the McGinness support and involvement from the geothermal facility. Through this concerns according to grievance Hills complex, Ormat, followed local community. In 2018, the trust fund, Ormat makes investments The Platanares perimeter fence painted mechanisms. agreements reached in the early paved roads, built infrastructure to enhance the quality of life, by the local children stages of community consultation, and funded supplies and food education and healthcare locally. A recent project involved the with the Yomba Shoshone and for local residents impacted by During the past two years, Ormat repower (replacement of old Duckwater Tribes. The two tribes the Volcan de Fuego eruption, supported road improvements power plant equipment to improve were consulted throughout the which occurred June 3rd, 2018. in Yarusin and Maicupa. performance) of one of our plants project and were able to monitor Additional funds were invested in These major infrastructure in the Steamboat geothermal construction in their sacred land. the construction and renovation Honduras community so that individuals improvements acknowledged complex near Reno, Nevada. Ormat of local parks, tree planting and Since 2012, Ormat has actively can submit requests and/or road impacts made by heavy attended a neighborhood advisory Guatemala reforestation programs, and in advanced development of suggestions directly to the plant. machinery during construction board (NAB) meeting, provided a Ormat’s community engagement the development of research and Honduras’ national geothermal of the Geotermica Platanares workshop at the Reno city council, efforts and action plans for the hydrological studies to improve energy capability through our To address requests from the and Ormat, and together with and in 2019 plans to meet other largely agrarian areas around local water supply and access. involvement in the Geotermica project’s funding institutions, project partners, ensured that bodies such as the City Planning Zunil and Amatitlan are designed Platanares geothermal project, Ormat developed a thorough the roads were restored to pre- Commission and the Regional to support positive value creation Our Zunil power plant manages and from the start this included stakeholder engagement plan construction conditions. Planning Committee. The Reno and improved quality of life. and executes a fund for the community engagement. Under based on the ISO 26000 standard City Council approved the project, engagement and support of La Honduran law, Ormat’s Platanares of social responsibility, World Kenya based on its adherence to relevant To develop our community Calera, the local community. power plant must comply with Bank standards, the OECD Ormat’s Kenyan geothermal regulations, including those engagement plans in Amatitlan, This fund focuses on identifying a number of social engagement Guidelines for Multinational facility, Olkaria III, is uniquely governing Ormat’s environmental Ormat communicates directly and improving educational requirements, such as establishing Enterprises and relevant SDGs. located inside a wildlife sanctuary and social engagement. During with the local five communities: opportunities for the students a fund that we contribute to on a The plant works according to with close to Lake Naivasha Hell’s Gate the NAB, Ormat explained San Francisco de Sales, El Cedro, in the local elementary monthly basis for investment in the United Nations Development National Park, where there two the power plant’s purpose, its El Bejucal, El Pepinal and San school. The local community’s the local community and to fund Program (UNDP) to measure local communities: Olomunyak financial benefits and fielded Jose Calderas. This is done relevant requests or grievances reporting on our sustainability its social and environmental and Narasha. In compliance with concerns and questions from the through a committee, known as are communicated to and activities regularly. Stakeholder progress. This helps us provide Ormat’s stakeholder engagement local community. Following the a “COCODES” that organizes and addressed directly by the local engagement and local community recommendations for future strategy, and to address requests meeting, Ormat worked to address manages relevant stakeholder plant manager. engagement are managed activity while minimizing from project funders - the relevant concerns and we continue requests. Local officials from according to a defined stakeholder exposure to potential economic, German Investment Corporation to publish an annual report on the municipality, regulators and relations plan, corporate social social and environmental risks (DEG) and the Environmental progress regarding identified local community members are all responsibility action plan, health and supporting the discovery Resources Management (ERM) initiatives. represented on the COCODES. and safety action plan, grievance of positive local engagement East Africa Environmental and Ormat then answers the requests mechanism and an environmental opportunities. The systematic Social Due Diligence (ESDD) - In 2018, Ormat addressed through relevant activities, action plan. These plans are approach to stakeholder Olkaria III developed: Stakeholder stakeholder grievances from initiatives or messages to the shared with the local community engagement encourages the Engagement Plan (SEP), a representatives in Mammoth community. The relationship and in central locations. Mail boxes development of constructive, long- Grievance Mechanism (GM), a Lakes, California - a town in assistance to the community in were also set up around the local term stakeholder relationships. Corporate Social Responsibility

76 77 (CSR) Policy and a CSR Strategy. which currently focuses on five We believe that being a good basis, with a salary well above the The local sustainability manager key areas: donation to the school neighbor is the right thing to do average local income. Employees reports annually on the status to support teachers, the Bursary and that hiring locally is the right are able to work for two months a of each of these policies and program, the school feeding way to operate. year and then the job moves on to implementation plans, while program, investing in improved another local resident. Through this setting goals and recommending infrastructure around the plant United States process, we are able to generate projects for future engagement and for the local community, and A significant component of and disperse significant economic with the local community. supporting the Kenya Wildlife community engagement is focused and professional value across the Service (KWS) and Kenya Forest on the economic benefits of local community. In Zunil, Ormat Ormat’s SEP in Kenya provides Service (KFS), which facilitate building geothermal power plants created similar arrangements a framework for engagement the environmental and ecosystem as they can act as a source for through which 30 positions are of relevant stakeholders and management of Hell’s Gate ongoing employment and financial made available to local community the local community. It does National Park. productivity, particularly in areas residents, with five employees this by defining the regulatory, that are remote and do not have working concurrently for a period lender and Company entities Guadeloupe many employment opportunities. For of two months. necessary for consultation, while In Guadeloupe we have a example, Ormat’s Ormesa Geothermal also identifying and prioritizing community engagement Complex, built in California’s Imperial In the past, the local community relevant stakeholders. The program according to which Valley in 1988, became the second indicated that it would like plan also defines a strategy we organize a periodical largest employer in an area that is Ormat to create more jobs to and timeframe for sharing meeting with the neighbors impacted by severe unemployment. address the economic needs Children in a school Ormat supports information and consulting and association management of the community. However, near Zunil in Guatemala stakeholders and stipulates the to discuss our stakeholders Part of Ormat’s commitment to once Ormat’s power plants are resources and responsibilities for concerns. Additionally, as our job creation and quality education constructed and operational, they implementation of stakeholder power plant is located in the involves working in local U.S. are largely self-sufficient and engagement activities. heart of the city, we have a role communities to train students require only eight to twelve full- in the social improvement of the in high-demand fields and instill time employees to operate. The In addition, the Grievance neighborhood and the life of the technical skills that translate into program described above tries to a program to employ people student scholarships for Mono Mechanism is made of key city and the local sport and cultural career-building opportunities. answer that need, and was well- from the local community at County students attending Cerro performance indicators (KPIs) association and we supported For example, Ormat developed received by community residents, the plant, whenever possible. Coso Community College in the such as accounting for the cultural events. We also provide curricula for a power operator who have withdrawn the majority Eastern Sierra Region of South number of grievances received, support for such associations in course at a local community college, of their job creation grievances Educational Empowerment California. The scholarship funding those that are unresolved, or the cities close to Bouillante. We which provided a successful pool with the Company, but still there covers students’ full tuition, and grouping of grievances according support the refurbishment of the of employees for our local plant. were complaints in 2018 that not Responsible citizenry, improved according to Paul Thomsen, Ormat’s to stakeholder groups. The houses located around the plant Ormat also sponsored a program to enough jobs are available. social conditions, economic self- Vice President, “This partnership mechanism’s goal is to identify to improve the quality of life for educate local teachers on renewable sufficiency and the enrichment of aligns with our ongoing efforts to trends across all grievances local stakeholders. and geothermal energy through the Kenya individuals’ lives are just a few of support community development received, ensuring that they are Desert Research Institute (DRI), a In order to support economic the benefits that can be derived in the Mammoth community. Ormat addressed while identifying areas Local Livelihood non-profit environmental research development and job creation, from educational opportunities. believes in higher education and in for improvement. arm of the Nevada System of Ormat provides training and Ormat is a strong supporter and promising futures for the Mammoth One of the prime directives that Higher Education. Ormat also wrote capacity building opportunities promoter of universal access community and its students.” Ormat’s Kenyan Community sets Ormat apart is our Company- curricula for a geothermal energy for youth. These range from to education and wherever we Investment Policy was created wide promotion of local course for the U.S. public school vocational skill training on financial operate, we look for opportunities In addition, in an effort to teach through community consultation, employment; everyone who works STEM78 program and sponsors a literacy, driving, construction, to fund and strengthen as many people as possible about shaped by several key principles at a plant is from the country in geothermal energy program for business management and educational opportunities – at all renewable energy – specifically and themes including: training which the plant is located. We geoscientists at the University of administration, as well as levels – from primary education geothermal energy - Ormat and capacity building, believe every renewable energy Nevada. scholarships for secondary, all the way to university. sponsored an exhibit about biodiversity conservation, facility we develop, own and/ mid-level and university geothermal resources at a local health promotion, education or operate should be staffed by Guatemala - Amatitlan education. Additionally, Ormat United States children’s museum and hosts and supporting local community people who live in or close to the In Amatitlan, the Orpaycaya Trust supports small to medium- Ormat decided, early in 2018, to numerous tours and workshops development programs with the local community. This reflects includes a labor agreement for the sized enterprises (SMEs) commit substantial funds over for students and educators at goal of improving livelihoods. Ormat’s responsibility to return creation of jobs for local residents. through business training and is three years to the Mammoth our facilities. These areas of impact were benefits and generate positive As of 2018, 47 positions were considering adding a provision Lakes Foundation, underscoring determined based on the plant’s impact for the local communities available and were provided to local of micro-credit schemes in the our strong commitment to public Guatemala community investment strategy, in proximity to our operations. residents on a rolling or job-sharing future. Additionally, Ormat has education. These funds will support In Amatitlan in 2018, the

78 STEM is a curriculum based on the idea of educating students in four specific disciplines — science, technology, engineering and mathematics — in an interdisciplinary and applied approach.

