ORMAT TECHNOLOGIES, INC. (Form: 10-Q, Received: 08/06/2020 10:14:19)

0001296445 ORMAT TECHNOLOGIES, INC. false --12-31 Q2 2020 779 0 1,931,033 1,880,547 182,813 149,830 5,527 4,688 8,117 8,479 5,802 6,317 9,514 10,482 929 675 1,430 1,519 0.001 0.001 200,000,000 200,000,000 51,067,163 51,067,163 51,031,652 51,031,652 0.11 0 6 0.11 0 6 0.11 0.11 0 6 0 0 0 6 6 3 0 0 August 18, 2020 September 1, 2020 These amounts relate to contingent receivables and payables relating to acquisition of the Guadeloupe power plant, valued primarily based on unobservable inputs and are included within “Prepaid expenses and other”, “Accounts payable and accrued expenses” and “Other long-term liabilities” on June 30, 2020 and December 31, 2019 in the consolidated balance sheets with the corresponding gain or loss being recognized within "Derivatives and foreign currency transaction gains (losses)" in the condensed consolidated statements of operations and comprehensive income. Including unconsolidated investments 71,047 - - 71,047 These amounts relate to currency forward contracts valued primarily based on observable inputs, including forward and spot prices for currencies, net of contracted rates and then multiplied by notional amounts, and are included within “Prepaid expenses and other” and “Accounts payable and accrued expenses”, as applicable, on June 30, 2020 and December 31, 2019, in the condensed consolidated balance sheets with the corresponding gain or loss being recognized within “Derivatives and foreign currency transaction gains (losses)” in the consolidated statement of operations and comprehensive income. Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the consolidated balance sheets. The contract liabilities balance at the beginning of the year was fully recognized as product revenues during the six months ended June 30, 2020 as a result of performance obligations satisfied. * Including unconsolidated investments 84,414 - - 84,414 Electricity segment revenues in foreign countries are all accounted under lease accounting. Product segment revenues in foreign countries are accounted under ASC 606. Electricity segment assets include goodwill in the amount of $20.1 million and $20.2 million as of June 30, 2020 and 2019, respectively. No goodwill is included in the Product and ESMS segment assets as of June 30, 2020 and 2019. Electricity segment revenues in the United States are all accounted under lease accounting except for 15.6 million and $32.4 million in the three and six months ended June 30, 2020, respectively, that are accounted under ASC 606. For the three and six months ended June 30, 2019, Electricity segment revenues in the United States are all accounted under lease accounting except for 12.9 million and 29.9 million, respectively, that are accounted under ASC 606. 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Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2020

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number: 001-32347

ORMAT TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware	88-0326081
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

6140 Plumas Street, Reno, Nevada	89519-6075
(Address of principal executive offices)	(Zip Code)

(775) 356-9029

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

As of July 31, 2020, the number of outstanding shares of common stock, par value $0.001 per share, was 51,067,163.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ORA	NYSE

Table of Contents

ORMAT TECHNOLOGIES, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2020

PART I — FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	54

ITEM 4.	CONTROLS AND PROCEDURES	54

PART II — OTHER INFORMATION		55

ITEM 1.	LEGAL PROCEEDINGS	55

ITEM 1A.	RISK FACTORS	55

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	56

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	56

ITEM 4.	MINE SAFETY DISCLOSURES	56

ITEM 5.	OTHER INFORMATION	56

ITEM 6.	EXHIBITS	57

SIGNATURES		58

Table of Contents

Certain Definitions

Unless the context otherwise requires, all references in this quarterly report to “Ormat”, “the Company”, “we”, “us”, “our company”, “Ormat Technologies” or “our” refer to Ormat Technologies, Inc. and its consolidated subsidiaries.

iii

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ITEM 1. FINANCIAL STATEMENT

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	June 30, 2020			December 31, 2019
	(Dollars in thousands)
*ASSETS*
Current assets:
Cash and cash equivalents	$	173,718		$	71,173
Restricted cash and cash equivalents (primarily related to VIEs)		76,116			81,937
Receivables:
Trade less allowance for credit losses of $779 and $0, respectively (primarily related to VIEs)		179,757			154,525
Other		18,121			22,048
Inventories		38,932			34,949
Costs and estimated earnings in excess of billings on uncompleted contracts		19,477			38,365
Prepaid expenses and other		10,948			12,667
Total current assets		517,069			415,664
Investment in unconsolidated companies		84,414			81,140
Deposits and other		37,278			38,284
Deferred income taxes		116,758			129,510
Property, plant and equipment, net ($1,931,033 and $1,880,547 related to VIEs, respectively)		2,038,038			1,971,415
Construction-in-process ($182,813 and $149,830 related to VIEs, respectively)		394,123			376,555
Operating leases right of use ($5,527 and $4,688 related to VIEs, respectively)		17,638			17,405
Finance leases right of use ($8,117 and $8,479 related to VIEs, respectively)		13,280			14,161
Intangible assets, net		179,659			186,220
Goodwill		20,120			20,140
Total assets	$	3,418,377		$	3,250,494
*LIABILITIES AND EQUITY*
Current liabilities:
Accounts payable and accrued expenses	$	149,591		$	141,857
Short term revolving credit lines with banks (full recourse)		100,057			40,550
Commercial paper		3,775			50,000
Billings in excess of costs and estimated earnings on uncompleted contracts		5,599			2,755
Current portion of long-term debt:
Limited and non-recourse (primarily related to VIEs):
Senior secured notes		28,544			24,473
Other loans		34,341			34,458
Full recourse		76,572			76,572
Operating lease liabilities		3,016			2,743
Finance lease liabilities		3,151			3,068
Total current liabilities		404,646			376,476
Long-term debt, net of current portion:
Limited and non-recourse (primarily related to VIEs):
Senior secured notes (less deferred financing costs of $5,802 and $6,317, respectively)		325,714			339,336
Other loans (less deferred financing costs of $9,514 and $10,482, respectively)		301,318			317,395
Full recourse:
Senior unsecured bonds (less deferred financing costs of $929 and $675, respectively)		415,751			286,453
Other loans (less deferred financing costs of $1,430 and $1,519, respectively)		64,150			68,747
Operating lease liabilities		14,201			14,008
Finance lease liabilities		10,523			11,209
Liability associated with sale of tax benefits		118,072			123,468
Deferred income taxes		104,013			97,126
Liability for unrecognized tax benefits		15,309			14,643
Liabilities for severance pay		18,835			18,751
Asset retirement obligation		51,414			50,183
Other long-term liabilities		7,814			8,039
Total liabilities		1,851,760			1,725,834
Commitments and contingencies (Note 9)
Redeemable noncontrolling interest		9,806			9,250
Equity:
The Company's stockholders' equity:
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 51,067,163 and 51,031,652 issued and outstanding as of June 30, 2020 and December 31, 2019, respectively		51			51
Additional paid-in capital		917,403			913,150
Retained earnings		524,864			487,873
Accumulated other comprehensive income (loss)		(13,921	)		(8,654	)
Total stockholders' equity attributable to Company's stockholders		1,428,397			1,392,420
Noncontrolling interest		128,414			122,990
Total equity		1,556,811			1,515,410
Total liabilities, redeemable noncontrolling interest and equity	$	3,418,377		$	3,250,494

The accompanying notes are an integral part of the consolidated financial statements.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands, except per share data)						(Dollars in thousands, except per share data)
Revenues:
Electricity	$	128,685		$	129,079		$	271,541		$	271,987
Product		43,701			52,030			91,112			104,158
Energy storage and management services		2,514			2,956			4,360			6,958
Total revenues		174,900			184,065			367,013			383,103
Cost of revenues:
Electricity		71,950			73,775			143,318			151,318
Product		34,709			41,316			71,687			83,422
Energy storage and management services		2,855			3,827			4,804			9,037
Total cost of revenues		109,514			118,918			219,809			243,777
Gross profit		65,386			65,147			147,204			139,326
Operating expenses:
Research and development expenses		1,172			810			2,791			1,710
Selling and marketing expenses		4,854			3,276			9,648			7,141
General and administrative expenses		11,285			14,181			25,633			29,870
Operating income		48,075			46,880			109,132			100,605
Other income (expense):
Interest income		441			420			843			713
Interest expense, net		(19,785	)		(21,517	)		(37,058	)		(42,740	)
Derivatives and foreign currency transaction gains (losses)		671			19			1,064			491
Income attributable to sale of tax benefits		5,672			4,637			9,804			12,401
Other non-operating income (expense), net		304			1,027			382			1,118
Income from operations before income tax and equity in earnings (losses) of investees		35,378			31,466			84,167			72,588
Income tax (provision) benefit		(11,766	)		3,529			(29,914	)		(10,510	)
Equity in earnings (losses) of investees, net		1,658			1,202			923			2,249
Net income		25,270			36,197			55,176			64,327
Net income attributable to noncontrolling interest		(2,224	)		(2,259	)		(6,097	)		(4,443	)
Net income attributable to the Company's stockholders	$	23,046		$	33,938		$	49,079		$	59,884
Comprehensive income:
Net income		25,270			36,197			55,176			64,327
Other comprehensive income (loss), net of related taxes:
Change in foreign currency translation adjustments		921			482			276			(866	)
Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of unconsolidated investment		(653	)		(2,087	)		(5,408	)		(3,232	)
Change in respect of derivative instruments designated for cash flow hedge		17			18			30			40
Amortization of unrealized gains in respect of derivative instruments designated for cash flow hedge		(5	)		(9	)		(13	)		(17	)
Comprehensive income		25,550			34,601			50,061			60,252
Comprehensive income attributable to noncontrolling interest		(2,763	)		(2,443	)		(6,249	)		(4,305	)
Comprehensive income attributable to the Company's stockholders	$	22,787		$	32,158		$	43,812		$	55,947

