OY Nofar Energy Ltd. — M&A Activity 2025

Dec 31, 2025

December 31, 2025

Nofar Energy Ltd. (the company)

To: Israel Securities Authority www.isa.gov.il To: Tel Aviv Stock Exchange Ltd. www.tase.co.il Dear Sir/Madam,

Subject: Acquisition of a Portfolio of Nine Projects in the USA

The company is pleased to announce that on December 30, 2025, Nofar USA Energy Investments and Management LLC

¹ (the subsidiary or the purchaser) has signed an agreement to acquire a portfolio of solar projects in the USA, with a total capacity of approximately 1 GW (dc) (the purchase agreement and portfolio), from the company PineGate

(the seller), a company undergoing bankruptcy proceedings (in court in Houston, Renewables LLC 11 )Chapter Texas, USA). Signing the agreement is subject to the approval of the federal court and other precedents as detailed in section 4.1 below.

1. Details regarding the projects in the portfolio:

• 1.1. The portfolio is composed of 9 utility-scale solar projects located in 4 states in the USA (Texas, Alabama, North Carolina, and South Carolina), with a total capacity of approximately 1 GWdc, of which 7 projects are in commercial operation (648 MWdc), one project is at an advanced construction stage (106 MWdc), and one project is at the initial construction stage (225 MWdc). The portfolio acquisition will be carried out through the acquisition of all rights in subsidiaries of the seller's group that own the projects.
• 1.2. As of the report date, 7 projects in commercial operation generate electricity and sell it under long-term power purchase agreements (PPAs) to corporate buyers and/or regulated electricity companies, all with high investment-grade credit ratings.

The total senior debt for the projects in commercial operation as of the report date is about USD 261 million, and the total obligations to tax equity partners are, in the company's estimation, about USD 120 million.

• 1.3. As of the report date, the project at advanced construction stage (Foley Mechanical Completion) has reached the stage of technical completion and a long-term power sale agreement has been executed. The project was acquired without senior debt, in such a way that the purchaser will be entitled to fully utilize the tax benets related to the investment in it (ITC), which are expected to be at the rate of approximately 40%.
• 1.4. As of the report date, for the project at the advanced development stage (Lavender), interconnection approval was granted, a long-term PPA agreement was executed, and high-voltage equipment was purchased granting the project qualifying status.

¹ Corporation held, in a chain of 90% by the company.

For the purpose of the tax benets related to the investment (at the start of construction). The project is expected to benet from Safe Harbor ITC

tax benets at a rate of approximately 50%.

1.5. Below is additional information about the projects:

Project	State in USA / Electricity Market	MW DC	Project Status	Commercial Operation Date	PPA Term (from commercial operation date)
Jungmann	Texas / ERCOT	53	Commercially operational	2025	15 years
Texas One	Texas / ERCOT	67	Commercially operational	2025	15 years
Lavender	Texas / ERCOT	225	Start of construction	July 2027 (forecast only)	15 years
East Atmore	Alabama / SERC	115	Commercially operational	2025	17 years
Foley	Alabama / SERC	106	Advanced construction	July 2026 (forecast only)	17 years
Cabin Creek	North Carolina / SERC	98	Commercially operational	2023	5 years (qualied facility with renewing PPA)
Phobos	North Carolina / SERC	110	Commercially operational	2023	5 years (qualied facility with renewing PPA)
Allora	South Carolina / SERC	99	Commercially operational	2023	5 years (qualied facility with renewing PPA)
Gunsight	South Carolina / SERC	106	Commercially operational	2022	5 years (qualied facility with renewing PPA)

2. Purchase price of the portfolio:

2.1. The total purchase price for the portfolio is \$285 million (purchase price).

The purchase price will be subject to adjustments as detailed below: At the date of completion of the transaction, the purchase price will be increased by an amount equal to the total of all payments and expenses paid or accrued by the seller from January 1, 2026, until the completion date of the transaction, for the purpose of establishing and developing the projects, FoleyLavendar, and operational costs of the activity during the ordinary course of business, all subject to a budget agreed upon in advance by the parties (interim period costs).

The purchase price may be decreased at the completion of the transaction if any of the following occur:

• (1) Occurrence of a Remedies Event in the projects, including acceleration of debts or realization of securities (Remedies Event) within the framework of the senior nancing of the projects; or (2) use by the seller of insurance funds or compensation for asset loss for the early repayment of debtor-in-possession (DIP) nancing loans within a court process (Net Cash Proceeds); in each of these cases, the purchase price will be decreased by the relevant amount as stated.
• 2.2. The expected timeline for payment of the purchase price is as follows:
• 2.2.1. Deposit \$28.5 million was deposited by the purchaser in trust in accordance with court procedures (the deposit). At the completion of the transaction, the deposit will be transferred as a payment on account of the purchase price.

Conditions for return of the deposit in the event of non-completion of the purchase agreement (the deposit will be returned to the purchaser only in the following cases and in any other case, the deposit will be fully forfeited):

If the purchase agreement is not approved by the court, the deposit will be returned within ve days from the date of the court's decision.