78 79 Orpacaya Trust provided 35 recreational options. In addition, to the Company and contribute to the organizations in Israel, but the ORT network, the goal of chance for education. This students with scholarships, school children were invited to local economy. Ormat also supports the focus of its community the school’s four-year program innovative program also creates funded construction of schools participate in painting the front the school in terms of teachers’ engagement is a special technical is to instill in graduates skill shared value by ensuring a and new classrooms and paid wall of the plant. This event helped employment, improvements and and vocational secondary school sets and expertise in industrial stream of skilled employees for the salaries for two teachers at teach the students about the renovations to local schools and called “ORT Ormat”. ORT is a crafts such as electrical Ormat’s Yavne manufacturing local schools. benefits of geothermal energy and provides materials and equipment non-governmental organization manufacturing, metalworking facility and by training and the importance of preserving the as donations-in-kind. Field trips that sponsors the country’s and multi-media. A number of empowering young people who In 2018 in Zunil, the La Calera trust natural habitat. for students and educating youth largest science and technology the students come from socio- are challenged by conventional provided funding for scholarships for on the benefits of renewable and network. Established in 1970 at or economically disadvantaged educational systems. About 70 fifteen exceptional students who will Family-oriented celebrations geothermal energy are other ways Ormat’s Yavne factory together backgrounds or faced challenges percent of Ormat’s long-term pursue additional higher education are an integral aspect of Ormat promotes innovative learning. with the Ministry of Labor, Social in the local school system and manufacturing employees are opportunities. Funding was also Honduran culture. Ormat Affairs and Social Services, and the school is often their last Ormat ORT graduates. allocated to donate food and gas recognizes and supports Guadeloupe supplies, used to make healthy these cultural celebrations, We support local clubs such as breakfasts for schoolchildren, for the contributing to events honoring a sports club (for soccer and donation of laptops and projectors, Children’s Day, Student’s Day, cycling) and music club. The school supplies, school and sports Mother’s Day and Christmas, by support is provided through Dreams Come True for Mary this, she joined the Davpur High the chance to attend school. uniforms and sponsorship of a fun underwriting the costs of food grants in purchasing supplies. Hoseni School, then transferred to St. Mary volunteers at the local day, known as “Children’s Day”. baskets, cakes and piñatas. Additionally we provide school Clare’s of Assisi girls’ Secondary school, providing motivation These practical, grass-roots actions tutoring for students. As Safety School. Ormat continued to and encouragement to support openness and long-term Kenya is a core value at Ormat, we have Ormat believes education create sponsor her educational studies younger teenage girls to stability while creating pathways for To realize our Community supported a specific action plan, opportunities, opens pathways and in 2015 she entered Jomo reach their goals. She also progress. Investment Policy in Kenya, Ormat in association with the City, for and makes progress possible Kenyatta University of Agriculture coaches local sports teams for has a well-established record of safe bicycle and scooter driving – socially, environmentally and Technology, successfully girls, recognizing that being Honduras funding education programs in for young people. This included and economically. That’s why obtaining her diploma in mentally and physically fit is Ormat has provided support for Kenyan communities near our a “Safety Day” with policemen, wherever we operate, we seek purchasing and supply chain an important contributor to the local schools in Honduras, operations, emphasizing scholarship firemen, and driving lessons innovative ways to support management. She went for her successful learning. Finally, donating one hundred school desks opportunities for bright young girls. in the school. Lastly, we have education at every level, through attachment at Moi teaching and she contributes her time as to improve the educational learning This Bursary program provides also granted some electronic scholarships and bursaries, referral hospital which was an a Community School Board environment. The beautifully higher education pathways for gifts such as computers and funding of teacher’s salaries, academic requirement. Member, which provides support carved wooden desks are durable, female students and opens doors cellphones and travel tickets collaborating on curriculum so that other female students functional and more comfortable to careers as an alternative to early for the ten best students in the development and by providing After graduating, Ormat hired are able to access quality for the students and intended to marriage. One local female bursary city. classroom equipment and Mary for an initial internship in educational opportunities. improve students’ overall learning recipient is now an Ormat employee, infrastructure. 2017 and enthusiastically hired experience. Ormat also donated applying the knowledge she gained Israel her as a permanent employee in bicycles to the school to improve through her education to give back Ormat supports many charitable Mary Hoseni, a 23-year-old who 2018. Mary explains what Ormat’s lives in Narasha Village, Naivasha, support has meant to her: “I Kenya is a prime example of what was lucky to get sponsorship at a willingness to learn and strong Olkaria III. I am very grateful to educational support can do. Mary the entire Company for making had a challenging childhood, my dreams come true. This where she bravely overcame a support enabled me to achieve series of eye issues and a major eye my goals and made me whom I operation. Despite having to drop am today.” out of school several times due to these setbacks, Mary persevered, Mary’s education and working her way through the employment pathway has Narasha primary school, which generated a series of benefits Ormat has supported for more throughout her community. than 17 years. Mary was the first With her education and full- girl child to complete the primary time employment, she has the school level in the School, a major resources available to help Students receive positive affirmations about the value of education. The note in this photo reads, accomplishment and cultural support her family and pay “Do you know in you lies a seed that can change your life, your family, society, country and world?” shift away from early marriage, school fees for her younger which is commonplace. Following siblings, giving all of them

80 81 Healthcare Delivers Hope playground at the Mammoth Creek Guatemala. Honduras – Designing a SDG 3 – Health & Well-Being; initiatives are the first outcomes Park, California, which was officially Social Action Plan According SDG 4 – Education; SDG 6 – Clean of a multi-year plan that will be Improving access to healthcare is opened on July 4th, 2018. The 7,700 Honduras to the SDGs Water; SDG 7 – Affordable and enlarged and reinforced in 2019 one of the most profound ways square-foot playground serves as Ormat contributes to the health of Clean Energy; SDG 8 – Decent and beyond. in which a Company can exert a a National Demonstration Site and local communities by funding the In 2018, Ormat advanced a social Work and Economic Growth; positive influence on individuals and incorporates the Seven Principles local community health center, and action plan for the local community SDG 9 – Industry, Innovation communities. Access to healthcare of Inclusive Playground Design79, by providing necessary instruments, around the Plantanares geothermal and Infrastructure; and SDG 13- improves the most fundamental providing opportunities for the equipment and medicine. Ormat also power plant, in alignment with Climate Change. human conditions, prevents disease, physical, social-emotional, sensory, funds medical, dental and optical the United Nation’s Sustainable supports families and is a major cognitive, and communicative treatments for local residents in need Development Goals (SDGs) and Based on these SDGs, Ormat pillar of our community investment benefits of play for all. Ormat also and has built a new water distribution relevant targets. The purpose of began engaging in programs program. Similarly, initiatives proudly supports the Food Bank of plant for the local community. connecting the social action plan to with local and international that work to reduce poverty and Northern Nevada. the SDGs is to accurately gauge local development organizations to provide nutritional food, especially Kenya community impacts and demonstrate maximize the impact of its social for younger, growing children, are Guatemala Ormat supports health-related to Honduran governmental and investments. For example, Ormat among the priority areas Ormat In 2018, the Orpacaya Trust interventions in Kenya such as non-governmental groups how committed to working with the targets with our community supported salaries for a doctor and health education, sanitation and Ormat’s activities are contributing World Food Program locally, which investment programming. nurse to work three and two days behavioral change to effect positive to the achievement of nation-wide provides meals for local school per week respectively at a local improvements in community development targets. children. We also invested heavily United States clinic as well as transportation for health. Our programming includes in improvement to the local health Ormat is involved in a wide local residents to reach the clinic. the Water, Sanitation and Hygiene Ormat’s Plantanares plant center and medical infrastructure. variety of partnerships designed These measures helped elevate (WASH) Promotion, raising HIV- manager evaluated the SDGs that To address SDG 6, Ormat’s plant to promote health, well-being, the standard of healthcare locally AIDs awareness and school health Ormat was likely to have the most funded a water filtration and dignity and self-sufficiency. We are as access to adequate healthcare campaigns. local impact on and identified the distribution system, together proud sponsors of a new inclusive is a topic of national concern in following: SDG 2 – Zero Hunger; with the local municipality. These

Children, staff and local Ormat employees in a school Ormat supports near Zunil in Guatemala

79 They are thoughtfully designed to provide a safe place where children of all abilities can play together, and are developmentally appropriate for children with and without disabilities. An inclusive playground takes away the barriers to exclusion, both physical and social, providing a “sensory rich” experience for all.

82 83 CHAPTER VI. OUR HOLISTIC APPROACH TO CORPORATE GOVERNANCE AND ECONOMIC MANAGEMENT

Platanares geothermal power plant, Honduras, 38 MW

84 85 MAKING SOUND corporate governance practices, such (CEO), succession planning, reviewing Board of Directors made up of nine environmental and social topics are and/or the Board of Directors on a as our Code of Conduct, anti-bribery and approving significant transactions members. The standing committees distributed amongst various senior periodic basis and as needed, based CORPORATE and anti-corruption policies and and analysis of shareholder proposals, of the Board are the Audit executives,and not necessarily among on their determination on the necessity GOVERNANCE more. Ormat intends for 100 percent among other responsibilities. As of the Committee, the Compensation the board of directors, according to of such updates regarding economic, of our employees to receive training publication of this report, Ormat’s Board Committee, Investment Committee their relevance to the executive role. For environmental or social matters. A PRIORITY on relevant corporate governance of Directors did not have a Corporate and the Nominating and Corporate instance, our Executive Vice President of practices. Social Responsibility or Sustainability Governance Committee. Market Development is responsible for Committee on the Board of Directors. assessing related risks and opportunities ORMAT’S BOARD OF DIRECTORS Sound corporate governance is a top Ormat has a dividend policy arising from Ormat’s engagement with priority for Ormat due to our nature as OUR CORPORATE GOVERNANCE In addition, Ormat’s Board of Directors designed to distribute at least 20 economic, environmental and social Ormat’s nine board members a publicly traded and global renewable GUIDELINES adopted a Code of Ethics for Senior percent of annual profits (available topics. In addition, some senior roles are are comprised of two women energy Company. Furthermore, as part Executives in 2004, as required by for distribution, if approved by purely devoted to such issues, such as our and seven men and a diverse of our web of global operations and due Our Corporate Governance Guidelines, the Sarbanes-Oxley Act of 2002 our Board of Directors) by way of Global VP Quality, Health, Environment range of ages and nationalities to the nature of our business, our success which are made publicly available and out of the belief that proper, quarterly dividends to registered & Safety and the newly established are represented. The majority of is also dependent on the approval of on our website at the following honest and ethical employee conduct shareholders. position of Sustainability Manager. Ormat’s directors are from the regulators and policymakers for issuing link80, outline the expectations from are essential to the success of our These senior executives and relevant United States or Israel. Details on permits and approving the development, management and the Board of Company. The Code can be accessed Responsibilities for economic, managers report to Senior Management our directors are outlined below. construction and operation of our power Directors to monitor and measure the on our website at the following link82. plants. In addition, we work with a number effectiveness of policy and decision- The Code applies to all of Ormat’s of major financing institutions in order making in order to enhance stockholder senior executives. The Code outlines to fund the construction of our plants, value for the long-term. The policy was our expectations of senior executives Director Position on Ormat’s Board Membership in Committees Gender Date Joined which necessitates that we maintain adopted by Ormat’s Board of Directors including a commitment to honest of Directors a transparent and open approach to and is periodically reviewed by the and ethical conduct and handling of Chairman of the Board of disclosure regarding our corporate Nominating and Corporate Governance affairs, to advance the Company’s Todd C. Audit, Compensation, Nominating Directors and Independent Male July 2017 governance and economic management Committee of the Board of Directors. business by legitimate means, to Freeland and Corporate Governance (Chair) practices. Finally, we believe that sound refrain from fraudulent or corrupt Director corporate governance is important as The policy manages and outlines Ormat’s activities and to provide full disclosure it maintains our level of accountability procedures on the following topics: regarding any of the Company’s Stanley B. November Independent Director Audit Male and disclosure with our stakeholders. board composition including guidelines reports or documents. Senior Stern 2015 Therefore, at Ormat we devote significant for the selection, responsibilities and executives are requested to report resources to managing corporate remuneration determination for the any violations of the Code to the Yuichi Nishigori Independent Director Investment Male July 2017 governance and, where possible, toward board members; guidelines for board Secretary, the Chairman of the Audit improving our performance or our level meetings; management of committee Committee or the Board of Directors, Audit, Compensation, Nominating of disclosure. matters; board responsibilities; and and violations of the Code are subject David Granot Independent Director and Corporate Governance, Male May 2012 expectations from directors. The to disciplinary action up to and Investment (Chair) The topic of corporate governance policy outlines Ormat’s criteria for including termination of service. Any is managed and defined based on determining director independence revisions, changes or waivers to the Compensation (Chair), Nominating November Ormat’s values, which are outlined and the Company’s commitment to, at Code must be approved by the Board Ravit Barniv Independent Director and Corporate Governance, Female 2015 at the beginning of this report in “An minimum, a majority of independent of Directors or the Nominating and Investment Organization Shaped by Values” directors on the Board. The policy Corporate Governance Committee. chapter. The five values that define describes the responsibilities of the Senior executives are required to Ormat are fully reflected in the way various Board of Directors’ committees: sign and formally acknowledge the Dafna Sharir Independent Director Female May 2018 that we do business and interact Audit Committees, the Compensation Code as part of their employment with our stakeholders every day Committee and the Nominating and contract. Senior executives are also Audit (Chair), Compensation, and in every location. For us, Corporate Governance Committee. expected to follow Ormat’s Code of Nominating and Corporate November Dan Falk Independent Director Male corporate governance is defined by Each of these committees has their Business Conduct and Ethics, which is Governance 2004 honesty, openness and fairness and own separate charter that governs the applicable to all employees. we expect all of our employees, topics and procedures of each of the managers and directors to exhibit committees, and which are publicly these qualities at all times. available on the “Governance” page ORMAT’S CORPORATE Byron Wong Independent Director Audit Male July 2017 of our website81. Finally, the policy GOVERNANCE STRUCTURE Nearly all of our employees and describes the responsibilities of the Stan H. managers received at least one Board of Directors, which include: Ormat is a publicly traded Company Independent Director Male Juyl 2017 hour of focused training on relevant evaluation of the Chief Executive Officer managed by a fully independent Koyanagi