Earnings per share attributable to the Company's stockholders:
Basic:
Net income		0.45			0.67			0.96			1.18
Diluted:
Net income		0.45			0.66			0.95			1.17
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:
Basic		51,043			50,800			51,040			50,757
Diluted		51,362			51,094			51,448			51,058

The accompanying notes are an integral part of the consolidated financial statements.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

	The Company's Stockholders' Equity
										Accumulated
					*Additional*					*Other*
	*Common Stock*				*Paid-in*		*Retained*			*Income*						*Noncontrolling*			*Total*
	*Shares*		*Amount*		*Capital*		*Earnings*			*(Loss)*			*Total*			*Interest*			*Equity*
	(Dollars in thousands, except per share data)
Balance at December 31, 2018		50,700	$	51	$	901,363	$	422,222		$	(3,799	)	$	1,319,837		$	125,259		$	1,445,096
Cumulative effect of changes in accounting principles		—		—		—		(58	)		—			(58	)		—			(58	)
Adjusted balance as of the beginning of the year		50,700		51		901,363		422,164			(3,799	)		1,319,779			125,259			1,445,038
Stock-based compensation		—		—		2,360		—			—			2,360			—			2,360
Exercise of options by employees and directors		52		—		—		—			—			—			—			—
Cash paid to noncontrolling interest		—		—		—		—			—			—			(4,146	)		(4,146	)
Cash dividend declared, $0.11 per share		—		—		—		(5,579	)		—			(5,579	)		—			(5,579	)
Net income		—		—		—		25,946			—			25,946			1,855			27,801
Other comprehensive income (loss), net of related taxes:
Foreign currency translation adjustments		—		—		—		—			(1,026	)		(1,026	)		(322	)		(1,348	)
Change in respect of derivative instruments designated for cash flow hedge		—		—		—		—			22			22			—			22
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment (net of related tax of $0)		—		—		—		—			(1,145	)		(1,145	)		—			(1,145	)
Amortization of unrealized gains in respect of derivative instruments designated for cash flow hedge (net of related tax of $6)		—		—		—		—			(8	)		(8	)		—			(8	)
Balance at March 31,2019		50,752	$	51	$	903,723	$	442,531		$	(5,956	)	$	1,340,349		$	122,646		$	1,462,995

Balance as of the beginning of the period		50,752	$	51	$	903,723	$	442,531		$	(5,956	)	$	1,340,349		$	122,646		$	1,462,995
Stock-based compensation		—		—		2,643		—			—			2,643			—			2,643
Exercise of options by employees and directors		110		—		—		—			—			—			—			—
Cash paid to noncontrolling interest		—		—		—		—			—			—			(2,767	)		(2,767	)
Cash dividend declared, $0.11 per share		—		—		—		(5,589	)		—			(5,589	)		—			(5,589	)
Net income		—		—		—		33,938			—			33,938			2,017			35,955
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment		—		—		—		—			298			298			184			482
Loss in respect of derivative instruments designated for cash flow hedge		—		—		—		—			18			18			—			18
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment (net of related tax of $0)		—		—		—		—			(2,087	)		(2,087	)		—			(2,087	)
Amortization of unrealized gains in respect of derivative instruments designated for cash flow hedge (net of related tax of $6)		—		—		—		—			(9	)		(9	)		—			(9	)
Balance at June 30, 2019		50,862	$	51	$	906,366	$	470,880		$	(7,736	)	$	1,369,561		$	122,080		$	1,491,641

Balance at December 31, 2019		51,032	$	51	$	913,150	$	487,873		$	(8,654	)	$	1,392,420		$	122,990		$	1,515,410
Cumulative effect of changes in accounting principles		—		—		—		(755	)		—			(755	)		—			(755	)
Adjusted balance as of the beginning of the year		51,032	$	51	$	913,150	$	487,118		$	(8,654	)	$	1,391,665		$	122,990		$	1,514,655
Stock-based compensation		—		—		1,989		—			—			1,989			—			1,989
Exercise of options by employees and directors		4		—		—		—			—			—			—			—
Cash paid to noncontrolling interest		—		—		—		—			—			—			(3,007	)		(3,007	)
Cash dividend declared, $0.11 per share		—		—		—		(5,614	)		—			(5,614	)		—			(5,614	)
Increase in noncontrolling interest		—		—		—		—			—			—			1,447			1,447
Net income		—		—		—		26,033			—			26,033			3,543			29,576
Other comprehensive income (loss), net of related taxes:
Foreign currency translation adjustments		—		—		—		—			(258	)		(258	)		(387	)		(645	)
Change in respect of derivative instruments designated for cash flow hedge		—		—		—		—			13			13			—			13
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment		—		—		—		—			(4,755	)		(4,755	)		—			(4,755	)
Amortization of unrealized gains in respect of derivative instruments designated for cash flow hedge		—		—		—		—			(8	)		(8	)		—			(8	)
Balance at March 31, 2020		51,036	$	51	$	915,139	$	507,537		$	(13,662	)	$	1,409,065		$	124,586		$	1,533,651

Balance as of the beginning of the period		51,036	$	51	$	915,139	$	507,537		$	(13,662	)	$	1,409,065		$	124,586		$	1,533,651
Stock-based compensation		—		—		2,264		—			—			2,264			—			2,264
Exercise of options by employees and directors		31		—		—		—			—			—			—			—
Cash dividend declared, $0.11 per share		—		—		—		(5,719	)		—			(5,719	)		—			(5,719	)
Increase in noncontrolling interest in U.S. Geothermal		—		—		—		—			—			—			1,307			1,307
Net income		—		—		—		23,046			—			23,046			1,982			25,028
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment		—		—		—		—			382			382			539			921
Loss in respect of derivative instruments designated for cash flow hedge		—		—		—		—			17			17			—			17
Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment (net of related tax of $0)		—		—		—		—			(653	)		(653	)		—			(653	)
Amortization of unrealized gains in respect of derivative instruments designated for cash flow hedge (net of related tax of $6)		—		—		—		—			(5	)		(5	)		—			(5	)
Balance at June 30, 2020		51,067	$	51	$	917,403	$	524,864		$	(13,921	)	$	1,428,397		$	128,414		$	1,556,811

The accompanying notes are an integral part of the consolidated financial statements.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

	Six Months Ended June 30,
	2020			2019
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	55,176		$	64,327
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		74,859			73,331
Accretion of asset retirement obligation		1,545			1,323
Stock-based compensation		4,253			5,003
Amortization of deferred lease income		—			(1,344	)
Income attributable to sale of tax benefits, net of interest expense		(5,538	)		(6,089	)
Equity in losses (earnings) of investees		(923	)		(2,249	)
Mark-to-market of derivative instruments		(2,043	)		(1,579	)
Loss on disposal of property, plant and equipment		801			1,136
Loss (gain) on severance pay fund asset		38			(547	)
Deferred income tax provision		19,731			1,534
Liability for unrecognized tax benefits		666			2,709
Deferred lease revenues		—			(364	)
Changes in operating assets and liabilities, net of businesses acquired:
Receivables		(24,831	)		2,200
Costs and estimated earnings in excess of billings on uncompleted contracts		18,888			14,778
Inventories		(3,983	)		4,224
Prepaid expenses and other		1,719			6,894
Change in operating lease right of use asset		1,865			4,176
Deposits and other		1,048			(2,284	)
Accounts payable and accrued expenses		10,009			(6,196	)
Billings in excess of costs and estimated earnings on uncompleted contracts		2,844			(4,272	)
Liabilities for severance pay		84			64
Change in operating lease liabilities		(1,634	)		—
Other long-term liabilities		(220	)		(696	)
Net cash provided by operating activities		154,354			156,079
Cash flows from investing activities:
Capital expenditures		(151,254	)		(114,880	)
Investment in unconsolidated companies		(7,759	)		—
Decrease (increase) in severance pay fund asset, net of payments made to retired employees		(14	)		712
Net cash used in investing activities		(159,027	)		(114,168	)
Cash flows from financing activities:
Proceeds from long-term loans, net of transaction costs		129,407			132,847
Repayments of commercial paper and prepayment of loans		(46,225	)		(6,098	)
Proceeds from revolving credit lines with banks		1,250,639			1,298,500
Repayment of revolving credit lines with banks		(1,191,132	)		(1,404,400	)
Cash received from noncontrolling interest		7,577			3,346
Repayments of long-term debt		(31,784	)		(36,767	)
Cash paid to noncontrolling interest		(3,661	)		(7,828	)
Payments under finance lease obligations		(1,389	)		(1,713	)
Deferred debt issuance costs		(677	)		(4,345	)
Cash dividends paid		(11,333	)		(11,168	)
Net cash provided by (used in) financing activities		101,422			(37,626	)
Effect of exchange rate changes		(25	)		(141	)
Net change in cash and cash equivalents and restricted cash and cash equivalents		96,724			4,144
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period		153,110			177,495
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	249,834		$	181,639
Supplemental non-cash investing and financing activities:
Increase (decrease) in accounts payable related to purchases of property, plant and equipment	$	(2,226	)	$	6,010

The accompanying notes are an integral part of the consolidated financial statements.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — GENERAL AND BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated financial position as of June 30, 2020, the condensed consolidated statements of operations and comprehensive income and the condensed consolidated statements of equity for the three and six months ended June 30, 2020 and 2019 and the condensed consolidated statements of cash flows for the six months ended June 30, 2020 and 2019.

The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results for the periods presented are not necessarily indicative of the results to be expected for the year.

These condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2019 but does not include all disclosures required by U.S. GAAP.

Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000.