If the purchaser cancels the purchase agreement due to a material breach by the seller, including materially incorrect representations, undisclosed material obligations or debts, or failure to meet covenants and process conditions up to the completion date.

If the purchase agreement is canceled for any other reason (including not receiving regulatory approvals by February 20, 2026 (the expiry date)), an amount from the deposit will be forfeited to cover overhead expenses and fees according to a pre-agreed budget up to a total of approximately \$9.5 million for the months of January and February 2026 (estate costs), and the remainder of the deposit will be returned to the purchaser.

The purchaser has the option to extend the expiry date provided that it bears the estate costs during the option extension period as described.

• 2.2.2. Payment of the remaining purchase price (approximately \$256.5 million) will be made upon completion of the transaction, which is expected, subject to, among other things, receipt of required regulatory approvals, to occur within 45– 60 days from the date of court approval of the purchase agreement.
• 2.3. Total transaction expenses, estate costs up to the completion date, and interim period costs from January 1, 2026, until completion of the transaction that the purchaser is expected to bear, are expected to amount to approximately \$19 to \$41 million, depending on the duration from the signing date to the completion date, and also,

Additional expenses may be required. In addition, upon completion of the transaction, the purchaser is required to replace certain guarantees from nancial institutions that were provided in connection with power purchase agreements and other commitments,

in a total amount of approximately \$62 million. The purchaser intends to realize existing lines of credit and to seek additional credit lines for the purpose of replacing these guarantees.

3. Manner of Financing the Acquisition:

• 3.1. The purchaser intends to nance the acquisition by a combination of loans to the purchaser (RecourseNon (relying only on the portfolio)), expected to amount to 50% - 60% of the total acquisition costs (i.e., approximately \$150 - \$180 million), independent company sources and/or equity fundraising in subsidiaries only and/or debt fundraising in the company, all at the exclusive discretion of the company and subject to all applicable law and obtaining the required approvals pursuant to law.
• 3.2. The purchaser intends to establish the project and bring it to commercial operation by the end of 2027. (Lavender) The purchaser intends to raise debt, consisting of senior debt to nance the construction of the project and a bridge loan until receipt of tax benets (ITC), in an amount of about \$240 to \$260 million, and the remainder of the project construction costs in the amount of about \$30 million is intended to be nanced with equity by the company.
• 3.3. According to the purchaser's assessment, based on the business plan prepared for the portfolio, within 24 months from the acquisition of the project, the purchaser intends to generate nancing sources in a total amount of \$290 – \$340 million, as detailed below:

Source of Financing	Expected Amounts	Forecast Realization Date
Senior debt and realization of tax benets for the Foley (1) project	\$110 to \$130 million	July to December 2026
Sale of Lavender (2) project after commercial operation	\$90 to \$100 million(3)	July to December 2027
Bringing a minority partner into the portfolio at a rate of 49%	\$90 to \$110 million (without Lavender) or \$142 to \$160 million (if the Lavender project is not sold)(4)	December 2027
Total estimated sources from the portfolio over the rst 24 months	\$290 to \$340 million

• (1) Purchased as a project that reached mechanical completion (Foley) and its total capitalized expenses amounted to approximately \$150 million. The project was acquired without debt and prior to realization of tax benets (Capex ITC). Non-binding memoranda of understanding for senior nancing for the project and for the entry of a tax partner were obtained by the seller prior to the bankruptcy ling (Chapter 11). The purchaser intends to examine the viability of these offers as well as other alternatives for nancing the project and realizing the tax credits. The remaining nancing required to complete the construction of the project is about \$17 million, which is expected to be injected in the rst half of 2026. According to accounting rules, tax benets for the project in the amount of about \$70 to \$80 million are expected to be recorded as income spread over ve years in the subsidiary's books.
• (2) Purchased as a project at the beginning of construction. The detailed estimates above are based on the assumption that the capitalized costs (Lavender Capex) will amount to about \$290 million. According to accounting rules, tax benets for the project in the amount of about \$170 to \$180 million are expected to be recorded as income spread over ve years in the purchaser's books.
• (3) The amount of \$90 to \$100 million is after deduction of construction expenses estimated at about \$30 million.

(4) The amounts of 90 to 110 million dollars (without ) or 142 to 160 million dollars (if the "Lavender" project is sold) are after deduction of development, construction, and improvement costs estimated at approximately 55 million dollars.