80 https://www.ormat.com/Warehouse/userUploadFiles/Image/Corporate%20Governance%20Guidelines%20-%20Final.pdf 81 https://www.ormat.com/en/company/welcome/governance/ 82 www.ormat.com/Warehouse/userUploadFiles/Image/CODE%20OF%20ETHICS%20APPLICABLE%20TO%20SENIOR%20EXECUTIVES.pdf 86 87 The Board of Directors’ main were taken in response to evaluations and approving corporate goals ORMAT’S EXECUTIVE Ormat prides itself on a highly management team is designed to serve responsibility is to provide direction of the highest governance body’s and objectives relevant to the CEO MANAGEMENT qualified and experienced executive a designated function that addresses and oversight. The Board establishes performance, particularly with and executive officers, for making management team of seven members. Ormat’s business needs and requests Ormat’s strategic direction and respect to governance of economic, recommendations to the Board with Each position on the executive from our key groups of stakeholders. oversees the performance of its environmental and social topics. respect to the adoption, amendment, business and management of any termination or replacement of relevant economic, environmental Ormat’s Board of Directors incentive-compensation plans, equity- The following details information on our executive management team: and social impacts. The Chairman of Committees based plans, revenue sharing plans the high governance body is not an or other relevant plans maintained by executive officer in the organization. As mentioned, Ormat’s Board of the Company, and for overseeing the Executive Officer Position Gender Date Assumed Ormat’s senior management is Directors has three committees: the Company’s compliance with SEC rules Position responsible for the development, Audit Committee, the Compensation and regulations regarding shareholder approval, and updating of Ormat’s Committee and the Nominating and approval of certain executive purpose, policies, and goals related Corporate Governance Committee. compensation matters, among other Isaac Angel Chief Executive Officer (CEO) Male July 2014 to economic, environmental, More information on the committees topics. The committee is made up of and social topics. For instance, that make up Ormat’s Board of at least three directors who meet the Doron Blachar Chief Financial Officer (CFO) Male April 2013 management is responsible for Directors can be found in our Annual relevant independence considerations, approving Ormat’s corporate-level Report at the following link.83 as outlined per the regulations Executive Vice President - Electricity Zvi Krieger Male July 2014 policies and periodically reviews mentioned above. More information Segment environmental and social impact The purpose of the Audit Committee on the Compensation Committee assessments and action plans for is to assist the Board in fulfilling its is available in the Company’s Executive Vice President - Business Bob Sullivan Male July 2015 our power plants. In addition, the oversight responsibilities with respect Compensation Committee Charter at Development Sales & Marketing Board of Directors is responsible to: the integrity of Ormat’s financial the following link.85 for reviewing strategies and goals statements; the effectiveness of Executive Vice President - Product relating to corporate governance, Shlomi Argas Male January 2018 internal controls over financial The purpose of the Nominating and Segment and Operations economic, environmental and social reporting; Ormat’s compliance with Corporate Governance Committee issues and for setting the level of legal and regulatory requirements; is to assist the Board of Directors Executive Vice President - Market expectation from the Company and the independence and qualifications in identifying qualified individuals Nir Wolf Male January 2015 Development its employees regarding these issues. of Ormat’s independent auditor; to become members of the Board, The Board is occasionally and on and performance of the Company’s for selecting or recommending the General Council & Chief Compliance a case-to-case basis updated on internal audit functions. The Board director nominees, developing Hezi Kattan Male February 2018 progress with regards to Ormat’s committee is made up of at least three and recommending to the Board’s Officer (CCO) economic, environmental and directors who meet the appropriate corporate governance guidelines and social performance by the relevant independence and experience for overseeing the evaluation of the managers and responsible parties considerations as outlined by the Board and executive management. within the Company. standards of the New York Stock The committee provides the Board Ormat’s executive management to educational opportunities on is comprised of at least three Exchange. More information on the with guidance with respect to their team, including the Chief Executive topics that are most relevant to their directors, each of whom meets the The Board is responsible for Audit Committee is available in the oversight of and involvement in Office and the Chief Financial professional dealings. All executive independence requirements under periodically, and at least annually, Company’s Audit Committee Charter shareholder engagement, reviewing Officer, is responsible for setting managers have similar grievance and the listing standards of the New conducting a self-evaluation. The at the following link.84 the Company’s Corporate Governance Ormat’s business strategy and consultation mechanisms available York Stock Exchange. At least two Board and the Nominating and Guidelines and monitoring compliance direction together with the Board of to them as do Ormat’s employees, members of the Committee will also Corporate Governance Committee The Compensation Committee’s with the guidelines, and making Directors, for setting the Company’s as outlined in the “Our People: qualify as “non-employee directors” are responsible for establishing the purpose is to be responsible for the independence considerations performance goals and KPIs and Employment and Skill Development within under the Securities Exchange evaluation criteria and overseeing Company’s overall compensation regarding Board members, among for the general management of the at Ormat” chapter. Act of 1934, as amended. Members of the implementation of the process philosophy and assists the Board of other responsibilities. The committee Company’s employees, stakeholder the Committee, including the Chair for such evaluation. If needed, Directors in its oversight responsibilities is made up of at least three directors matters and affairs. Remuneration Policies of the Committee are appointed actions are periodically taken in with respect to the compensation who meet the relevant independence by the Board based upon the response to evaluation of the highest of Ormat’s Chief Executive Officer considerations, as outlined per the Each member of the executive The responsibility of reviewing recommendations of the Nominating governance body’s performance with and other executive officers and SEC regulations detailed above. More management team is screened for the and recommending to the full and Corporate Governance respect to governance of economic, directors, including all compensation information on the Nominating and relevant experience and knowledge Board the form and amounts of Committee. environmental, and social topics, plans, policies and programs that Corporate Governance Committee is that is needed to perform their role compensation and benefits for including, as a minimum, changes are subject to Board approval. The available in the Company’s Nominating fully. Similarly, all executive managers non-employee directors lies with In making its recommendations, the in membership and organizational Compensation Committee is also and Corporate Governance Committee undergo performance reviews and Ormat’s Compensation Committee. Compensation Committee seeks practice. In 2018, no material actions responsible for annually reviewing Charter at the following link.86 are provided with training or access The Compensation Committee to fairly compensate directors at

83 https://investor.ormat.com/Cache/1001250792.PDF?O=PDF&T=&Y=&D=&FID=1001250792&iid=4087066 84 https://www.ormat.com/Warehouse/userUploadFiles/Image/Audit%20Committee%20Charter%20-%20Final.pdf 85 https://www.ormat.com/Warehouse/userUploadFiles/Image/Compensation%20Committee%20Charter%20-%20Final%20.pdf 88 86 https://www.ormat.com/Warehouse/userUploadFiles/Image/Corporate%20Governance%20Guidelines%20-%20Final.pdf 89 levels that are competitive with regulations, the Committee reviews Plan was adopted and approved ENSURING Ormat persons are not to receive, report any suspected violations other companies in the industries in and discusses the Compensation at the 2018 Annual Meeting of pay, nor to permit a third party of the Anti-Corruption Policy to which Ormat competes and to align Discussion and Analysis (CD&A) that Stockholders. The amended A CORRUPTION- conducting business on Ormat’s the Anti-Corruption Committee directors’ interests with the long- is included in the Company’s annual plan continues the majority of FREE WORK behalf to receive or pay, bribes and failure to do so could result term interests of our stockholders. proxy statement and Form 10-K at the benefits outlined in the 2012 from or to anyone, at any time, for in termination of employment or In its deliberations, the Committee the following link.88 plan. Under the 2018 Incentive ENVIRONMENT any reason. Furthermore, the policy of other contractual relationships. and the Board consider whether the Plan, a total of 5,000,000 shares outlines definitions of key terms so Retaliation is not taken against any levels of director compensation could Finally, Ormat strives to provide of Ormat’s common stock were that they are clear to employees, actor who, in good faith, reports impair independence and critically a competitive compensation and authorized and reserved for As part of Ormat’s commitments such as what “bribes” and suspected policy violations. Ormat evaluate any consulting, charitable benefits package to all our employees, issuance, all of which could be to sound corporate governance “facilitation payments” are, what is committed to investigating and contribution or other potentially including our executive managers. issued as options or as other forms and its values of Stability and Full could be considered “knowledge” of reporting all concerns according to indirect compensation arrangements. Benefits are tailored to the needs of of awards. The term of stock-based Commitment, which are a central corrupt practices and how relevant the outlined grievance management The Committee also approves and our employees and their families at our awards typically ranges from six to part of our mission, we work to concerns should be reported, and mechanism. In addition, we offer makes recommendations regarding global locations and may vary from ten years from the grant date. ensure that all of our activities are guidelines regarding business gifts, a range of reporting tools for the appropriate compensation for country to country, but may include: free from corrupt practices and that travel and entertainment. The policy employees including escalating Board members, which may include our employees are well-informed of also describes Ormat’s procedures issues through management, equity-based rewards,87 retainers, • Health, Dental and Vision insurance our expectations regarding ethical for providing training to employees whistleblowing mechanisms, and committee chair fees, stock options Retirement behavior. on topics of anti-corruption, how a dedicated telephone line and and similar items. • Short Term and Long Term Ormat’s directors, officers and website for confidential reporting of Disability Ormat’s Corporate Governance employees can be certified for concerns about unethical behavior In addition, the Compensation • Life Insurance Guidelines, our Code of Business anti-corruption compliance in their (see below). Committee is responsible for setting • Wellness programs Conduct and Ethics, Code of Ethics various professional functions, corporate goals and objectives for Senior Executives, and Anti- relevant methods for conducting relevant to the CEO’s and executive More information on employee Corruption Policy outline our relevant due diligence on anti-corruption COMMUNICATION AND TRAINING managers’ compensation, including benefits is outlined in the “ Our People: corporate governance practices measures with third parties and ON ANTI-CORRUPTION the responsibility of assessing their Employment and Skill Development regarding anti-corruption and the conditions for implementation of COMMITMENTS performance in light of the set goals and at Ormat” chapter of this report. expectations our Company has for the policy. objectives. In determining their level good governance and business Ormat’s Anti-Corruption Committee of compensation, the Compensation Stock-based Awards practices. All of Ormat’s corporate Ormat has an Anti-Corruption holds the principle responsibility Committee considers a number governance policy documents can Committee composed of senior for managing the anti-corruption of factors such as the Company’s Ormat offers its employees stock- be found on our website on the management representatives training programs at the Company. performance and relative shareholder based awards according to its “Governance” page.89 All new Ormat from various disciplines who return, the value of similar incentive Incentive Compensation Plan. In employees and senior officers of the oversee implementation of the Ormat communicates its Anti- awards to the CEO and executive May 2018, Ormat’s shareholders Company must sign a compliance Anti-Corruption Policy including Corruption Policy clearly to its officers at comparable companies adopted the 2018 Incentive Plan, certificate stating their intention to the General Counsel and Chief employees as part of their employment and the awards bestowed by the which provides for grants of uphold these standards, as a condition Compliance Officer, Executive Vice contract and in dealings with the Company to the CEO and executive certain kinds of awards including of employment. President of Business Development organization, and the policy is publicly offices in past years. In addition, incentive stock options, non- and Sales and other members communicated on Ormat’s website at the Committee is responsible for qualified stock options, restricted Ormat operates in many countries that are designated by Company the following link.90 periodically reviewing and approving stock, stock appreciation rights, and conducts business around the management from time to time. aspects of the CEO and executive stock units, performance awards, world. Various laws require conduct Ormat’s Chief Compliance Officer All of Ormat’s new employees are officers’ compensation based on phantom stock, incentive bonuses in international business to meet reports directly to the CEO and Audit required to undergo ethics and incentive awards and opportunities, and other possible related certain standards. Ormat, including Committee of the Board of Directors corporate governance trainings that including cash-based and equity- dividend payments to employees its personnel and agents (wherever for certain matters, including those include, among other topics, trainings based awards and opportunities, of the Company, directors and they are located), is obligated to that pertain to anti-corruption. on how to identify corrupt practices any employment agreements and independent contractors. The comply with all applicable anti- Ormat’s Anti-Corruption Policy and/or bribery. The goal is to ensure severance agreements, change- 2012 Incentive Plan expired in corruption and anti-bribery laws, was initially adopted by the Board that all of Ormat’s employees fully in-control agreements, severance May 2018 with the adoption of the such as the U.S. Foreign Corrupt of Directors in 2016 and executive understand what constitutes a protection plans and change-in- 2018 Incentive Compensation Plan, Practices Act. The Anti-Corruption officers hold responsibility for daily corrupt practice or a bribe and to control provisions affecting the level of except for stock-based awards Policy applies to Ormat directors, implementation of the policy. become aware of how they are compensation and benefits, and any that were outstanding under the officers, employees, third-party expected to behave or handle special supplementary compensation 2012 Incentive Plan. representatives, partners, agents Directors, executive managers, ethical dilemmas according to the and benefits for the CEO and executive and any other providers of services employees, contractors or other Company’s guidelines and policies. officers. Furthermore, and as per SEC The 2018 Incentive Compensation to Ormat. The basic policy is simple: stakeholders are requested to