Senior Unsecured Bonds - Series 3

On April 6, 2020, the Company concluded an auction tender and accepted subscriptions for an additional aggregate principal amount of approximately $50 million of its Series 3 Senior Unsecured Bonds (the “Additional Series 3 Bonds”). The Additional Series 3 Bonds will mature in September 2022 and bear interest at a fixed rate of 4.45% per annum, payable semi-annually in arrears. The Additional Series 3 Bonds will be repaid at maturity in a single bullet payment, unless earlier prepaid by the Company pursuant to the terms and conditions of the trust instrument that governs such Senior Unsecured Bonds.

On April 20, 2020, the Company concluded an additional auction tender and accepted subscriptions for an aggregate principal amount of approximately $14.5 million of its Series 3 Senior Unsecured Bonds (the “Second Addition to Series 3 Bonds”). The Second Addition to Series 3 Bonds will mature in September 2022 and bear interest at a fixed rate of 4.45% per annum, payable semi-annually in arrears. The Second Addition to Series 3 Bonds will be repaid at maturity in a single bullet payment, unless earlier prepaid by the Company pursuant to the terms and conditions of the trust instrument that governs such Senior Unsecured Bonds.

Additionally, on May 13, 2020, the Company concluded an additional auction tender and accepted subscriptions for an aggregate principal amount of approximately $15.3 million under Series 3 Senior Unsecured Bonds (the “Third Addition to Series 3 Bonds”). The Third Addition to Series 3 Bonds will mature in September 2022 and bear interest at a fixed rate of 4.45% per annum, payable semi-annually in arrears. The Third Addition to Series 3 Bonds will be repaid at maturity in a single bullet payment, unless earlier prepaid by the Company pursuant to the terms and conditions of the trust instrument that governs such Senior Unsecured Bonds.

Senior Unsecured Loan

In April 2020, the Company entered into a second addendum (the “Second Addendum”) to the loan agreement with the Migdal Group dated March 22, 2018. The Second Addendum provides for an additional loan by the lenders to the Company in an aggregate principal amount of $50.0 million (the “Second Addendum Migdal Loan”). Of the Second Addendum Migdal Loan, $31.5 million will be repaid in 15 equal semi-annual payments commencing on September 15, 2021 and ending on September 15, 2028. The principal amount of the Second Addendum Migdal Loan of $18.5 million will be repaid in one bullet payment on March 15, 2029. The Second Addendum Migdal Loan bears interest at a fixed rate of 5.44% per annum, payable semi-annually in arrears, subject to adjustment in certain circumstances. The Second Addendum Migdal Loan was entered into under substantially the same terms and conditions of the Migdal Loan Agreement.

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(Unaudited)

COVID-19 consideration

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus ("COVID-19") a pandemic. At the same time, countries around the world have ordered companies to limit or suspend operations and imposed many travel restrictions which resulted in a sudden decline in global economic activity and an increase in market volatility. The Company has implemented significant measures in order to meet government requirements and preserve the health and safety of its employees by working remotely intermittently where possible and applying separate shifts in its power plants, manufacturing facilities and other locations while trying to continue operations at close to full capacity in all locations. Also, the Company focused efforts to adjusting its operations to mitigate the impact of COVID-19 including managing its global supply chain risks, and enhancing its liquidity profile. In the first quarter of 2020, the Company took prompt steps to manage its expenses including responsible cost cutting measures and significantly reduced hiring. In addition, in order to support its capital expenditure and growth plans, in the second quarter and July 2020, the Company raised more than $400 million through long term loans as described above and under Note 11, Subsequent Events to the condensed consolidated financial statements. While the extent and duration of the economic downturn from the COVID-19 pandemic remains unclear, the Company has considered, among other things, whether the global operational disruptions indicate a change in circumstances that may trigger asset impairments and whether it needs to revisit accounting estimates and projections or its expectations about collectability of receivables. Additionally, the Company has considered the potential impacts on its fair value disclosures and on its internal control over financial reporting. During the quarter, the Company's power plants, manufacturing and storage facilities have been operating at close to full capacity and there was no significant direct impact on the Company's operations as a result of the economic downturn. While significant uncertainty still exists concerning the magnitude of the impact and duration of the COVID-19 pandemic on the global economy, the Company has determined that there was no triggering event for an impairment with respect to any of its assets nor has there been an adverse change in the probability related to the collectability of its receivables. The Company continues to assess the potential impact of the global economic situation on its consolidated financial statements.

Puna

On May 3, 2018, the Kilauea volcano located in close proximity to the Company's 38 MW geothermal power plant in the Puna district of Hawaii's Big Island erupted following a significant increase in seismic activity in the area. Before it stopped flowing, the lava covered the wellheads of three geothermal wells, monitoring wells and the substation of the Puna complex and an adjacent warehouse that stored a drilling rig that was also consumed by the lava. The insurance policy coverage for property and business interruption is provided by a consortium of insurers. All the insurers accepted and started paying for the costs to rebuild the destroyed substation and during the first six months of 2020, the Company received an additional $3.9 million of such proceeds, $0.8 million of which were received in the second quarter. However, only some of the insurers accepted that the business interruption coverage started in May 2018 and during the first six months of 2020, the Company recognized income of $8.2 million from such additional cash proceeds, $3.3 million of which was received in the second quarter, which were included in cost of revenues up to the amount covering the related costs and the remainder, totaling $3.0 million, in general and administrative expenses in the consolidated statements of operations and comprehensive income for the six months ended June 30, 2020. The Company has filed a lawsuit against those insurers that have not accepted its business interruption claim.

As of August 2020, recommission efforts at Puna continue. Permits that are required for the construction and operation of the substation were received. Hawaii Electric Light Company ("HELCO") received the Public Utility Commission ("PUC") approval and started to construct the transmission network. On the field side, the Company connected one new production well to the power plant and is expected to enable partial production by the beginning of the fourth quarter. The Company continues its field recovery work, which includes drilling of new wells and expects gradual increase of generation to 29 MW by the end of the year, assuming the transmission network upgrade is completed and field recovery is successfully achieved.

In December 2019, Puna Geothermal Venture ("PGV") and HELCO's subsidiary reached an agreement on an amended and restated PPA for dispatchable geothermal power sold from the Puna complex. The new PPA extends the term until 2052 with an increased contract capacity of 46MW and a fixed price with no escalation, regardless of changes to fossil fuel pricing. The Commercial Operation Date ("COD") of the new 8MW plant is expected during 2022. The existing PPA remains in effect, with current terms, until the expansion is completed, and the new plant reaches its COD.

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(Unaudited)

The Company continues to assess the accounting implications of this event on the assets and liabilities on its consolidated balance sheets and whether an impairment will be required. Any significant damage to the geothermal resource or continued shut-down following the lava event at the Puna facilities could have an adverse impact on the power plant's electricity generation and availability, which in turn could have a material adverse impact on the Company's business and results of operations.

Write-offs of unsuccessful exploration activities

There were no write-offs of unsuccessful exploration activities for the three and six months ended June 30, 2020 and 2019.

Reconciliation of Cash and cash equivalents and restricted cash and cash equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as reported on the balance sheet to the total of the same amounts shown on the statement of cash flows:

	June 30,		December 31,		June 30,
	2020		2019		2019
	(Dollars in thousands)
Cash and cash equivalents	$	173,718	$	71,173	$	110,665
Restricted cash and cash equivalents		76,116		81,937		70,974
Total Cash and cash equivalents and restricted cash and cash equivalents	$	249,834	$	153,110	$	181,639

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of temporary cash investments and accounts receivable.

The Company places its temporary cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At June 30, 2020 and December 31, 2019, the Company had deposits totaling $11.4 million and $12.9 million, respectively, in ten U.S. financial institutions that were federally insured up to $250,000 per account. At June 30, 2020 and December 31, 2019, the Company’s deposits in foreign countries amounted to approximately $116.1 million and $84.8 million, respectively.

At June 30, 2020 and December 31, 2019, accounts receivable related to operations in foreign countries amounted to approximately $151.6 million and $118.8 million, respectively. At June 30, 2020 and December 31, 2019, accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of 10% of total consolidated revenues for six months ended June 30, 2020 or 2019, amounted to approximately 52% and 58% of the Company’s trade receivables, respectively.

Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy, Inc.) accounted for 17.2% and 16.5% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 18.3% and 17.4% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

Southern California Public Power Authority (“SCPPA”) accounted for 20.0% and 17.2% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 19.5% and 18.3% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

Kenya Power and Lighting Co. Ltd. ("KPLC") accounted for 16.0% and 16.6% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 15.7% and 16.0% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

The Company has historically been able to collect on substantially all of its receivable balances. As of June 30, 2020, the amount overdue from KPLC was $54.8 million of which $8.8 million was paid in July 2020. These amounts represent an average of 81 days overdue. The Company believes it will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as where caused by government actions/political events). Additionally, on April 17, 2020, the company received from KPLC a notice declaring a force majeure event in Kenya due to the impact of COVID-19 and purporting to reduce the Olkaria complex’s contracted capacity from 150 MW to 133.9 MW. As a result of the force majeure provisions in the Power Purchase Agreement related to this facility, the notice had an immaterial impact on revenues, as agreed also by KPLC. In addition, the Company experienced a higher rate of curtailments by KPLC in the Olkaria complex. The impact of the curtailments is limited as the structure of the PPA secures the vast majority of the Company's revenues with fixed capacity payments unrelated to the electricity actually consumed.

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(Unaudited)

In Honduras, the Company has been able to collect current charges from Empresa Nacional de Energía Eléctrica (“ENEE”) starting in May 2019. However, due to continuing restrictive measures related to the COVID-19 pandemic in Honduras, the Company may experience delays in collection. As of June 30, 2020, the total amount overdue from ENEE was $24.0 million of which $20.1 million relates to the period from October 2018 to April 2019 and the $4.0 million relates to February and March invoices that are overdue. In July 2020, we received payments of $0.7 million on account of such invoices. In view of the ongoing Honduran government support undertaking, the Company believes it will be able to collect past due amounts in Honduras. In addition, on April 30, 2020, we also received from ENEE a notice declaring a force majeure event in Honduras due to the impact of COVID-19. The Company has not identified any impact on its consolidated financial statements as a result of this notice.