4. Date of Completion of the Agreement and Conditions Precedent for Execution of the Agreement:

• 4.1. Completion of the purchase agreement is subject to standard conditions precedent for such transactions, as well as the following main conditions:
• 4.1.1. Approval of the Federal Energy Regulatory Commission;
• 4.1.2. Absence of material breach of the representations and covenants of the seller;
• 4.1.3. Absence of an event with a material adverse effect as dened in the sale agreement;
• 4.1.4. Absence of breach of certain representations specied regarding the seller that relate to the absence of obligations and certain breaches or omissions under the project agreements, which would cause the purchaser expected losses exceeding 7 million dollars;
• 4.1.5. Absence of a default event within DIP loans and/or exercise of lender remedies that impairs completion of the purchase agreement;
• 4.1.6. Transfer of intercompany rights/claims that are pledged in favor of certain lenders to the purchaser;
• 4.1.7. Receipt of third party approvals for the transaction, including lenders and tax partners (to the extent their consent is required), as well as receipt of approvals under antitrust laws (including HSR), to the extent required;
• 4.1.8. Completion/arrangement, to the purchaser's satisfaction, of bankruptcy proceedings (Chapter 11) of any entity holding the projects that is a Debtor, and ensuring that no such entity is subject to any other insolvency proceeding;
• 4.1.9. Issuance of a nal sale order by the court approving the purchase agreement and permitting the sale of the portfolio to the purchaser.
• 4.2. Completion of the purchase agreement and fulllment of the conditions precedent is expected within 45– 60 days from the court's approval of the purchase agreement. The court is expected to issue an order regarding the purchase agreement shortly after the sale hearing, which is scheduled for January 5, 2026.

5. The Corporation's Program Regarding the Portfolio:

With regard to the active projects –

The purchaser intends to implement a program to enhance the projects and improve their operational performance (which was lower than expected for these projects).

In this regard, the company's business plan includes a budget of approximately 8–10 million dollars for repairs and improvements in the projects, and for renewing the spare parts inventory. In addition, the purchaser intends to examine opportunities for increasing the value of the projects, among other things, by promoting the addition of storage projects and/or development of Data Centers on or near the project sites.

With respect to the Foley project (an advanced stage construction project) and the Lavender project (an advanced stage development project) – see footnotes to the table in section 3.3 above.

The acquisition of the portfolio is expected to signicantly increase the scale of the company's income-generating assets, contribute to a signicant increase in its revenues from electricity sales, to an increase in EBITDA, and contribute to a signicant increase in the company's cash ow from its current operations. Assuming full operation of the portfolio, expected from 2028 onwards, according to the company's assessment, annual EBITDA (excluding one-time items) will amount to approximately \$60 million (with the Lavender project) or approximately \$45 million (without the Lavender project).

6.

Financial Data:

Below are nancial data based on audited nancial statements for the years 2023 and 2024, which were received from the seller, in relation to four projects that were launched in 2022 and 2023.

The nancial statements were prepared in accordance with generally accepted accounting principles in the United States (US GAAP). US GAAP

Project Name	Financial Data	2023	2024
		Thousands of dollars
Cabin Creek	Total Revenues	5,261	6,405
	Total Assets	147,747	145,228
	Total Liabilities	65,281	62,711
Phobos	Total Revenues	6,932	5,338
	Total Assets	160,188	158,089
	Total Liabilities	73,320	69,825
Allora	Total Revenues	3,403	5,418
	Total Assets	137,699	136,224
	Total Liabilities	54,206	55,720
Gunsight	Total Revenues	5,292	5,252
	Total Assets	150,049	145,331
	Total Liabilities	58,456	50,727

As of the date of this report, the company does not have full and reliable nancial data for the interim periods of 2025, nor regarding the gross prot, operating prot, and net prot of the projects.

The information included in this report regarding the completion of the acquisition transaction and its date; the fulllment of the suspensive conditions (including

Receiving approval from the American court and approval from the FERC);

Estimation of transaction costs; acquisition nancing (including

Non-Recourse nancing, the company's own independent sources and/or raising capital and/or raising debt as well as the nancing sources

as described, among other things, in section 3.3 above); forecasts regarding the commercial operation dates (COD) of the Foley and Lavender projects;

expected ITC tax benet rates for the Foley and Lavender projects; the plan

for improving the projects and the budget for repairs and enhancements; as well as the forecasts concerning the sources of cash from the portfolio

during the 24 months following its acquisition and the forecast annual EBITDA beginning from 2028 onwards, constitute forward-looking information as dened in the Securities Law, 1968.

This information is based on the company management's subjective assessments as of the report date, on initial work plans, on representations provided to the company by the seller, and on analysis of current market conditions in the USA. The realization

of these assessments and forecasts is not certain, is not entirely under the company's control, and may not occur or may occur in a signicantly different manner than described above.

The main factors that may lead to the company's assessments not being realized include, among other things: non-receipt of

Texas court approval of the agreement or amendment of its terms; objections by creditors or third parties to the sale process;

non-receipt of required regulatory approvals; diculties in obtaining the required nancing due to market conditions

and the interest rate environment; delays in constructing the projects or connecting them to the power grid; changes in tax legislation

in the USA that impact the ITC benets; unforeseen technical failures in the active projects requiring

higher than planned investments; a decrease in electricity prices in the target markets; and the occurrence of risk factors

detailed in the company's periodic reports.

Respectfully,

Nofar Energy Ltd.

By: Ofer Yannay, CEO and Director