87 Including pursuant to the company’s equity-based plans. 89 https://www.ormat.com/en/company/welcome/governance/ 88 https://investor.ormat.com/Cache/1001250792.PDF?O=PDF&T=&Y=&D=&FID=1001250792&iid=4087066 90 https://www.ormat.com/Warehouse/userUploadFiles/Image/Anti-Corruption%20Policy.pdf

90 91 Insider Trading Policy encourage honest and ethical conduct, the Audit Committee of the Board of OUR BUSINESS, issue profitable stock offerings and plants that generate electricity utilizing to promote the protection and proper Directors. For all other officers and become a publicly traded Company “waste heat” from gas turbine-driven Ormat adopted an Insider Trading use of Ormat’s assets, to maintain the employees, the Code of Ethics Contact FINANCIAL on leading stock exchanges, such as compressor stations along interstate Policy in 2016 that is publicly available on confidentiality of information that is person is Ormat’s Secretary, except in PERFORMANCE the Tel Aviv Stock Exchange (TASE) natural gas pipelines, from midstream our website at the following link.91 The acquired in the course of business, to cases when it is deemed inappropriate since 199194 and the New York Stock and gas processing facilities, and from Insider Training Policy was established promote compliance with applicable to involve the Secretary, at which time AND ECONOMIC Exchange (NYSE) since 2004.95 other applications. A number of U.S. in order to promote compliance with laws and regulations and to encourage employees may file their requests with IMPACTS In addition, Ormat is part of the states, and to a certain extent the federal securities laws that prohibit individuals timely reporting of any illegal or ethical the Chairman of the Audit Committee. following indices: CRSP, Dow Jones, government, have recognized the with material, non-public information behavior. All of Ormat’s employees, Employees and officers are encouraged FTSE, Morningstar, MSCI, NASDAQ, environmental benefits of recovered from trading securities of the directors and officers are subject to the to consult with their direct manager Russell 2000, 2500 and 3000, S&P, energy-based power generation, with Company, providing such information Code, and the employees are expected regarding the appropriate course of ABOUT OUR BUSINESS TASE, Wilshire 5000, WisdomTree a number of states allowing utilities to unauthorized persons who may to adhere and comply with the Code action to address an ethical dilemma or and WisdomTree U.S. to include recovered energy-based trade securities of the Company based and are required to sign a compliance in addressing an instance of potential Ormat staunchly believes that as power generation in calculating their on the information and restrictions certificate confirming they have misconduct. Employees, directors and the provider of energy solutions, Our electricity segment is the core compliance with renewable portfolio on making recommendations or understood all of Ormat’s expectations. officers who fail to report unethical and namely renewable energy of our business, accounting for goals and incentives. expressing opinions as to buying, conduct are in violation of the Code solutions, we have a central role in 71 percent of our total revenues. selling, holding or engaging in In the Code, Ormat outlines its and consequences may be taken by the global economy and in ensuring The vast majority of revenue Generally, there is an increase in the use transactions with the Company’s expectations regarding honest Ormat as a result, depending on the the sustainable development of from this segment originates in of renewable energy solutions due to securities. As such, the policy restricts and candid conduct, which are severity of the incident. communities. The energy market is the United States – 60 percent various tax incentives for utilities, as well certain kinds of transactions that cornerstones of the way that Ormat one of the most significant factors - with the remaining 40 percent as the decline in the price of renewable involve Ormat’s securities and is conducts its business around the Ormat upholds a policy of no within the global economy as it coming from the rest of the world. solutions, such as for Solar PV. However, considered a supplement to other world. The Code outlines guidelines retaliation on any director, officer, or enables economic growth and According to the International one of the biggest challenges in the confidentiality or non-disclosure for handling of conflicts of interest employee by any other actor at the development, creates jobs, develops Geothermal Association (IGA), deployment of effective renewable agreements that the Company in the context of loans or corporate Company for reporting existing or critical infrastructure, generates long- geothermal power is generated in energy solutions is that the supply can issues. The policy is administered and opportunities, compliance with the potential violations of the Code. Any term value and enables the very nature 27 countries with a total installed be unstable (due to environmental or managed by Ormat’s Secretary, who is law, as well as regulations and laws director, officer or employee who is of our modern society. With traditional power generation capacity of atmospheric conditions). As a result, also the contact person for concerns that govern Ormat’s internal business involved in retaliation or who makes fossil fuel-based energy sources facing 14,600 MW as of the end of 2018.96 energy management, and especially or grievances regarding the policy. practices, such as details on the deliberately false reports may be increasing regulation and scrutiny from Having realized the importance energy storage, is becoming a key The policy applies to all of Ormat’s Foreign Corrupt Practices Act. The subject to serious disciplinary action governments, policymakers and the of renewable energy, including component in the future electrical employees, officers, directors, family Code also outlines how Ormat expects or sanctions. However, Ormat does general public, the renewable energy geothermal alternatives, various grid, which is why Ormat is actively members or controlled entities of any its employees, directors and officers seek to ensure that all such reports market is becoming increasingly governments have been preparing investing in the deployment and employee, officer or director of Ormat to handle the disclosure of sensitive are made in good faith. lucrative and in many respects is out- regulatory frameworks and policies, development of energy storage and companies, and consultants, advisors, Company information, engage in We also maintain an anonymous performing the “non-renewable” and providing incentives to develop management solutions. The Company’s agents, contractors, temporary, loaned, record-keeping and maintain an internal whistleblower ethics hotline for energy market economically. the sector, which Ormat views as a first real step into the energy storage contracted or seconded employees control structure, uphold restrictions reporting concerns or real breaches positive opportunity for its business. and management market was the or other persons who enter into a on the receipt of gifts, gratuities and of the Code at a toll-free number (in As a leading vertically integrated In addition and in the United States acquisition of Viridity Energy Inc. contractual agreement with Ormat. The entertainment, as well as relevant the U.S.): 1-866-294-5535 and at the Company primarily engaged in the in particular, a number of states and policy relates to the kinds of information aspects relating to ethical conduct that Company’s third-party whistleblower geothermal and recovered energy territories have renewable portfolio As a central player in the geothermal that can be considered material and are considered during the employment website at www.ethicspoint.com. business, Ormat plays a significant role goals or laws that encourage or and renewable energy markets through non-public, as well as the prohibited and hiring processes. within the global renewable energy require utilities to generate or buy a our diverse global presence, we plan activities for those whom are exposed Based on the information collected market generally, and the geothermal percentage of their electricity from to continue to develop our business to such information with regards to Ormat’s full Code of Business Conduct through these communications energy market particularly. renewable energy or recovered and seek out relevant opportunities to trading securities. Employees, directors and Ethics and the requirements and channels, we received one grievance Renewable energy is sustainable and energy sources. improve our economic performance and officers are required to sign and expectations of employees and senior during 2018. However, following clean, emitting negligible amounts for shareholders, while also making acknowledge the policy as a condition management outlined therein can be internal investigation into the nature of CO2 and not requiring the use of In addition to our geothermal power meaningful and effective contributions to their employment with Ormat. found at the following link.93 of the grievance, it was determined non-renewable energy sources. These generation activities, we pursue to the renewable energy market. Our that it was nonmaterial and no further environmental benefits have led major relevant recovered energy-based business strategy is outlined below. Ethical Conduct at Ormat Whistleblower Policy action was taken. countries to focus their efforts on the power generation opportunities in development of renewable energy North America and other locations. We Ormat upholds a Code of Business The contact person for ethical concerns sources in general, and geothermal believe recovered energy-based power OUR BUSINESS STRATEGY Conduct and Ethics that was last varies for different employees according energy, specifically. As such, Ormat generation (known as “REG” in other amended in January 2013.92 The to their position within the Company. has and continues to see significant Company publications) will ultimately Our strategy is to continue building purpose of our Code of Business The contact person for directors and economic benefits from its business benefit from the efforts to reduce GHG a geographically balanced portfolio Conduct and Ethics is to promote and senior executives is the Chairman of activities, allowing the Company to emissions. We have built 23 power of geothermal and recovered energy

91 https://www.ormat.com/Warehouse/userUploadFiles/Image/Insider%20Trading%20Policy.pdf 94 Under the ticker “ORA”. 92 The guidelines for ethical conduct were originally set when Ormat was established in 1965 as Ormat Turbines Ltd. (later renamed Ormat Industries). They were formalized in 2004 95 Under the ticker “ORA”. when Ormat was officially listed for trading on the New York Stock Exchange. 96 https://www.geothermal-energy.org/beyond-electricity-geothermal-energy-development-is-picking-up/ 92 93 www.ormat.com/Warehouse/userUploadFiles/Image/CODE%20OF%20BUSINESS%20CONDUCT%20AND%20ETHICS.pdf 93 assets, and to continue to be a leader in information on our economic and as a major expansion of third Direct economic value generated, distributed and retained (USD$ 2018 (US$ 2017 (US$ the geothermal energy market with the financial performance. We regularly phase at our McGinness Hills thousands) thousands) thousands) objective of becoming a leading global hold earnings calls that all of our complex increasing the complex provider of renewable energy. Since global shareholders can access capacity by 48MW to a total of 2015, we have implemented a number online along with the Company’s 140MW, expansion at our Olkaria Revenue100 (sales and other income) 719,267 692,812 of the elements of a new multi-year earnings call presentation. In III complex in Kenya that increased strategic plan. The strategic plan was addition, our Investor Relations team the generating capacity by 11 MW approved and is consistently reviewed issues email notifications, alerts and to a total of 150 MW, and the Operating costs (excluding employee–related expenses)101 269,323 260,383 in consultation with Ormat’s senior news regarding Ormat’s financial completion of the third phase at management team. The strategic plan is performance or any major Company the Sarulla complex in Indonesia developed based on an understanding events on a regular basis through a list that allowed the plant to reach Employee wages and benefits102 113,343 108,043 of our risks and opportunities – an of registered subscribers. In all of our its full generating capacity of assessment that is conducted with communication and interaction with 330 MW. The expansion and assistance from external consultants shareholders, we aim to provide top- improvement of our existing power Payments to providers of capital103 80,698 60,995 – and our professional expertise and of-the-line service while adequately plants contributes to helping us knowledge about the renewable and appropriately addressing their achieve our strategic goals, but energy market. We expect the plan to requests. also significantly contributes to our Payments to governments, by country104 18,023 21,878 evolve over time in response to market revenues and economic success conditions and other factors. over time. ECONOMIC PERFORMANCE IN 2018 Community investments 726 236 The data presented in the table below MANAGEMENT OF ECONOMICS In 2018, Ormat continued to details the direct economic value AND FINANCE AT ORMAT experience strong revenues and generated, distributed and retained Economic Value Distributed 482,118 451,535 operational growth. Overall, by the Company in 2017-2018. More The topics of economics and total revenues from all segments information and data regarding our finance at Ormat is managed by increased by approximately US$ 26 financial performance can be found Economic Value Retained 237,149 241,277 the Company’s Chief Executive million – representing an increase of in our Annual Report filed with the Officer, Chief Finance Officer and approximately 4 percent compared SEC for 2018, which can be accessed the Finance Department’s managers to our revenues in 2017. These at the following link.99 and employees. These individuals are advances are built on our well- responsible for reporting to the Board established energy assets with of Directors and shareholders, through long-term PPAs through which we The following presents our net revenues for 2017-2018, comparatively, according to geographical location. our Investor Relations department sell electricity primarily to large regarding Ormat’s economic utility clients and the provision of performance and regarding any advanced energy management and relevant financial issues. Furthermore, storage solutions. Location 2018 (US$ 2017 (US$ and together with management, thousands) thousands) these individuals are responsible for During 2018, the electrical preparing Ormat’s annual, quarterly generating capacity of facilities United States 328,606 301,132 and periodic financial and annual that we own and operate Kenya 119,094 110,243 reports that are filed with the expanded by approximately 115 Securities and Exchange Commission MW from 795 MW at YE 2017 to Turkey 168,699 125,166 (SEC). All of our SEC filings, including 910 MW, representing a growth Guatemala 27,975 27,991 the Company’s 10K, 10Q and other rate of nearly 15 percent in our relevant documents are available to generating capacity. The growth Other foreign countries 74,893 128,280 the public both on the SEC website97 in the electricity segment is due Consolidated Total 719,267 692,812 and on our Investor Relations page.98 to a number of factors, namely the completion of a number of Our shareholders are consistently expansion projects in our existing provided with current and exact geothermal power plants, such