The Company may experience delays in collection in other locations due to the restrictive measures related to the COVID-19 pandemic which were imposed globally to different extents.

Revenues from Contracts with Customers

Contract assets related to our Product segment reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities related to the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of June 30, 2020 and December 31, 2019 are as follows.

	June 30,			December 31,
	2020			2019
	(Dollars in thousands)
Contract assets (*)	$	19,477		$	38,365
Contract liabilities (*)	$	(5,599	)	$	(2,755	)

(*) Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the consolidated balance sheets. The contract liabilities balance at the beginning of the year was fully recognized as product revenues during the six months ended June 30, 2020 as a result of performance obligations satisfied.

On June 30, 2020, the Company had approximately $63.5 million of remaining performance obligations not yet satisfied or partly satisfied related to our Product segment. The Company expects to recognize approximately 100% of this amount as Product revenues during the next 24 months.

Leases in which the Company is a lessor

The table below presents the lease income recognized as a lessor:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
	(Dollars in thousands)				(Dollars in thousands)
Lease income relating to lease payments from operating leases	$	113,083	$	116,138	$	239,159	$	242,046

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(Unaudited)

NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS

New accounting pronouncements effective in the six months period ended June 30, 2020

Financial Instruments—Credit Losses

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-13, Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments. This guidance replaces the current incurred loss impairment methodology. Under the new guidance, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects its current estimate of credit losses expected to be incurred over the life of the financial instrument based on historical experience, current conditions and reasonable and supportable forecasts. In November 2018, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 2018-19 clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. The guidance became effective on January 1, 2020, including interim periods within that year and requires a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Under the modified retrospective method of adoption, prior year reported results are not restated. The Company has performed its analysis of the impact on its financial instruments that are within the scope of this guidance, primarily cash and cash equivalents and restricted cash and cash equivalents, receivables (excluding those accounted under lease accounting) and costs and estimated earnings in excess of billings on uncompleted contracts, based on class of financing receivables which share the same or similar risk characteristics such as customer type and geographic location, among others. The Company has estimated the expected credit losses for each class of financing receivables by applying the related corporate default rate which corresponds to the credit rating of the specific customer or class of financing receivables. For trade receivables, the Company applied this methodology using aging schedules reflecting how long the receivables have been outstanding. The Company has also considered the existence of credit enhancement arrangements that may mitigate the credit risk of its financial receivables in estimating the applicable corporate default rate. The Company adopted this update effective January 1, 2020 and recorded a cumulative-effect adjustment to its retained earnings as of that date of approximately $0.8 million. While significant uncertainty still exists concerning the magnitude of the impact and duration of the COVID-19 pandemic on the global economy, the Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined that the estimate of credit losses was not significantly impacted.

The following table describes the changes in the allowance for expected credit losses for the three and six months ended June 30, 2020 (all related to trade receivables):

	Three Months Ended June 30,		Six Months Ended June 30,
	2020		2020
	(Dollars in thousands)

Beginning balance of the allowance for expected credit losses	$	779	$	755
Current period provision for expected credit losses		—		24
Ending balance of the allowance for expected credit losses	$	779	$	779

New accounting pronouncements effective in future periods

Accounting for Income Taxes

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019- 12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC 740. The standard is effective for annual periods beginning after December 15, 2020 and interim periods within. Early adoption is permitted although the Company had not early adopted ASU 2019-12 as of June 30, 2020. The Company does not anticipate ASU 2019-12 will have a material impact on its consolidated financial statements.

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(Unaudited)

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as the London Interbank Offered Rate ("LIBOR") reference rate is scheduled to be discontinued on December 31, 2021. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Modifications of contracts within the scope of Topic 470, Debt, should be accounted for by prospectively adjusting the effective interest rate. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company evaluated the impact of the transition from LIBOR, and currently believes that the transition will not have a material impact on its consolidated financial statements.

NOTE 3 — INVENTORIES

Inventories consist of the following:

	June 30,		December 31,
	2020		2019
	(Dollars in thousands)
Raw materials and purchased parts for assembly	$	22,593	$	21,942
Self-manufactured assembly parts and finished products		16,339		13,007
Total inventories	$	38,932	$	34,949

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(Unaudited)

NOTE 4— FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received upon selling an asset or paid upon transferring a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:

Level 1 — Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 — Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3 — Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The following table sets forth certain fair value information at June 30, 2020 and December 31, 2019 for financial assets and liabilities measured at fair value by level within the fair value hierarchy, as well as cost or amortized cost. As required by the fair value measurement guidance, assets and liabilities are classified in their entirety based on the lowest level of inputs that is significant to the fair value measurement.

				June 30, 2020
				Fair Value
	Carrying Value at June 30, 2020			Total			Level 1		Level 2		Level 3
	(Dollars in thousands)
Assets:
Current assets:
Cash equivalents (including restricted cash accounts)	$	36,661		$	36,661		$	36,661	$	—	$	—
Derivatives:
Contingent receivable ⁽¹⁾		101			101			—		—		101
Currency forward contracts ⁽²⁾		2,405			2,405			—		2,405		—
Liabilities:
Current liabilities:
Derivatives:
Contingent payables ⁽¹⁾		(2,900	)		(2,900	)		—		—		(2,900	)
	$	36,267		$	36,267		$	36,661	$	2,405	$	(2,799	)

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(Unaudited)

				December 31, 2019
				Fair Value
	Carrying Value at December 31, 2019			Total			Level 1		Level 2		Level 3
	(Dollars in thousands)
Assets
Current assets:
Cash equivalents (including restricted cash accounts)	$	28,316		$	28,316		$	28,316	$	—	$	—
Derivatives:
Contingent receivables ⁽¹⁾		102			102			—		—		102
Currency forward contracts ⁽²⁾		362			362			—		362		—
Liabilities:
Current liabilities:
Derivatives:
Contingent payable ⁽¹⁾		(3,359	)		(3,359	)		—		—		(3,359	)
	$	25,421		$	25,421		$	28,316	$	362	$	(3,257	)

These amounts relate to contingent receivables and payables relating to acquisition of the Guadeloupe power plant, valued primarily based on unobservable inputs and are included within “Prepaid expenses and other”, “Accounts payable and accrued expenses” and “Other long-term liabilities” on June 30, 2020 and December 31, 2019 in the consolidated balance sheets with the corresponding gain or loss being recognized within "Derivatives and foreign currency transaction gains (losses)" in the condensed consolidated statements of operations and comprehensive income.

These amounts relate to currency forward contracts valued primarily based on observable inputs, including forward and spot prices for currencies, net of contracted rates and then multiplied by notional amounts, and are included within “Prepaid expenses and other” and “Accounts payable and accrued expenses”, as applicable, on June 30, 2020 and December 31, 2019, in the condensed consolidated balance sheets with the corresponding gain or loss being recognized within “Derivatives and foreign currency transaction gains (losses)” in the consolidated statement of operations and comprehensive income.

The amounts set forth in the tables above include investments in debt instruments and money market funds (which are included in cash equivalents). Those securities and deposits are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices in an active market.

The following table presents the amounts of gain (loss) recognized in the consolidated statements of operations and comprehensive income on derivative instruments not designated as hedges (in thousands):

		Amount of recognized gain (loss)				Amount of recognized gain (loss)
Derivatives not designated as hedging instruments	Location of recognized gain (loss)	Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019

Currency forward contracts	Derivative and foreign currency transaction gains (losses)		1,435		616	$	2,525	$	1,699
		$	1,435	$	616	$	2,525	$	1,699

The foregoing forward transactions were not designated as hedge transactions and are marked to market with the corresponding gains or losses recognized within “Derivatives and foreign currency transaction gains (losses)”.

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(Unaudited)

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the six months ended June 30, 2020.

The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:

	Fair Value				Carrying Amount
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
	(Dollars in millions)				(Dollars in millions)
Olkaria III Loan - OPIC	$	203.4	$	202.1	$	183.6	$	192.6
Olkaria III plant 4 Loan - DEG 2		43.2		43.8		40.0		42.5
Olkaria III plant 1 Loan - DEG 3		38.3		38.8		34.9		37.1
Platanares Loan - OPIC		117.7		115.3		100.4		104.5
Amatitlan Loan		24.6		26.4		24.5		26.3
Senior Secured Notes:
OFC 2 LLC ("OFC 2")		222.6		210.9		198.4		203.0
Don A. Campbell 1 ("DAC 1")		81.2		78.5		75.2		78.2
USG Prudential - NV		33.0		30.6		28.2		28.4
USG Prudential - ID		18.6		18.6		18.8		19.6
USG DOE		47.1		45.0		39.5		40.8
Senior Unsecured Bonds		294.8		205.7		285.2		204.3
Senior Unsecured Loan		231.5		161.3		200.0		150.0
Plumstriker	20.0			21.7		20.0		21.6
Other long-term debt		16.4		16.3		16.7		17.4

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The fair value of the long-term debt is determined by a valuation model, which is based on a conventional discounted cash flow methodology and utilizes assumptions of current borrowing rates. The fair value of revolving lines of credit is determined using a comparison of market-based price sources that are reflective of similar credit ratings to those of the Company.

As disclosed above under Note 1 to the condensed consolidated financial statements, the outbreak of the COVID-19 pandemic has resulted in a global economic downturn and market volatility that may have an impact on the estimated fair value of the Company's long-term debt. While interest rates on U.S. Treasury securities have declined and may continue to decline as a result of the COVID-19 pandemic, other components of the Company's borrowing rates have increased and may continue to increase as the global economic situation evolves, all of which have a direct impact on the fair value of the Company's long-term debt.