97 https://www.sec.gov/ 100 “Revenue” is defined as net sales plus revenues from financial investments and sales of assets. For Ormat, revenues are generated from our electricity, product and 98 https://investor.ormat.com/Docs other segments. Net sales is calculated as gross sales from products and services minus returns, discounts and allowances. 99 https://investor.ormat.com/Doc/Index?did=50940528 101 “Operating costs” refers to operating expenses including cost of revenues, research and development (R&D), selling and marketing, and general and administrative expenses. 102 “Employee wages and benefits” refers to total payroll and social benefits less non-operating expenses such as the amortization of employees’ stock options. 103 “Payments to providers of capital” refers to interest net of interest capitalized and cash dividends paid. 104 “Payments to governments, by country” refers to income taxes, net paid by Ormat. Ormat has not reported this data according to country in the current report, but 94 plans to do so in forthcoming reports. Ormat did not pay any penalties in 2018 or 2017. 95 OUR RISK MANAGEMENT management of those risks. to be affected by rising sea levels. LOANS AND FINANCIAL as well as the economic structure Aside from tax benefits, a number of APPROACH ASSISTANCE RECEIVED of the electricity generation Ormat’s projects are funded with financial Relevant Risks In terms of risk management in the FROM GOVERNMENTS AND market in that country. incentives and loans from prominent As a global Company and publicly geothermal exploration process, DEVELOPMENT BANKS There are a number of governmental government and multilateral backed traded entity, we place equal weight Our main business risks are detailed Ormat’s Resource Department is incentives, such as tax benefits or development financial institutions, such on the management of pertinent in our 10Q report filed with the SEC. comprised of an experienced team Ormat interacts directly with subsidies, for renewable energy as the Overseas Private Investment risks and the pursuit of relevant Our 10Q report for 2018 can be of geologists, geophysicists and governments, their agencies and generation that contribute to the Corporation (OPIC), the German revenue generation opportunities. Our accessed at the following link.105 engineers who are dedicated to development banks in the context attractiveness of our solutions. Investment Corporation (DEG.)108, the executive management team works assessing, exploring, developing of constructing and operating Ormat is also granted relevant tax Clean Technology Fund (“CTF”), and the in close cooperation with all of our We consider potential risks from and managing geothermal our power plants around the benefits due to its development of Asian Development Bank. major operational locations to identify climate change and to the environment reservoirs in the context of our world. Our methods and types of the renewable energy sector. More and deal with relevant risks and to according to the precautionary projects or potential projects. The communication and engagement information and a full assessment implement appropriate methodologies approach for risk management with risk management process for the with government entities varies of the relevant tax benefits is for addressing such risks. regards to our products and services.106 exploration phase begins with in- based on the legal and regulatory available in our Annual Report at In identifying relevant risks from depth research on the geothermal framework in the relevant country, the following link.107 As such, our risk management process climate change that could potentially reservoir including where the has several key levels of analysis: by our result in substantive changes to our reservoir is located in the potential project teams and major operations; by operations, revenue, and expenditures, plant area in order to identify and Details on the projects and the loans: Company management and through we seek to minimize these risks and assess early in the process potential assignment of responsibilities; through address them either through our model physical, social or environmental our management of know-how and of engagement, physical infrastructure risks. If a site is deemed to be Name of Entity Type of Financing Project skills relevant to the various disciplines and operations, or in the on-going relevant, the Resource Department that help us achieve our targets as a management and operations of our begins the surface exploration vertically-integrated Company; and plants and our Company. process at the site whereby they OPIC Project finance loan Platanares, Honduras through other relevant controls and initiate drilling in slim holes to measures for our business, such as Based on our assessment as of 2018, determine the exact location of the OPIC Senior secured project finance loan Olkaria III & IV audit and regulatory functions. Ormat is not exposed to any special geothermal reservoir and where to physical risk from climate change locate the plant. At each stage of the DEG Credit agreement Olkaria III, Kenya Our methodology for identifying as the power plant’s productivity process, the Resource Department relevant risks involves mapping the is not expected to be materially and Business Development teams control environment of our corporate affected as a result of climate assess the level of anticipated risk U.S. DOE Project finance loan - ARRA Section 1603 Neal Hot Springs, Oregon, U.S. and business infrastructure including change. Our equipment is designed from pursuit of the geothermal the main activities that we pursue. to withstand extreme weather resource as compared to the actual U.S. DOE and John OFC-2 Geothermal Portfolio, Project finance loan ARRA Section 1705 Our business units are categorized events and is largely independent geothermal resource available and Hancock Nevada, U.S. and mapped into several tiers, and and isolated from weather-related the potential for energy generation. within these tiers we map relevant impacts. Furthermore, as a resource, business processes. In order to geothermal energy is not dependent understand relevant risks for each on weather-related impacts as its Ormat does not directly receive which the national electrical Company create jobs and strengthen the country’s of these processes, we develop risk heat source is located underground; government grants and benefits from of Guatemala, Instituto Nacional de energy sector by helping to diversify its ranking criteria that look at both the however, rising ambient temperatures governments. Instead the subsidiary Electrificación (INDE), owned three energy sources and move away from level of impact and the likelihood of due to climate change-related impacts companies that are established in percent. fossil-fuel to renewable energy and non- occurrence. Based on this system, may have effects on electricity order to run and operate our power renewable domestic sources. we conduct our risk assessment generation capacity in geothermal plants are able to receive subsidies among the various business units and units. Additionally, Recovered Energy from governments. More information DEVELOPING RENEWABLE ENERGY Furthermore, and as outlined in the operations through either meetings units may be affected when winter on the relevant incentives received AND CRITICAL INFRASTRUCTURE “Supporting and Shaping Sustainable with the process owners or through temperatures are higher than average by our subsidiary companies can be Communities and Futures” Chapter questionnaires and distribution of as it reduces the gas flow and, like found in the Annual Report at the The presence of Ormat’s operations of this report, in every location where a list of risks to relevant parties. The all structures, power plants are likely following link.109 around the world, including in various Ormat operates, our presence has identified risks are further ranked and to be affected by extreme weather developing countries, has an inherently generated significant positive impacts validated by the process owners and occurrences such as hurricanes and In the vast majority of cases positive impact on environmental, through the creation of economic relevant members of management tornadoes, which are unavoidable. governments and governmental economic and social levels, in that the opportunities, development and resulting in a risk profile and priorities With regards to rising sea levels, entities are not part of Ormat’s projects provide a valuable source employment benefits. For instance, (per business unit/business process), almost all of our power plants are shareholding structure. As of 2018, the of renewable energy to support the geothermal energy provides eventually resulting in our plan for located in areas that are not expected only case was the Zunil power plant, in country’s infrastructure development, numerous benefits to the U.S.

105 https://investor.ormat.com/Cache/399112405.pdf 107 https://investor.ormat.com/Doc/Index?did=50940528 106 The precautionary approach was introduced by the United Nations in Principle 15 of ‘The Rio Declaration on Environment and Development’. It states: ‘In order to 108 Deutsche Investitions- und Entwicklungsgesellschaft. protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible 109 https://investor.ormat.com/Doc/Index?did=50940528 96 damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.’ 97 economy, as was outlined in a recent the level of critical infrastructure activities as detailed above in the ORMAT’S the technical specifications that commitments and expectations report by the Geothermal Energy – including roads and electricity “Supporting and Shaping Sustainable are inherent in the construction that extend to Ormat’s partners, Association (GEA).110 According to transmission lines – that is needed Communities and Futures” Chapter. SUPPLY CHAIN & of complex geothermal and subcontractors and suppliers, with the report, the economic benefits of in order to implement the project. PROCUREMENT Recovered Energy power plants, the intention of identifying, to the a typical 30 MW geothermal plant This infrastructure remains a valuable we are often required to import best of our ability and knowledge, can provide about US$150-225 resource for local communities ENVIRONMENTAL REGULATIONS PRACTICES materials, parts and supplies that sources of the relevant minerals under million in inbound capital investment, regardless of the existence of the SUPPORTING OUR BUSINESS are not typically manufactured the Conflict Minerals Rule, i.e. tin, create about 50 long-term jobs in project, such as is the case with the locally. tantalum, tungsten and gold, in the order to operate the plant, resulting development of local roads, water As a renewable energy Company, As a global Company with components and materials supplied in surpluses in property taxes and and electricity distribution systems. Ormat adheres to and benefits from operations in a number of different We categorize our work with to us and which are necessary to the royalties to the land owners as well a number of regulations that promote countries, Ormat has a diverse suppliers according to the level production or functionality of our as other social and economic benefits In addition to these significant renewable energy either through and dispersed supply chain that of spend with the supplier over products. Our policy fully supports for the local community. indirect economic impacts, we play different incentive models, and we responsibly manage through the fiscal year. As such, Ormat the intention of the Conflict Minerals an active role in communities local to increasingly, by requiring the use of our Procurement Department. encourages work with smaller Rule, which is not to economically Furthermore, and starting from the all our operations, including through renewable energy in countries’ energy The Procurement Department is suppliers that are categorized disadvantage areas of conflict in the exploration phase for geothermal philanthropic contributions and mixes. responsible for selecting, managing by the Procurement Department Democratic Republic of Congo and resources, Ormat attempts to assess various community development and assessing our supply chain as according to the level of spend and surrounding countries, but rather well as determining the conditions volume of business. to significantly reduce or eliminate for working with various suppliers. funding of armed groups that have a Some of the relevant environmental laws, regulations and incentives in our countries of operation are outlined in the below table.111 Our “Code of Business Conduct and record of human rights abuses in the Ormat engages with suppliers and Ethics” outlines our guidelines for region. As such, we have an expressed subcontractors for two main purposes: directors, officers and employees commitment to human rights and our for provision of materials, parts and that deal with or come into direct understanding of the impact of our Location Relevant Environmental Regulations services in manufacturing through contact with suppliers. Some of activities is realized in our continued our Procurement Department and the conditions that we outline efforts to perform effective due • Public Utility Regulatory Policies Act (PURPA) for the construction, operation and include avoiding conflicts of diligence on the sourcing practices • Public Utility Holding Company Act (PUHCA) maintenance of our power plants interest in dealing with suppliers, within our supply chain. Our due United States • Federal Power Act (FPA) around the world. In addition, Ormat relevant anti-trust considerations diligence processes are materially • California Environmental Quality Act engages a small amount of service and maintaining the confidentiality based on the internationally- • National Environmental Policy Act (NEPA) providers – such as lawyers, consultants of our terms and conditions with recognized Conflict Minerals due and accountants – who advise suppliers and our expectation of diligence framework introduced • General Electricity Law of 1996, Decree 93-96 Company management and the Board directors, officers and employees by the Organization for Economic • Technical Norms for the Connection, Operation, Control and Commercialization Guatemala of Directors on certain issues. to deal fairly with suppliers. Cooperation and Development of Renewable Distributed Generation and Self-producers Users with Exceeding Furthermore, in our “Integrated (OECD). A full description of our Amounts of Energy As such, Ormat’s supply chain Quality, Environment, Health & Conflict Minerals due diligence consists of four different types of Safety System Policy”, we outline activities can be found at our website Kenya • Kenyan Energy Act suppliers: electrical parts suppliers, our commitment to treating at the following link.113 suppliers of materials, suppliers our suppliers, subcontractors of parts and service providers. and business partners with • Law of Electrical Industry (Decree 404-2013) Honduras As of 2018, Ormat worked with the utmost respect, while also • Law of Incentives for Renewable Energy Projects approximately 4,800 different assessing, in general, that those suppliers. Ormat did not experience suppliers, subcontractors and any significant changes to the business partners uphold relevant organization that affected its supply social, environmental and health chain in 2018. and safety standards for their employees. Furthermore, our Company has operations in over ten different Ormat has adopted a Conflict Minerals countries, and as a result, we Policy, in compliance with the SEC’s work with suppliers from around Dodd-Frank Wall Street Reform and the world. Where possible, Consumer Protection Act (known Ormat encourages and seeks as “the Conflict Minerals Rule”). Our out opportunities to work with Conflict Minerals Policy, available at local suppliers. However, due to the following link112, defines principles,