The carrying value of financial instruments such as revolving lines of credit and deposits approximates fair value.

The following table presents the fair value of financial instruments as of June 30, 2020:

	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Olkaria III - OPIC		—		—		203.4		203.4
Olkaria III plant 4 Loan - DEG 2		—		—		43.2		43.2
Olkaria III plant 1 Loan - DEG 3		—		—		38.3		38.3
Platanares Loan - OPIC		—		—		117.7		117.7
Amatitlan Loan		—		24.6		—		24.6
Senior Secured Notes:
OFC 2 Senior Secured Notes		—		—		222.6		222.6
DAC 1 Senior Secured Notes		—		—		81.2		81.2
USG Prudential - NV		—		—		33.0		33.0
USG Prudential - ID		—		—		18.6		18.6
USG DOE		—		—		47.1		47.1
Senior Unsecured Bonds		—		—		294.8		294.8
Senior Unsecured Loan		—		—		231.5		231.5
Plumstriker		—		20.0		—		20.0
Other long-term debt		—		—		16.4		16.4
Commercial paper		—		3.8		—		3.8
Revolving lines of credit		—		100.1		—		100.1
Deposits		12.2		—		—		12.2

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The following table presents the fair value of financial instruments as of December 31, 2019:

	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Olkaria III Loan - OPIC		—		—		202.1		202.1
Olkaria IV - DEG 2		—		—		43.8		43.8
Olkaria IV - DEG 3		—		—		38.8		38.8
Platanares Loan - OPIC		—		—		115.3		115.3
Amatitlan Loan		—		26.4		—		26.4
Senior Secured Notes:
OFC 2 Senior Secured Notes		—		—		210.9		210.9
DAC 1 Senior Secured Notes		—		—		78.5		78.5
USG Prudential - NV		—		—		30.6		30.6
USG Prudential - ID		—		—		18.6		18.6
USG DOE		—		—		45.0		45.0
Senior Unsecured Bonds		—		—		205.7		205.7
Senior Unsecured Loan		—		—		161.3		161.3
Plumstriker		—		21.7		—		21.7
Other long-term debt		—		—		16.3		16.3
Commercial paper		—		50.0		—		50.0
Revolving lines of credit		—		40.6		—		40.6
Deposits		12.2		—		—		12.2

NOTE 5 — STOCK-BASED COMPENSATION

On May 12, 2020, the Company granted certain members of its management an aggregate of 46,795 Stock Appreciation Rights ("SARs"), 6,142 Restricted Stock Units ("RSUs") and 5,637 Performance Stock Units ("PSUs") under the Company’s 2018 Incentive Plan. The exercise price of each SAR was $68.34 which represented the fair market value of the Company’s common stock on the grant date. The SARs will expire six years from date of grant and the SARs, RSUs and PUSs have a vesting period of between 2 to 4 years from the grant date.

The fair value of each SAR, RSU and PSU on the grant date was $17.6, $67.2 and $73.2, respectively. The Company calculated the fair value of each SAR on the grant date using the complex lattice, tree-based option-pricing model based on the following assumptions:

Risk-free interest rates	0.44	%
Expected life (in years)	2.8
Dividend yield	0.63	%
Expected volatility (weighted average)	28.14	%

On June 15, 2020, the Company granted certain directors, members of its management and employees an aggregate of 852,475 SARs, 11,068 RSUs and 10,962 PSUs under the Company’s 2018 Incentive Plan. The exercise price of each SAR was $69.14 which represented the fair market value of the Company’s common stock on the grant date. The SARs will expire six years from date of grant, except for 1,156 SARs which will expire in 5 months from the grant date, and the SARs, RSUs and PSUs have a vesting period of between 2 to 4 years from the grant date.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The fair value of each SAR, RSU and PSU on the grant date was $18.0, $68.0 and $65.0 , respectively. The Company calculated the fair value of each SAR on the grant date using the complex lattice, tree-based option-pricing model based on the following assumptions:

Risk-free interest rates	0.44%	-	0.28%
Expected life (in years)	2	-	2.8
Dividend yield		0.64%
Expected volatility (weighted average)	28.5%	-	35.2%

NOTE 6 — INTEREST EXPENSE, NET

The components of interest expense are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands)						(Dollars in thousands)
Interest related to sale of tax benefits	$	2,500		$	3,155		$	4,824		$	6,816
Interest expense		19,634			18,821			36,800			36,383
Less — amount capitalized		(2,349	)		(459	)		(4,566	)		(459	)
Total interest expense, net	$	19,785		$	21,517		$	37,058		$	42,740

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 7 — EARNINGS PER SHARE

Basic earnings per share attributable to the Company’s stockholders is computed by dividing net income or loss attributable to the Company’s stockholders by the weighted average number of shares of common stock outstanding for the period. The Company does not have any equity instruments that are dilutive, except for employee stock-based awards.

The table below shows the reconciliation of the number of shares used in the computation of basic and diluted earnings per share (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019

Weighted average number of shares used in computation of basic earnings per share add:		51,043		50,800		51,040		50,757
Additional shares from the assumed exercise of employee stock options		319		294		408		301
Weighted average number of shares used in computation of diluted earnings per share		51,362		51,094		51,448		51,058

The number of stock-based awards that could potentially dilute future earnings per share and that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive was 141,328 and 174,334 for the three months ended June 30, 2020 and 2019, respectively, and 132,941 and 228,775 for the six months ended June 30, 2020 and 2019, respectively.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 8 — BUSINESS SEGMENTS

The Company has three reporting segments: the Electricity segment, the Product segment and the Energy Storage and Management Services segment ("ESMS"). These segments are managed and reported separately as each offers different products and serves different markets.

•

Under the Electricity segment the Company builds, owns and operates geothermal, solar PV and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world and sell the electricity they generate.

•

Under the Product segment, the Company designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and remote power units and provide services relating to the engineering, procurement and construction of geothermal and recovered energy-based power plants.

•

Under the ESMS segment the Company provides energy storage, demand response and energy management related services as well as services relating to the engineering, procurement, construction, operation and maintenance of energy storage units mainly through its Viridity business.

Transfer prices between the operating segments are determined based on current market values or cost-plus markup of the seller’s business segment.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables, including the Company's disaggregated revenues from contracts with customers:

	Electricity		Product		ESMS			Consolidated
	(Dollars in thousands)
Three Months Ended June 30, 2020:
Revenues from external customers:
United States ⁽¹⁾	$	80,427	$	2,269	$	2,514		$	85,210
Foreign⁽²⁾		48,258		41,432		—			89,690
Net revenue from external customers		128,685		43,701		2,514			174,900
Intersegment revenue		—		50,453		—			50,453
Operating income (loss)		45,875		3,803		(1,603	)		48,075
Segment assets at period end ^{(3) (*)}		3,150,770		190,474		77,133			3,418,377
* Including unconsolidated investments		84,414		—		—			84,414

Three Months Ended June 30, 2019:
Revenues from external customers:
United States ⁽¹⁾	$	76,931	$	12,532	$	2,956		$	92,419
Foreign⁽²⁾		52,148		39,498		—			91,646
Net revenue from external customers		129,079		52,030		2,956			184,065
Intersegment revenue		—		19,167		—			19,167
Operating income (loss)		43,475		5,307		(1,902	)		46,880
Segment assets at period end^{(3) (*)}		2,992,891		128,524		72,366			3,193,781
* Including unconsolidated investments		71,047		—		—			71,047

Six Months Ended June 30, 2020:
Revenues from external customers:
United States (1)	$	172,119	$	2,667	$	4,360		$	179,146
Foreign (2)		99,422		88,445		—			187,867
Net revenue from external customers		271,541		91,112		4,360			367,013
Intersegment revenue		—		59,109		—			59,109
Operating income (loss)		104,505		7,675		(3,048	)		109,132
Segment assets at period end (3) (*)		3,150,770		190,474		77,133			3,418,377
* Including unconsolidated investments		84,414		—		—			84,414

Six Months Ended June 30, 2019:
Revenues from external customers:
United States (1)	$	168,459	$	23,775	$	6,958		$	199,192
Foreign (2)		103,528		80,383		—			183,911
Net revenue from external customers		271,987		104,158		6,958			383,103
Intersegment revenue		—		37,428		—			37,428
Operating income (loss)		95,026		9,559		(3,980	)		100,605
Segment assets at period end (3) (*)		2,992,891		128,524		72,366			3,193,781
* Including unconsolidated investments		71,047		—		—			71,047

(1)

Electricity segment revenues in the United States are all accounted under lease accounting except for $15.6 million and $32.4 million in the three and six months ended June 30, 2020, respectively, that are accounted under ASC 606. For the three and six months ended June 30, 2019, Electricity segment revenues in the United States are all accounted under lease accounting except for $12.9 million and $29.9 million, respectively, that are accounted under ASC 606. Product and ESMS segment revenues in the United States are accounted under ASC 606.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

(2)

Electricity segment revenues in foreign countries are all accounted under lease accounting. Product segment revenues in foreign countries are accounted under ASC 606.

(3)

Electricity segment assets include goodwill in the amount of $20.1 million and $20.2 million as of June 30, 2020 and 2019, respectively. No goodwill is included in the Product and ESMS segment assets as of June 30, 2020 and 2019.

Reconciling information between reportable segments and the Company’s consolidated totals is shown in the following table:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands)						(Dollars in thousands)
Revenues:
Total segment revenues	$	174,900		$	184,065		$	367,013		$	383,103
Intersegment revenues		50,453			19,167			59,109			37,428
Elimination of intersegment revenues		(50,453	)		(19,167	)		(59,109	)		(37,428	)
Total consolidated revenues	$	174,900		$	184,065		$	367,013		$	383,103

Operating income:
Operating income	$	48,075		$	46,880		$	109,132		$	100,605
Interest income		441			420			843			713
Interest expense, net		(19,785	)		(21,517	)		(37,058	)		(42,740	)
Derivatives and foreign currency transaction gains (losses)		671			19			1,064			491
Income attributable to sale of tax benefits		5,672			4,637			9,804			12,401
Other non-operating income (expense), net		304			1,027			382			1,118
Total consolidated income before income taxes and equity in income of investees	$	35,378		$	31,466		$	84,167		$	72,588

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 9 — COMMITMENTS AND CONTINGENCIES

• On May 21, 2018, a motion to certify a class action was filed in Tel Aviv District Court against Ormat Technologies, Inc. and 11 officers and directors. The alleged class is defined as "All persons who purchased Ormat shares on the Tel Aviv Stock Exchange between August 3, 2017 and May 13, 2018". The motion alleges that the Company and other respondents violated Sections 31(a)(1) and 38C of the Israeli Securities Law, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, because they allegedly: (1) misled investors by stating in the Company's financial statements that it maintains effective internal controls over its accounting policies and procedures, even though the Company's internal controls had material weaknesses which led to erroneous accounting in its 2017 unaudited quarterly reports that had to be restated, including adjustments to the Company’s net income and shareholders’ equity; and (2) failed to issue an immediate report in Israel until May 16, 2018, analogous to the report that was released in the United States on May 11, 2018 stating, inter alia, that the errors in its financial reports affected its balance sheet and would be remedied in its 2017 annual report. The Company had filed agreed motions from time to time to the Tel Aviv District Court to stay the proceedings in Israel in light of the United States case (Mac Costas). On June 30, 2020, pursuant to the execution and submission of a settlement agreement to the United States court for approval, which resolves the matters raised with respect to the entire class of shareholders (whether trading on the Tel Aviv Stock Exchange or U.S. stock exchange), the Company filed a motion informing the Tel Aviv court of the settlement. On July 2, 2020, Plaintiff in the Tel Aviv action filed a motion requesting the Israeli court to issue an Anti-Suit Injunction against Phoenix Insurance, the lead plaintiff in the United States case, instructing it to, inter alia, discontinue acting on behalf of the Israeli class members in the matter. The Company considers that it has strong legal defenses and it is not probable that the request for an Anti-Suit Injunction will be granted. The potential amount that the Company may bear in this context cannot be reasonably estimated at this time.

• On June 11, 2018, a putative class action filed by Mac Costas on behalf of alleged shareholders that purchased or acquired the Company's ordinary shares between August 8, 2017 and May 15, 2018 was commenced in the United States District Court for the District of Nevada against the Company and its Chief Executive Officer and Chief Financial Officer, which was subsequently amended by a consolidated complaint filed by lead plaintiff Phoenix Insurance in May 13, 2019. The complaint asserts claim against all defendants pursuant to Section 10(b) of the Exchange Act, as amended, and Rule 10b-5 thereunder and against its officers pursuant to Section 20(a) of the Exchange Act. The complaint alleges that the Company's Form 10-K for the years ended December 31, 2016 and 2017, and Form 10-Qs for each of the quarters in the nine months ended September 30, 2017 contained material misstatements or omissions, among other things, with respect to the Company’s tax provisions and the effectiveness of its internal control over financial reporting, and that, as a result of such alleged misstatements and omissions, the plaintiffs suffered damages. On December 6, 2019 the Company’s motion to dismiss was denied by the court. On March 23, 2020, pursuant to out of court mediation, a term sheet for a proposed settlement of the action without admission of liability or wrongdoing, was signed between the parties and on June 10, 2020, a joint stipulation and motion for preliminary approval of the comprehensive executed settlement documentation was filed for the court for approval, which is now pending. The sum the Company will bear in this context is not material.

• On September 11, 2018, the Klein derivative action (Klein Action) was filed against the Company, our board and its Chief Executive Officer and Chief Financial Officer in the United States District Court for the District of Nevada, and on October 22, 2018, the Matthew derivative action (Matthew Action) was filed against the Company, certain named present and former board members (Barniv, Beck, Boehm, Clark, Falk, Freeland, Granot, Joyal, Nishigori, Sharir, Stern and Wong) in the United States District Court, District of Nevada. The Klein complaint asserts four derivative causes of action generally arising from Ormat's restatement of its financial statements: (i) the individual defendants allegedly breached their fiduciary duties by allowing the Company to improperly report its financials; (ii) the individual defendants allegedly were unjustly enriched by being compensated while breaching their fiduciary duties; (iii) the individual defendants allegedly committed corporate waste in paying officers and directors and by incurring legal costs and potential liability; and (iv) the director defendants allegedly breached Section 14(a) of the Exchange Act in connection with the issuance of the 2018 proxy. The Matthew complaint similarly alleges derivatively a breach of fiduciary duties, abuse of control, gross mismanagement, and corporate waste by the named directors. On January 24, 2019, the Nevada Court entered an order consolidating the Klein Action and Matthew Action. On July 10, 2020, a comprehensive settlement package and derivative stipulation of settlement was submitted to the court, which will be requested to approve. The sum the Company will bear for implementation is not material.

• Following the announcement of the Company’s acquisition of U.S. Geothermal Inc. ("USG"), a number of putative shareholder class action complaints were initially filed on behalf of USG shareholders between March 8, 2018 and March 30, 2018 against USG and the individual members of the USG board of directors. All of the purported class action suits filed in Federal Court in Idaho have been voluntarily dismissed. The single remaining class action complaint is a purported class action filed in the Delaware Chancery Court, entitled Riche v. Pappas, et al., Case No. 2018-0177 (Del. Ch., Mar. 12, 2018). An amended complaint was filed on May 24, 2018 under seal, under a confidentiality agreement that was executed by plaintiff. The amended Riche complaint alleges state law claims for breach of fiduciary duty against former USG directors and seeks post-closing damages. On March 27, 2020, pursuant to out of court mediation, a term sheet for a proposed settlement of the action, without admission of liability or wrongdoing, was signed between the parties. On June 3, 2020, a comprehensive settlement package and stipulation of settlement was filed with the court for approval. The court has scheduled a hearing date for its review on September 16, 2020. The sum the Company will bear in this context is not material.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

• On March 29, 2016, a former local sales representative in Chile, Aquavant, S.A., filed a claim on the basis of unjust enrichment against Ormat’s subsidiaries in the 27th Civil Court of Santiago, Chile. The claim requests that the court order Ormat to pay Aquavant $4.6 million in connection with its activities in Chile, including the EPC contract for the Cerro Pabellon project and various geothermal concessions, plus 3.75% of Ormat geothermal products sales in Chile over the next 10 years. Pursuant to various motions submitted by the defendants and the plaintiffs to various courts, including the Court of Appeals, the case was removed from the original court and then refiled before the 11th Civil Court of Santiago. On April 16, 2020, the 11th Civil Court of Santiago issued its order rejecting Plaintiff's principal claim of unjust enrichment, as an improper cause of action, rejecting Plaintiff's secondary claim for declaratory judgment, which the Court associates with the principal claim of unjust enrichment and not relating to a number of defenses raised by the Company. In May 2020, each of the parties filed separately to the court of appeals, which are pending. The Company considers it has strong legal defenses and the probability of the claimant receiving an award is low. The potential amount that the Company may bear in this context cannot be reasonably estimated at this time.

In addition, from time to time, the Company is named as a party to various other lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company's business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will not be material to the Company’s consolidated financial statements as a whole.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 10 — INCOME TAXES

The Company’s effective tax rate expense (benefit) for the three months ended June 30, 2020 and 2019 was 33.3% and (11.2)%, respectively and 35.5% and 14.5% for the six months ended June 30, 2020 and 2019, respectively. The effective rate differs from the federal statutory rate of 21% for the six months ended June 30, 2020 due to: (i) the mix of business in various countries with higher statutory tax rates than the federal statutory tax rate; (ii) a net increase in the valuation allowance on deferred tax assets related to Production Tax Credits ("PTC"); and (iii) partially offset by tax depreciation benefits related to intra-entity transfers of assets.

In response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), enacted on March 27, 2020 in the United States provides relief on deferral of tax payments and filings, modifies the net operating loss utilization rules, and temporarily increases the interest expense deduction allowed. For the six months ended June 30, 2020, there were no material tax impacts to our consolidated financial statements as it relates to the CARES Act or other COVID-19 stimulus measures. The Company will continue to monitor additional guidance issued by Treasury, the Internal Revenue Service and other taxing authorities.

Tax Audit in Kenya

The Company has received three Notices of Assessments (“NoA”) from the Kenya Revenue Authority ("KRA") relating to certain findings in respect of its audit of tax years 2013 to 2017. The Company has responded and objected to each of the KRA audit findings and has already filed its appeals to Objection Decisions issued by the KRA and continuing the legal process in order to resolve the issues raised. The total amount of assessments under the first two NoAs is approximately $157 million, excluding penalties and interest of approximately $42 million and the total amount of assessment under the third NoA is approximately $3 million, excluding penalties and interest of approximately $1 million.

The Company is currently at different stages of discussions with the KRA on the matters included in the KRA assessments. The Company believes its tax positions for the issues raised during the audit period is more-likely-than-not sustainable based on technical merits under Kenyan tax law. As of June 30, 2020, the Company had not recorded any tax reserves related to these demands except for an immaterial amount.