110 Source: http://www.geo-energy.org/reports/2017/GEOTHERMAL%20IS%20GOOD%20FOR%20AMERICA.pdf 112 https://www.ormat.com/Warehouse/userUploadFiles/Image/Ormat%20Conflict%20Minerals%20Policy.pdf 111 More information on the environmental regulations that Ormat adheres to are outlined in our Annual Report (Form 10-K). 113 https://investor.ormat.com/Doc/Index?did=52115999

98 99 PROVIDING with our various customers and Users Workshop, attended by over DATA PRIVACY AND not experience any significant we work to provide them at all 50 representatives (operational breaches or cybersecurity events, EXCELLENT times with excellent and reliable managers, maintenance managers CYBERSECURITY nor did the organization receive any AND RELIABLE customer service. and senior operators) of the 35 power FOR OUR substantiated complaints regarding plants Ormat supplied in the country. breaches of customer data or CUSTOMER Customer service at the Company is STAKEHOLDERS privacy, in 2018. SERVICE managed by our Customer Service • General customer service requests – Group, which is part of the Business we answer general requests submitted Development and Sales Group. through other channels such as Ormat is the world’s only Our Customer Service department ones directed to our international Ormat is committed to ensuring vertically-integrated geothermal collects, addresses and manages Customer Service department the data privacy of all its Company and we are responsible relevant requests from our various through our website on the “Contact directors, officers, employees, for exploring, drilling, designing, customers around the world. It Us” page which offers an online form customers and other relevant building, manufacturing, owning, is important to note that Ormat and other forms of contact: stakeholders. We have data financing and operating geothermal prides itself on its strong base of privacy and cybersecurity power plants. Our customers repeat customers, which is due to Address | Ormat Technologies Inc., policies, as well as an “Electronic benefit from our modular, flexible the strength of our energy solutions 6140 Plumas Street, Reno, NV 89519- Communication Policy” that approach and our extensive and technology and the quality of 6075, U.S. manages all of the security experience in applying a variety of our customer service relations that procedures for Ormat’s internal different products and solutions – all is characterized by regular and Tel +1-775-356-9029 stakeholders. The referred to designed for simple transportation, productive communications with Fax +1-775-356-9039 policy includes our expectations installation, operation and ongoing customers. Email [email protected] of employees regarding use of maintenance. Ormat has a proven, Company equipment, authorized reliable track record of delivering on- Some of these methods of Ormat’s policy is to address all of use of identification information, time, on-budget and with optimal communication include: customer service requests in a timely password policies, and how technical solutions. We manufacture and adequate manner so as to ensure electronic messaging and most of the power generating unit • Continuous contact with direct the continued satisfaction of our documents should be properly equipment componentry used customer service representatives - global customer base. handled. The policy is enforced in our power plants. We acquire each customer has direct contact to by our Information Technology any equipment we do not build the team which they can contact at department and all internal ourselves from selected, top-quality, any time for any issue that might arise. stakeholders are requested to trusted suppliers. Ormat is ISO 9001 Also, team members periodically acknowledge the policy in the and ISO14001 certified, with our initiate contact with each of their context of their employment manufacturing facilities also meeting customers to maintain ongoing with Ormat. the high standards of the American dialog. Society of Mechanical Engineers In addition, we work to ensure that (ASME) and the European Pressure • Newsletters – we regularly publish all of our information technology Equipment Directive (PED). Many newsletters in which we suggest systems are secured in terms of their electric utilities around the world recommendations for different types cybersecurity aspects. Ormat has have also recognized Ormat as an of improvements to products and an advanced policy for managing approved supplier. Ormat’s design services (for example, for increasing cybersecurity risks that is overseen and manufacturing standard meets the efficiency and generating by the Company’s Information the requirements of the applicable capacity of our plants). Technology department. In our risk European Commission directives management strategy, we take into and therefore we are entitled to • Workshops – Ormat organizes account threats and vulnerabilities in carry the CE marking that denotes and hosts several different client information, information technology conformity with health, safety and workshops in different countries and communications systems environmental protection standards periodically. The workshop aims that we use on a regular basis to for products sold within the to address different issues such as deliver our products and services, European Economic Area. improvements in operations, project facilities or other assets that are management, construction and a part of our cyber-infrastructure, Due to Ormat’s nature as a trends and innovations in Ormat’s and outlines guidelines for vertically-integrated Company, we technology. One example in 2018 was cybersecurity management in the have a number of points of contact our first annual Turkey Geothermal Company. As a result, Ormat did

100 101 CHAPTER VII. GRI CONTENT INDEX

For the GRI Content Index Service, GRI Services reviewed that the GRI content index is clearly presented and the references for all of the disclosures included align with the appropriate sections in the body of the report.

Tungsten Mountain geothermal power plant, NV, U.S., 27 MW

102 103 GRI Standards Disclosure Page Number/Chapter Name/Link Omission GRI Standards Disclosure Page Number/Chapter Name/Link Omission

GRI 101: Foundation 2016 102-9: Supply chain ‘Ormat’s Supply Chain & Procurement Practices’ (pg. 99), ‘Subcontractors’ (pg. 61) General Disclosures 102-10: Significant changes to the ‘Ormat’s Supply Chain & Procurement organization and its supply chain Practices’ (pg. 99) Organizational Profile GRI 102: General 102-11: Precautionary principle or ‘Our Risk Management Approach’ (pg. 96), 102-1: Name of the organization ‘Ormat: What We Do’ (pg. 12) Disclosures 2016 approach ‘Relevant Risks’ (pg. 96) 102-2: Activities, brands, products and ‘Ormat at a Glance’ (pgs. 8-9), ‘Ormat: What services We Do’ (pg. 12), ‘About Our Business’ (pg. 12), 102-12: External initiatives ‘External Initiatives’ (pg. 24) ‘Geothermal Power Plants’ (pg. 13), ‘Recovered Energy Power Plants’ (pg. 13), ‘Storage & 102-13: Membership of associations ‘Ormat’s Memberships of Association’ (pg. 24) Energy Management’ (pg. 13), ‘Our History and Key Experience’ (pg. 14), ‘Mitigating Strategy Climate Change Risks While Encouraging Renewable Energy Solutions’ (pg. 34), ‘About GRI 102: General 102-14: Statement from senior ‘Generating for Generations’ (pg. 4) Our Geothermal Solutions’ (pg. 34), ‘About Disclosures 2016 decision-maker Our Recovered Energy Solutions’ (pg. 36), ‘About Our Energy Storage and Energy Management Solutions’ (pg. 38), ‘About Our Ethics and Integrity Business’ (pg. 93) 102-16: Values, principles, standards ‘An Organization Shaped by Values’ (pgs. and norms of behavior 16-17), ‘ Our Five Core Values’ (pgs. 16-17), 102-3: Location of headquarters ‘Ormat at a Glance’ (pgs. 8-9), ‘Our History and 102-17: Mechanisms for advice and ‘Our People: Employment and Skill Key Experience’ (pg. 14) GRI 102: General concerns about ethics Development at Ormat’ (pg. 58), ‘Our Disclosures 2016 Corporate Governance Guidelines’ (pgs. 102-4: Location of operations ‘Ormat Presence’ (pgs. 10-11), ‘Our History 86-87), ‘Ensuring a Corruption-Free Work and Key Experience’ (pg. 14), ‘Information GRI 102: General Environment’ (pg. 91), ‘Whistleblower Boundaries of This Report’ (pg. 30) Disclosures 2016 Policy’ (pg. 92) 102-5: Ownership and legal form ‘Ownership Structure’ (pg. 14), ‘Beneficial Ownership’ (pgs. 14-15) Governance

102-18: Governance structure Ormat’s Corporate Governance 102-6: Markets served ‘Ormat at a Glance’ (pgs. 8-9), ‘Ormat Presence’ Structure’ (pg. 87), ‘Ormat’s Board (pgs. 10-11), ‘Ormat: What We Do’ (pg. 12), of Directors’ (pgs. 87-88), ‘Ormat’s ‘About Our Business’ (pg. 12), ‘Our History and Board of Directors Committees’ (pg. Key Experience’ (pg. 14), ‘Our Customers’ (pg. 88), ‘Ormat’s Executive Management’ 14), ‘About Our Business’ (pg. 93), ‘Our Business (pg. 89) Strategy’ (pgs. 93-94)

102-7: Scale of the organization ‘Ormat at a Glance’ (pgs. 8-9), ‘Ormat Presence’ 102-23: Chair of the highest ‘Ormat’s Board of Directors’ (pgs. 87-88) (pgs. 10-11), ‘Net Revenues by Geographical GRI 102: General governance body Location and Business Segment’ (pg. 12), Disclosures 2016 ‘Our Employment Framework’ (pgs. 58-59), ‘Economic Performance in 2018’ (pgs. 94-95) 102-26: Role of the highest ‘Ormat’s Corporate Governance governance body in setting Structure’ (pg. 87), ‘Ormat’s Board of purpose, values and strategy Directors’ (pgs. 87-88) 102-8: Information on employees and ‘Ormat at a Glance’ (pgs. 8-9), ‘Our other workers Employment Framework’ (pgs. 58-59), ‘Equality in Employment at Ormat’ (pgs. 59- 102-33: Communicating critical ‘Whistleblower Policy’ (pg. 92) 61), ‘Subcontractors’ (pg. 61) concerns

104 105 GRI Standards Disclosure Page Number/Chapter Name/Link Omission GRI Standards Disclosure Page Number/Chapter Name/Link Omission

Stakeholder Engagement 102-47: List of material topics ‘Our Strategy – Defining What’s Material to Ormat’ (pg. 21) 102-40: List of stakeholder groups ‘Stakeholder Groups Engaged by the Organization’ (pg. 18) 102-48: Restatements of information ‘About This Report’ (pg. 30)

102-41: Collective bargaining ‘Collective Bargaining Agreements’ 102-49: Changes in reporting ‘About This Report’ (pg. 30) agreements (pg. 61)

102-42: Identifying and selecting ‘Knowing Our Impacts – Stakeholder 102-50: Reporting period ‘About This Report’ (pg. 30) stakeholders Engagement Strategy’ (pgs. 18-19), ‘Our Stakeholders’ Key Interests and Concerns’ (pg. 20), ‘Our Strategy – 102-51: Date of most recent report ‘About This Report’ (pg. 30) Defining What’s Material to Ormat’ (pg. 21), ‘Supporting and Shaping GRI 102: General 102-52: Reporting cycle ‘About This Report’ (pg. 30) Sustainable Communities and Futures’ Disclosures 2016 (pgs. 74-75) 102-53: Contact person for ‘Contact Point for Questions GRI 102: General 102-43: Approach to stakeholder ‘Our Approach to Stakeholder questions regarding the report Regarding This Report’ (pg. 30) Disclosures 2016 engagement Engagement’ (pgs. 18-19), ‘Our Stakeholders’ Key Interests and Concerns’ (pg. 20), ‘Our Strategy – 102-54: Claims of reporting ‘About This Report’ (pg. 30) Defining What’s Material to Ormat’ in accordance with the GRI (pg. 21), ‘Supporting and Shaping Standards Sustainable Communities and Futures’ (pgs. 74-75) 102-55: GRI content index ‘GRI Content Index’ (pg. 102)