NOTE 11 — SUBSEQUENT EVENTS

Senior Unsecured Bonds - Series 4

On July 1, 2020, the Company concluded an auction tender and accepted subscriptions for senior unsecured bonds comprised of NIS 1.0 billion aggregate principal amount (the “Senior Unsecured Bonds - Series 4”). The Senior Unsecured Bonds - Series 4 were issued in New Israeli Shekels and converted to approximately $290 million using a cross-currency swap transaction shortly after the completion of such issuance. The Senior Unsecured Bonds - Series 4 bear interest at a fixed rate of 3.35% per annum, payable semi-annually in arrears starting December 2020 and will be repaid in 10 equal annual payments commencing June 2022 unless prepaid earlier by the Company pursuant to the terms and conditions of the trust instrument that governs the Senior Unsecured Bonds - Series 4. The proceeds from the Senior Unsecured Bonds - Series 4 will be used to pay the total consideration of $43.9 million, net of the Pomona purchase transaction as further detailed below, repay certain existing indebtedness and support the Company's growth plans.

Cross Currency Swap

Shortly after the issuance of the Senior Unsecured Bonds - Series 4, the Company entered into a long-term cross currency swap (the "Cross Currency Swap") to hedge the currency rate fluctuations related to the aggregated principal amount and interest of the Senior Unsecured Bonds - Series 4 at an average fixed rate of 4.34%. The terms of the Cross Currency Swap match those of the Senior Unsecured Bonds - Series 4, including the notional amount of the principal and interest payment dates. The Company will account for the Cross Currency Swap as a cash flow hedge under ASC 815, Derivatives and Hedging, and accordingly will measure the Cross Currency Swap instrument at fair value. The changes in the Cross Currency Swap fair value will initially be recorded in Other Comprehensive Income (Loss) and will be reclassified to "Derivatives and foreign currency transactions gains (losses)" in the same period or periods during which the hedged transaction affects earnings in order to offset such amounts in the same line item in the condensed consolidated statements of operations and comprehensive income.

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ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Cash Dividend

On August 4, 2020, the Board of Directors of the Company declared, approved and authorized payment of a quarterly dividend of $5.6 million ($0.11 per share) to all holders of the Company’s issued and outstanding shares of common stock on August 18, 2020, payable on September 1, 2020.

Energy storage assets portfolio purchase transaction

On July 20, 2020, the Company closed on a transaction to acquire 100% of the 20MW/80MWh Pomona Energy Storage ("Pomona") facility in California from Alta Gas Power Holdings (U.S.) Inc. for a total consideration of $43.9 million, net of working capital and other adjustments totaling $3.1 million. The Pomona facility has been in commercial operation since December 2016 under a 10-year energy storage resource agreement with Southern California Edison Company.

The Pomona facility is one of the largest battery storage assets in operation in the region and is the Company's first battery storage asset in California. The purchase is increasing the Company's operating portfolio to 73MW/136MWh and adding to its battery storage assets in New Jersey, New England and Texas.

The Company will account for the transaction under ASC 805, Business Combinations and is currently evaluating the accounting related to the Pomona facility purchase transaction. The Company expects to consolidate Pomona in its consolidated financial statements starting at the acquisition date.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this quarterly report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this quarterly report on Form 10-Q, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, or “contemplate” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this quarterly report are primarily located in the material set forth under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors”, and “Notes to Condensed Consolidated Financial Statements”, but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this quarterly report on Form 10-Q completely and with the understanding that actual future results and developments may be materially different from what we expect attributable to a number of risks and uncertainties, many of which are beyond our control.

Specific factors that might cause actual results to differ from our expectations include, but are not limited to the following, many of which are, and will be, amplified by the COVID-19 pandemic:

•

the impact and potential impact of the COVID-19 outbreak on our growth plans, financial position and results of operations;

•

significant considerations, risks and uncertainties discussed in this quarterly report;

•

geothermal resource risk (such as the heat content, useful life and geological formation of the reservoir);

•

operating risks, including equipment failures and the amounts and timing of revenues and expenses;

•

financial market conditions and the results of financing efforts;

•

weather and other natural phenomena including earthquakes, volcanic eruption, drought and other natural disasters;

•

political, legal, regulatory,tax, governmental, administrative and economic conditions and developments in the United States and other countries in which we operate and, in particular, possible import tariffs, possible late payments, the impact of recent and future federal, state and local regulatory proceedings and changes, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, public policies and government incentives that support renewable energy and enhance the economic feasibility of our projects at the federal and state level in the United States, Kenya, Turkey and elsewhere, and carbon-related legislation;

•

risks and uncertainty with respect to our internal control over financial reporting, including the identification of a material weakness which, if not timely remediated, may adversely affect the accuracy and reliability of our financial statements;

•

the impact of fluctuations in oil and natural gas prices under certain of our power purchase agreements (“PPAs”)

•

the competition with other renewable sources or a combination of renewable sources on the energy price component under future PPAs;

•

risks and uncertainties with respect to our ability to implement strategic goals or initiatives in segments of the clean energy industry or new or additional geographic focus areas;

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•

risk and uncertainties associated with our operating storage facilities and with future development of storage and geothermal projects which operate as "merchant" facilities without long-term sales agreements, including the variability of revenues and profitability of such projects;

•

environmental constraints on operations and environmental liabilities arising out of past or present operations, including the risk that we may not have, and in the future may be unable to procure, any necessary permits or other environmental authorizations;

•

construction or other project delays or cancellations;

•

the enforceability of long-term PPAs for our power plants;

•

contract counterparty risk, including late payments, or no payments;

•

changes in environmental and other laws and regulations to which our Company is subject, as well as changes in the application of existing laws and regulations;

•

current and future litigation;

•

our ability to successfully identify, integrate and complete acquisitions;

•

our ability to access the public markets for debt or equity capital quickly;

•

competition from other geothermal energy projects and new geothermal energy projects developed in the future, and from alternative electricity producing technologies;

•

market or business conditions and fluctuations in demand for energy or capacity in the markets in which we operate, which may affect the market prices for energy or capacity including those in the markets where we operate;

•

when, if and to what extent opportunities under our commercial cooperation agreement with ORIX Corporation may in fact materialize;

•

the direct or indirect impact on our Company’s business of various forms of hostilities including the threat or occurrence of war, terrorist incidents or cyber-attacks or responses to such threatened or actual incidents or attacks, including the effect on the availability of and premiums on insurance;

•

our strategic plan to expand our geographic markets, customer base and product and service offerings may not be implemented as currently planned or may not achieve our goals as and when implemented;

•

development and construction of solar photovoltaic (Solar PV) and energy storage projects, if any, may not materialize as planned; and

•

the effect of and changes in current and future land use and zoning regulations, residential, commercial and industrial development and urbanization in the areas in which we operate.

Investors are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. Other than as required by law, we undertake no obligation to update forward-looking statements even though our situation may change in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this report and the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”) and any updates contained herein as well as those set forth in our reports and other filings made with the Securities and Exchange Commission (the “SEC”).

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General

Overview

We are a leading vertically integrated company that is primarily engaged in the geothermal, and recovered energy power businesses. We leveraged our core capabilities and global presence to expand our activity into the solar Photovoltaic (PV) and energy storage and management services business.

We design, develop, build, sell, own, and operate clean, environmentally friendly geothermal and recovered energy-based power plants, usually using equipment that we design and manufacture. Our objective is to become a leading global provider of renewable energy and we have adopted a strategic plan to focus on several key initiatives to expand our business.

We currently conduct our business activities in three business segments:

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Electricity Segment. In the Electricity segment, which contributed 73.6% of our total revenues in the three months ended June 30, 2020, we develop, build, own and operate geothermal, solar PV and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world and sell the electricity they generate. In the three months ended June 30, 2020, we derived 63.4% of our Electricity segment revenues from our operations in the United States and 36.6% from the rest of the world.

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Product Segment. In the Product segment, which contributed 25.0% of our total revenues in the three months ended June 30, 2020, we design, manufacture and sell equipment for geothermal and recovered energy-based electricity generation and remote power units and provide services relating to the engineering, procurement, construction, of geothermal, and recovered energy-based power plants. In the three months ended June 30, 2020, we derived 2.9% of our Product segment revenues from our operations in the United States and 97.1% from the rest of the world.

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Energy Storage and Management Services Segment. In the Energy Storage and Management Services segment, which contributed 1.4% of our total revenues in the three months ended June 30, 2020, we provide energy storage, demand response and energy management related services as well as services relating to the engineering, procurement, construction, operation and maintenance of energy storage units through the business of our Viridity Energy Solutions Inc. ("Viridity"), which we acquired in 2017. In the three months ended June 30, 2020, we derived 100% of our Energy Storage and Management Services segment revenues from our operations in the United States.

Our operations are conducted in the U.S. and the rest of the world. Our current generating portfolio includes geothermal power plants in the U.S., Kenya, Guatemala, Honduras, Guadeloupe and Indonesia, as well as recovered energy generation and Solar PV power plants and storage activity in the U.S.

COVID 19 Update

In March 2020, the World Health Organization declared the outbreak of the novel coronavirus ("COVID-19") a pandemic. Governments around the world have ordered companies to limit or suspend non-essential operations and imposed operational and travel restrictions resulting in a decline in global economic activity and an increase in market volatility.

The Company has implemented significant measures both to comply with government requirements and to preserve the health and safety of its employees. These measures include working remotely where possible and operating separate shifts in its power plants, manufacturing facilities and other locations while trying to continue operations in close to full capacity in all locations. During the quarter and subsequently, the Company's power plants, manufacturing facility and storage facilities have been operating at close to full capacity and there has been no material impact on our operations as a result of these measures.

In addition, we did not experience any material impact on our results of operations during the first half of 2020, but certain events and developments we have experienced may have an impact in the second half of 2020 and beyond that varies among our business segments.