102-44: Key topics and concerns ‘Our Stakeholders’ Key Interests and raised Concerns’ (pg. 20), ‘Our Strategy – 102-56: External assurance ‘About This Report’ (pg. 30) Defining What’s Material to Ormat’ (pg. 21), ‘Our Strategic Sustainability Commitments and Sustainability Plan’ (pgs. 25-27), ‘Supporting and Shaping Material Topics Sustainable Communities and Futures’ (pgs. 74-75) GRI 200 Economic Standards Series

Reporting Practice Economic Performance

102-45: Entities included in the ‘About This Report’ (pg. 30), 103-1: Explanation of the material ‘About Our Business’ (pg. 93) consolidated financial statements ‘Information Boundaries of This topic and its Boundaries Report’ (pg. 30)

103-2: The management approach ‘About Our Business’ (pg. 93), GRI 103: GRI 102: General and its components ‘Management of Economics and Management Disclosures 2016 Finance at Ormat’ (pg. 94) Approach 2016 102-46: Defining report content ‘About This Report’ (pg. 30), and topic Boundaries ‘Information Boundaries of This Report’ 103-3: Evaluation of the ‘About Our Business’ (pg. 93), ‘Our (pg. 30) management approach Business Strategy’ (pgs. 93-94), ‘Our Risk Management Approach’ (pg. 96)

106 107 GRI Standards Disclosure Page Number/Chapter Omission GRI Standards Disclosure Page Number/Chapter Name/ Omission Name/Link Link

201-1: Direct economic value ‘Economic Performance in 2018’ Reliability of Ormat’s Service generated and distributed (pgs. 94-95)

103-1: Explanation of the material ‘Providing Excellent and Reliable 201-4: Financial assistance ‘Loans and Financial Total monetary value of topic and its Boundaries Customer Service’ (pg. 100) received from government Assistance Received financial assistance received from Governments and by the organization from any GRI 201: Development Banks’ (pg. government during the reporting 97) period. This data is omitted due 103-2: The management approach ‘Providing Excellent and Reliable Economic GRI 103: to confidentiality constraints as and its components Customer Service’ (pg. 100) Performance Management government entities are clients 2016 Approach 2016 or parties otherwise involved in Ormat’s renewable energy projects. Therefore, the Company considers 103-3: Evaluation of the ‘Providing Excellent and Reliable some of the information required management approach Customer Service’ (pg. 100) by the standard to be proprietary information that has strategic value and therefore it is not disclosed. Reliability of Ormat’s Service ‘About Our Geothermal Solutions’ (pg. 34), ‘ About Our Recovered Innovation in Products & Services Energy Solutions’ (pg. 36), ‘About Our Energy Storage and Energy 103-1: Explanation of the ‘Our Strategic Sustainability Non-GRI Material Management Solutions’ (pg. 38), material topic and its Commitments and Topic ‘Providing Excellent and Reliable Boundaries Sustainability Plan’ (pgs. 25- Customer Service’ (pg. 100) 27), ‘About Our Business’ (pg. 93)

103-2: The management The management approach and approach and its its components for this material components issue were not provided as quality Customer Service information was unavailable. GRI 103: We intend to expand on our 103-1: Explanation of the material ‘Providing Excellent and Reliable Management approach to this material issue in topic and its Boundaries Customer Service’ (pg. 100) Approach 2016 forthcoming reports.

GRI 103: 103-2: The management approach ‘Providing Excellent and Reliable 103-3: Evaluation of the The management approach and Management and its components Customer Service’ (pg. 100) management approach its components for this material Approach 2016 issue were not provided as quality information was unavailable. 103-3: Evaluation of the ‘Providing Excellent and Reliable We intend to expand on our management approach Customer Service’ (pg. 100) approach to this material issue in forthcoming reports. Customer Service ‘Our Approach to Stakeholder Engagement’ (pgs. 18-19), ‘Our Ensuring innovation in ‘Our Strategic Sustainability Stakeholders’ Key Interests and products & services that Commitments and Non-GRI Material Non-GRI Material Concerns’ (pg. 20), ‘Providing Ormat offers its customers Sustainability Plan’ (pgs. Topic Topic Excellent and Reliable Customer 25-27) Service’ (pg. 100)

108 109 GRI Standards Disclosure Page Number/Chapter Name/ Omission GRI Standards Disclosure Page Number/Chapter Name/Link Omission Link

Market Presence GRI 300 Environmental Standards Series

103-1: Explanation of the ‘An Organization Shaped by Local Materials material topic and its Employment’ (pg. 65) Boundaries 103-1: Explanation of the material ‘Waste, Material Management and topic and its Boundaries Recycling’ (pg. 48), ‘Waste, Material GRI 103: 103-2 The management ‘An Organization Shaped by Local Management and Recycling at Our Management approach and its Employment’ (pg. 65) Facilities and Power Plants’ (pg. 48), Approach 2016 components ‘Waste and Material Management at Our Manufacturing Facilities, Offices 103-3 Evaluation of the ‘An Organization Shaped by Local and Workshops’ (pgs. 48-49), ‘Waste management approach Employment’ (pg. 65) and Material Management at Our Power Plants’ (pg. 50) 202-2: Proportion of ‘An Organization Shaped by Local GRI 202: Market senior management hired Employment’ (pg. 65) Presence 2016 from the local community 103-2: The management approach ‘Waste, Material Management and Indirect Economic Impacts and its components Recycling’ (pg. 48), ‘Waste, Material Management and Recycling at Our 103-1: Explanation of the ‘Our People: Employment and Facilities and Power Plants’ (pg. 48), material topic and its Skill Development at Ormat’ (pg. ‘Waste and Material Management at GRI 103: Boundaries 58), ‘Supporting and Shaping Our Manufacturing Facilities, Offices Management Sustainable Communities and and Workshops’ (pgs. 48-49), ‘Waste Approach 2016 Futures’ (pgs. 74-75), ‘About Our and Material Management at Our Business’ (pg. 93) Power Plants’ (pg. 50) GRI 103: Management 103-2: The management ‘Our Goals and Guideposts’ (pg. 74), 103-3: Evaluation of the ‘Waste, Material Management and Approach 2016 approach and its ‘Understanding and Uniqueness’ management approach Recycling’ (pg. 48), ‘Waste, Material components (pg. 74), ‘Social Action Plans’ (pg. Management and Recycling at Our 74) Facilities and Power Plants’ (pg. 48), ‘Waste and Material Management at 103-3: Evaluation of the ‘Listening Means Learning’ (pg. 75) Our Manufacturing Facilities, Offices management approach and Workshops’ (pgs. 48-49), ‘Waste and Material Management at Our 203-1: Infrastructure ‘Developing Renewable Energy Extent of development of Power Plants’ (pg. 50) investments and services and Critical Infrastructure’ (pgs. significant infrastructure supported 97-98), ‘Ormat’s Contribution to investments and services the United Nations’ Sustainable supported. The organization Development Goals (SDGs)’ (pgs. does not disclose specific 25-27), ‘Supporting and Shaping information regarding the size, GRI 203: Sustainable Communities and cost and duration of each of 301-1: Materials used by weight or ‘Waste, Material Management and Indirect Futures’ (pgs. 74-75), ‘About Our its significant infrastructure volume Recycling at Our Facilities and Power Economic Business’ (pg. 93) investment projects or services Plants’ (pg. 48), ‘Waste and Material Impacts 2016 provided due to confidentiality Management at Our Manufacturing constraints. Ormat considers GRI 301: Facilities, Offices and Workshops’ this proprietary information Materials 2016 due to the fact that the (pgs. 48-49), ‘Waste and Material development of renewable Management at Our Power Plants’ energy infrastructure projects (pg. 50) is its core business.

110 111 GRI Standards Disclosure Page Number/Chapter Name/Link Omission GRI Disclosure Page Number/Chapter Omission Standards Name/Link

Brine & Steam Management 302-1: Energy consumption ‘Energy Consumption in Total fuel consumption within the organization within the organization the Organization’ (pg. 43) from renewable sources. As of the publication 103-1: Explanation of the material topic ‘About Our Geothermal Solutions’ (pg. of this report, the organization does not and its Boundaries 34), ‘Management of the Geothermal By- consume fuel from renewable sources and Products and Water Resources’ (pg. 45) therefore this specificinformation is not applicable.

Heating, cooling and steam energy 103-2: The management approach ‘About Our Geothermal Solutions’ (pg. GRI 103: consumption. The organization does not and its components 34), ‘Management of the Geothermal By- report this information as it is unavailable. The Management Products and Water Resources’ (pg. 45) Approach 2016 organization does not separately track energy expenditure for heating and cooling needs, and it does not produce steam in the process of 103-3: Evaluation of the ‘About Our Geothermal Solutions’ (pg. its business activities. However, it accounts for management approach 34), ‘Management of the Geothermal By- portions of the stated energy expenditures in the Products and Water Resources’ (pg. 45) total electricity consumption figures reported in GRI 302: context of 302-1e – Total energy consumption Energy 2016 within the organization. Ormat is considering tracking this specific energy use data through its Brine & Steam Management ‘Ormat: What We Do’ (pg. 12), ‘About monitoring systems and reporting any relevant Our Geothermal Solutions’ (pg. 34), findings in the 2019 sustainability report. ‘Management of the Geothermal By- Non-GRI Material Products and Water Resources’ (pg. Topic 45), ‘Safe Dealing with Hazardous Heating, cooling and steam energy sold. The Materials and Emergency Response organization does not report this information as Plans’ (pg. 72) it is not applicable. As of the publication of this report, Ormat does not produce, and therefore does not sell, heating, cooling or steam at its Energy facilities. Furthermore, Ormat does not have plans to venture into the sale or generation of heating, cooling or steam energy sources. 103-1: Explanation of the material ‘Mitigating Climate Change Risks topic and its Boundaries While Encouraging Renewable Energy Solutions’ (pg. 34), ‘Energy 302-3: Energy intensity ‘Energy Intensity’ (pg. 44) Use, Efficiency and Fuel Resource Management at Ormat’ (pg. 43), Encouraging Green Energy ‘Efforts to Improve Energy Efficiency’ (pg. 44) 103-1: Explanation of the ‘Our History and Key material topic and its Experience’ (pg. 14), Boundaries ‘Mitigating Climate GRI 103: 103-2: The management approach ‘Mitigating Climate Change Risks Change Risks While Management and its components While Encouraging Renewable Approach 2016 Energy Solutions’ (pg. 34), ‘Energy Encouraging Renewable Use, Efficiency and Fuel Resource GRI 103: Energy Solutions’ (pg. 34), Management at Ormat’ (pg. 43), Management ‘About Our Geothermal Approach ‘Efforts to Improve Energy Efficiency’ Solutions’ (pg. 34), ‘About 2016 (pg. 44) Our Recovered Energy Solutions’ (pg. 36), ‘About Our Energy Storage and 103-3: Evaluation of the ‘Efforts to Improve Energy Efficiency’ Energy Management management approach (pg. 44) Solutions’ (pg. 38)

112 113 GRI Disclosure Page Number/Chapter Name/Link Omission GRI Disclosure Page Number/Chapter Name/Link Omission Standards Standards

103-2: The management ‘Our History and Key Experience’ (pg. 14), 303-1: Water withdrawal by ‘Management of Water Resources in Our Standards, approach and its components ‘Mitigating Climate Change Risks While source Operations’ (pgs. 45-47), ‘Impacts of Our methodologies, and Encouraging Renewable Energy Solutions’ Operations on the Local Hydrology and assumptions used. (pg. 34) , ‘About Our Geothermal Solutions’ Aquifers’ (pgs. 46-47) As of the publication (pg. 34) , ‘About Our Recovered Energy of this report, no GRI 103: Solutions’ (pg. 36), ‘About Our Energy Storage standard method of Management and Energy Management Solutions’ (pg. 38) estimation modeling Approach was used for reporting 2016 the water quantities 103-3: Evaluation of the ‘About Our Business’ (pg. 93), withdrawn as the management approach ‘Environmental Regulations Supporting organization has Our Business’ (pg. 98) not implemented such methodologies. GRI 303: Therefore, the Water 2016 Encouraging Green Energy ‘Our History and Key Experience’ (pg. information is 14), ‘Mitigating Climate Change While unavailable. However, Encouraging Renewable Energy Solutions’ Ormat plans to (pg. 34), ‘About Our Energy Storage and implement a standard Energy Management Solutions’ (pg. 38), method of water ‘Emissions from Our Power Plants and quantity estimation Non-GRI Operations’ (pg. 39), ‘Our Goals and and modeling for Material Guideposts’ (pg. 74), ‘About Our Business’ all of its operational Topic (pg. 93), ‘Our Business Strategy’ (pg. 93), locations and power ‘Economic Performance in 2018’ (pgs. plants and to report 94-95), ‘Developing Renewable Energy on the methodologies and Critical Infrastructure’ (pg. 97), used in the 2019 ‘Environmental Regulations Supporting sustainability report. Our Business’ (pg. 98) Biodiversity Water 103-1: Explanation of the ‘Biodiversity’ (pg. 52), ‘Our Risk 103-1: Explanation of the ‘Biodiversity’ (pg. 52), ‘Our Risk material topic and its Management Approach’ (pg. 96) material topic and its Management Approach’ (pg. 96) Boundaries Boundaries

GRI 103: 103-2: The management ‘Biodiversity’ (pg. 52), ‘Our Risk Management approach and its components Management Approach’ (pg. 96) Approach 103-2: The management ‘Biodiversity’ (pg. 52), ‘Our Risk 2016 103-3: Evaluation of the ‘Biodiversity’ (pg. 52), ‘ Environmental GRI 103: approach and its components Management Approach’ (pg. 96) management approach Impact Assessments and Environmental Management Audits’ (pg. 52), ‘Our Risk Management Approach Approach’ (pg. 96) 2016 304-2: Significant impacts ‘Environmental Impact Assessments and of activities, products, and Environmental Audits’ (pg. 52) 103-3: Evaluation of the ‘Biodiversity’ (pg. 52), ‘ Environmental services on biodiversity management approach Impact Assessments and Environmental GRI 304: Biodiversity Audits’ (pg. 52), ‘Our Risk Management 304-4: IUCN Red List species ‘Environmental Impact Assessments and 2016 Approach’ (pg. 96) and national conservation list Environmental Audits’ (pg. 52) species with habitats in areas affected by operations

114 115 GRI Disclosure Page Number/Chapter Name/Link Omission GRI Standards Disclosure Page Number/Chapter Name/Link Omission Standards

Emissions Effluents and Waste

103-1: Explanation of the ‘Emissions from Our Power Plants and 103-1: Explanation of the material ‘Waste, Material Management and Recycling’ material topic and its Operations’ (pg. 39) topic and its Boundaries (pg. 48), ‘Waste, Material Management and Boundaries Recycling at Our Facilities and Power Plants’ (pg. 48), ‘Waste and Material Management at Our Manufacturing Facilities, Offices and Workshops’ (pg. 48), ‘Waste and Material Management at Our Power Plants’ (pg. 50), 103-2: The management ‘Emissions from Our Power Plants and ‘Impacts of Our Operations on the Local GRI 103: approach and its components Operations’ (pg. 39) Hydrology and Aquifers’ (pg. 46) Management Approach 2016 103-3: Evaluation of the ‘Emissions from Our Power Plants and management approach Operations’ (pg. 39), ‘Emissions from 103-2: The management ‘Waste, Material Management and Operations’ (pg. 42) approach and its components Recycling’ (pg. 48), ‘Waste, Material Management and Recycling at Our Facilities and Power Plants’ (pg. 48), ‘Waste and Material Management at Our Manufacturing Facilities, Offices and Workshops’ (pg. 48), ‘Waste and Material 305-1: Direct (Scope 1) GHG ‘Emissions from Our Power Plants The organization GRI 103: Management Management at Our Power Plants’ (pg. emissions and Operations’ (pg. 39), ‘Our Carbon omitted 305-1c 50) Footprint and GHG Emissions Avoided’ because it is not Approach 2016 (pgs. 39-41) applicable, i.e. it was not included in our Scope 1 calculations as our activities 103-3: Evaluation of the ‘Waste, Material Management and Recycling’ do not involve the management approach (pg. 48), ‘Waste, Material Management and use of biomass and Recycling at Our Facilities and Power Plants’ therefore there (pg. 48), ‘Waste and Material Management are no biogenic at Our Manufacturing Facilities, Offices and emissions. Workshops’ (pg. 48), ‘Waste and Material Management at Our Power Plants’ (pg. 50), GRI 305: ‘Impacts of Our Operations on the Local Emissions Hydrology and Aquifers’ (pg. 46) 2016 305-2: Energy indirect (Scope ‘Emissions from Our Power Plants 2) GHG emissions and Operations’ (pg. 39), ‘Our Carbon Footprint and GHG Emissions Avoided’ (pgs. 39-41)

306-2: Waste by type and Tables on pgs. 49 and 50 disposal method

305-4: GHG emissions ‘Our Carbon Footprint and GHG Emissions GRI 306: intensity Avoided’ (pgs. 39-41) Effluents and Waste 2016

116 117 GRI Disclosure Page Number/Chapter Omission GRI Disclosure Page Number/Chapter Omission Standards Name/Link Standards Name/Link

GRI 400 Social Standards Series Workplace Diversity ‘Equality in Employment at Non-GRI Ormat’ (pgs. 59-61) Material Topic Employment

103-1: Explanation of ‘Our People: Employment and the material topic and Skill Development at Ormat’ Occupational Health and Safety its Boundaries (pg. 58), GRI 103: 103-1: Explanation of ‘Ensuring a Safe & Healthy 103-2: The ‘Our People: Employment and Management the material topic and Work Environment – management approach Skill Development at Ormat’ Approach its Boundaries Occupational Health and and its components (pg. 58), 2016 Safety at Ormat’ (pgs. 66-68) 103-3: Evaluation of the ‘Our People: Employment and management approach Skill Development at Ormat’ (pg. 58), ‘Our Employment Framework’ (pgs. 58-59) 103-2: The ‘Ensuring a Safe & Healthy GRI 103: management approach Work Environment – Management 401-1: New employee ‘Our Employment Framework’ and its components Occupational Health and Approach hires and employee (pgs. 58-59) Safety at Ormat’ (pgs. 66-68) 2016 turnover

401-2: Benefits ‘Employee Benefits’ (pg. 61) Benefits provided to full-time provided to full-time employees that are not provided to 103-3: Evaluation of the ‘Measuring Our Health and employees that are not temporary or part-time employees. management approach Safety Performance’ (pgs. provided to temporary The organization does not disclose 68-71) or part-time employees specific information regarding all of GRI 401: the categories of employment benefits Employment due to confidentiality constraints. 2016 Ormat considers this to be proprietary 403-1: Workers ‘Our Occupational Health and information that it discloses with its representation in formal Safety Program – Striving to employees on a country-by-country joint management- Go Beyond Compliance’ (pgs. basis in the context of their employment worker health and safety 66-68) contract. That said, the Company fulfills committees and in many cases exceeds coverage of its legal obligations towards its employees in terms of benefits in its various locations of operation. 403-2: Types of ‘Measuring Our Health and Absenteeism. The information is GRI 403: injury and rates of Safety Performance’ (pgs. 69) unavailable regarding the absentee Workplace Diversity Occupational injury, occupational rate, as of the publication of this report Health and diseases, lost days, as the organization did not track this 103-1: Explanation of ‘Equality in Employment at Safety 2016 and absenteeism, and information according to standardized the material topic and Ormat’ (pgs. 59-61) number of work-related methodologies as of the publication of its Boundaries fatalities this report. Ormat plans to collect and GRI 103: track data regarding absentee rates and Management 103-2: The ‘Equality in Employment at to report on this information in the 2019 Approach management approach Ormat’ (pgs. 59-61) sustainability report. 2016 and its components

103-3: Evaluation of the ‘Equality in Employment at management approach Ormat’ (pgs. 59-61)

118 119 GRI Disclosure Page Number/Chapter Name/ Omission GRI Disclosure Page Number/Chapter Name/ Omission Standards Link Standards Link

Training and Education Local Communities

103-1: Explanation of ‘Training and Educational 103-1: Explanation of ‘Supporting and Shaping the material topic and Opportunities for Our Employees’ the material topic and Sustainable Communities and its Boundaries (pgs. 63-65), ‘Educational its Boundaries Futures’ (pgs. 74-75) Empowerment’ (pg. 79)

GRI 103: 103-2: The ‘Training and Educational 103-2: The ‘Supporting and Shaping Management management Opportunities for Our Employees’ GRI 103: management Sustainable Communities and Approach approach and its (pgs. 63-65), ‘Educational Management approach and its Futures’ (pgs. 74-75) 2016 components Empowerment’ (pg. 79) Approach 2016 components

103-3: Evaluation of ‘Training and Educational the management Opportunities for Our Employees’ 103-3: Evaluation of ‘Supporting and Shaping approach (pgs. 63-65), ‘Educational the management Sustainable Communities and Empowerment’ (pg. 79) approach Futures’ (pgs. 74-75)

404-2: Programs for ‘Training and Educational upgrading employee Opportunities for Our Employees’ 413-1: Operations ‘Social Action Plans’ (pg. 74), skills and transition (pgs. 63-65), ‘Supporting and with local community ‘Community Engagement and assistance programs Shaping Sustainable Communities GRI 413: engagement, Handling Grievances’ (pgs. 75-78), and Futures’ (pgs. 74-75) Local impact assessments, ‘Local Livelihood’ (pgs. 78-79), Communities and development ‘Educational Empowerment’ (pgs. 2016 programs 79-81), ‘Healthcare Delivers Hope’ 404-3: Percentage ‘Our Employment Framework’ Percentage of total employees by (pg. 82) of employees (pgs. 58-59) gender and by employee category receiving regular who received regular performance performance and and career development reviews Customer Privacy career development during the reporting period. The data reviews on the percentage of total employees 103-1: Explanation of ‘Data Privacy and Cybersecurity who received performance and the material topic and for Our Stakeholders’ (pg. 101) GRI 404: career development reviews for the its Boundaries Training and reporting period was not reported Education according to gender and employment 2016 category as the information is GRI 103: 103-2: The ‘Data Privacy and Cybersecurity unavailable. As an organization with Management management for Our Stakeholders’ (pg. 101) global operations, Ormat does not Approach approach and its collect all of its human resources 2016 components data according to the parameters of gender and employment category. 103-3: Evaluation of ‘Data Privacy and Cybersecurity However, the Company will consider the management for Our Stakeholders’ (pg. 101) implementing these data parameters approach in the collection of relevant human resources data from its various 418-1: Substantiated ‘Data Privacy and Cybersecurity operational locations and will report complaints concerning for Our Stakeholders’ (pg. 101) GRI 418: any forthcoming data from these breaches of customer Customer improvement efforts in the 2019 privacy and losses of Privacy 2016 sustainability report. customer data

120 121 Reconciliation to U.S. GAAP Financial Information.

This report includes certain “non-GAAP financial measures” within the meaning of Regulation G under the Securities Exchange Act of 1934, as amended, including EBITDA and Adjusted EBITDA. The presentation of these non-GAAP financial measures is not intended as a substitute for financial information prepared and presented in accordance with GAAP and such non-GAAP financial measures should not be considered as a measure of liquidity or as an alternative to cash flow from operating activities, net income or any other measures of performance prepared and presented in accordance with GAAP. Such non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

The appendix slides in this report reconcile the non-GAAP financial measures included in the report to the most directly comparable financial measures prepared and presented in accordance with U.S. GAAP.

(In thousands $) Year Ended December 31, 2018

Net Income ...... 110,111

Adjusted for:

Interest expense, net (including amortization) of deferred financing costs) ...... 69,950

Income tax provision ...... 34,733

Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla ...... 9,184

Depreciation and amortization ...... 127,732

EBITDA ...... 351,710

Mark-to-market on derivative instruments ...... 2,032

Stock-based compensation ...... 10,218

Insurance proceeds in excess of assets carrying value ...... (7,150)

Goodwill impairment, net of earn out adjustments ...... 3,142

Termination fee ...... 4,937

Merger and acquisition transaction costs ...... 2,910

Write-off of unsuccessful exploration activities ...... 126

Adjusted EBITDA ...... 367,961

Copyright © 2019 Ormat Technologies, Inc. All Rights Reserved. This document contains information proprietary to Ormat Technologies, Inc. Reproduction in any form without prior written permission is strictly prohibited.

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