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In our Electricity segment almost all of our revenues in the six months ended June 30, 2020 was generated under long term contracts and the majority have a fixed energy rate. As a result, despite logistical and other challenges, we experienced only a limited impact of COVID-19 on our Electricity segment. Nevertheless, on April 17, 2020, we received from Kenya Power & Lighting Co. Ltd. ("KPLC") a notice declaring a force majeure event in Kenya due to the impact of COVID-19 and purporting to reduce the Olkaria complex’s contracted capacity from 150 MW to 133.9 MW. As a result of the force majeure provisions in the Power Purchase Agreement related to this facility, the notice had an immaterial impact on our expected revenue, as agreed also by KPLC. In addition, we experienced a higher rate of curtailments by KPLC in the Olkaria complex. The impact of the curtailments is limited as the structure of the PPA secures the vast majority of our revenues with fixed capacity payments unrelated to the electricity actually consumed (in 2019 and six months ended June 30, 2020, capacity payments represented 70% and 75% of our revenues, respectively). On April 30, 2020, we also received from ENEE a notice declaring a force majeure event in Honduras due to the impact of COVID-19. We have not identified any impact on our consolidated financial statements as a result of this notice. In addition, our future growth in the Electricity segment might be adversely impacted by a lack of funding for projects, a decrease in demand for electricity, delays in permitting and the implications of global and local restrictions on our ability to procure raw material and ship our products.

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Our Product segment revenues are generated from sales of products and services pursuant to contracts, under which we have a right to payment for any product that was produced for the customer. Recognition of revenue under these contracts is impacted by delays in the progress of the third-party projects into which our products and services are incorporated. We had a product backlog of $65.5 million as of August 3, 2020, which includes revenues for the period between July 1, 2020 and August 3, 2020 compared to $201 million as of August 7, 2019. We believe that the decline in backlog resulted mainly due to the impact of COVID-19 and the unwillingness of potential customers to enter into new commitments at this time. We currently expect to recognize more than 80% of our backlog by the end of 2020. Nevertheless, we expect that 2020 product revenues will be significantly adversely impacted for the reasons set out above, restrictions on travel and because our customers deferring their decision to purchase, which all have impacted our sales and marketing efforts.

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Our Energy Storage and Management Services segment generate revenues mainly from the sale of the electricity ancillary services back to the energy markets based on the prevailing market price for the electricity or for the energy or ancillary services. There has been a decline in ancillary services prices that was driven primarily by the impact of COVID 19. This decline impacted negatively our energy storage facilities’ revenues. If the decline in ancillary prices continues, we may experience a further decline in our energy storage revenues.

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In addition, we experience delays in the permitting for new projects in all segments that may also cause a delay in those projects.

Given uncertainties regarding future global economic activity and the continued and potential future impact of COVID-19, we have undertaken a number of steps in managing our global supply chain risks as well as enhancing the Company’s liquidity position. In the first quarter of 2020, we took prompt steps to manage our expenses including responsible cost cutting measures and significantly reduced hiring. In addition, in order to support our capital expenditure and growth plans, in the second quarter and July 2020, we raised more than $400 million through long term loans.

Despite our efforts to provide insight into the performance of our business and the trends affecting it, as of the date of this filing, significant uncertainty exists concerning the magnitude of the impact and duration of the COVID-19 pandemic. We may become subject to any of the following impacts:

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limitations on the ability of our suppliers to obtain raw materials that are required for the manufacturing of the products we either sell to third parties or build for ourselves or to meet delivery requirements and commitments that may result in penalty payments;

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impact on our efforts to sign new contracts for our Product segment due to operational and travel restrictions and availability of our customers and their willingness to enter into new agreements;

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limitations on the ability of our customers to pay us on a timely basis;

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lack or limited availability of capital or postponement of capital allocation for future growth;

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additional declarations of COVID-19 as force majeure by our customers and suppliers;

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a reduction in the demand for electricity and for our products;

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change in regulations, taxes and levies that may affect our operations and cost structure;

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risk of infection among employees that may impact the day-to-day operations;

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delays in obtaining the required permits that may impact our ability to implement our growth plan;

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limited ability to oversees remote operation due to travel restrictions.

Other Recent Developments

The most significant developments in our Company and business since January 1, 2020 are described below.

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As of August 2020, recommission efforts at Puna continue. Permits that are required for the construction and operation of the substation were received. Hawaii Electric Light Company ("HELCO") received the Public Utility Commission ("PUC") approval and started to construct the transmission network. On the field side, the Company connected one new production well to the power plant and is expected to enable partial production by the beginning of the fourth quarter. The Company continues its field recovery work, which includes drilling of new wells and expects gradual increase of generation to 29 MW by the end of the year, assuming the transmission network upgrade is completed and field recovery is successfully achieved.

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In July 2020, we completed the acquisition of the Pomona energy storage asset in California from Alta Gas for a total net consideration of $43.9 million. The Pomona energy storage facility has been in commercial operation since December 31, 2016 under a 10-year energy storage resource adequacy agreement with Southern California Edison Company. It also participates in the energy and ancillary services markets run by the California Independent System Operator. The facility is our first battery storage asset in operation in California, increasing our existing operating portfolio to 73MW/136MWh and adding to our battery storage assets in New Jersey, New England and Texas.

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In July 2020, we issued approximately $290.0 million of bonds (the "Bonds") that were issued in New Israeli Shekels and were converted to U.S. Dollars using a cross-currency swap transaction (the “Swap”) at an effective fixed interest rate of 4.34%. The $290 million of bonds will mature in June 2031 and bear, prior to the Swap, a fixed interest rate of 3.35% per annum, payable semi-annually starting December 2020. The Bonds will be repaid in 10 equal installments starting June 2022, unless prepaid earlier by Ormat pursuant to the terms and conditions of the trust instrument that will govern the Bonds. The Bonds received a rating of ilAA- from Maloot S&P in Israel with a stable outlook. In April and May 2020 we also raised approximately $130 million of new corporate debt from existing lenders.

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In June we completed the enhancement of our Steamboat Hills complex and increased its generating capacity by 19MW to a total of 84MW. Enhancement work included the replacement of all old generating unit equipment with new, state-of-the-art equipment and resource modifications. The new equipment will increase the productivity and efficiency of the power plant and is expected to reduce maintenance costs per kWh. The Steamboat Hills power plant continues to sell its electricity under the current 25-year long term portfolio power purchase agreement with Southern California Public Power Authority ("SCPPA"), with 100% of the capacity going to the Los Angeles Department of Water and Power.

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In April 2020, we announced the commercial operation of the Rabbit Hill Battery Energy Storage System ("BESS") facility, providing required ancillary services and energy optimization to the wholesale markets managed by the Electricity Reliability Council of Texas ("ERCOT"). The facility is located in the City of Georgetown, Texas, and it is sized to provide approximately 10 MW of fast responding capacity to the ERCOT market. Ormat’s wholly owned subsidiary Viridity Energy Solutions Inc. designed, built, owns and operates the lithium-Ion-based BESS, using batteries from a tier 1 supplier.

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In February 2020, we announced a transition of our senior management. Mr. Isaac Angel has decided to retire from his position as Chief Executive Officer, effective July 1, 2020, after six years of successful service to the Company, its employees and its shareholders. Mr. Angel became a member of Ormat’s Board of Directors and its chairman and will continue to be employed by the Company through December 31, 2020 in order to assist with the management transition. Ormat’s Board of Directors has appointed Mr. Blachar, the Company’s President and Chief Financial Officer, to succeed Mr. Angel. Mr. Doron Blachar assumed the role of Chief Executive Officer on July 1, 2020 upon Mr. Angel’s retirement. Mr. Blachar was succeeded in his role as Chief Financial Officer by Mr. Assaf Ginzburg, effective May 10, 2020.

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In January 2020, we signed two similar PPAs with Silicon Valley Clean Energy ("SVCE") and Monterey Bay Community Power ("MBCP"). Under the PPAs, SVCE and MBCP will each purchase 7 MW (for a total of 14 MW) of power generated by the expected 30 MW Casa Diablo-IV ("CD4") geothermal project located in Mammoth Lakes, California that is under construction. The PPAs are for a term of 10 years and have a fixed MWh price, which includes energy, capacity, environmental attributes, and all other ancillary benefits. The remaining 16 MW of generating capacity will be sold under an additional PPA with SCPPA, which was signed in early 2019. The CD4 power plant is expected to be on-line at the end of 2021, and will be the first geothermal power plant built within the California Independent System Operator ("CAISO") balancing authority in the last 30 years and will be the first in Ormat’s portfolio that will sell its output to a Community Choice Aggregator.

Trends and Uncertainties

Different trends, factors and uncertainties may impact our operations and financial condition, including many that we do not or cannot foresee. However, we believe that our results of operations and financial condition for the foreseeable future will be primarily affected by trends, factors and uncertainties discussed in our 2019 Annual Report under “Part II - Item 7 – Management Discussion and Analysis of Financial Condition and Results of Operation” in addition to the information set forth in this report. These trends, factors and uncertainties are from time to time also subject to market cycles.

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As COVID-19 threatens demand, oil prices have declined and could have consequences on the global transition to renewable energy and on governmental support for renewables. We believe that the direct impact of declining oil prices on us is not material. In addition, volatile natural gas prices may have an impact on ancillary services prices related to our Energy Storage and Management Services revenues.

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Revenues

For the six months ended June 30, 2020, 98.6% of our Electricity segment revenues were from PPAs with fixed energy rates, which are not affected by fluctuations in energy commodity prices. We have variable price PPAs in California and Hawaii, which provide for payments based on the local utilities’ avoided cost, which is the incremental cost that the power purchaser avoids by not having to generate such electrical energy itself or purchase it from others, as follows:

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the energy rates under the PPAs in California for each of Heber 2 power plant in the Heber Complex and the G2 power plant in the Mammoth Complex, a total of between 30 megawatts (MW) and 40 MW, change primarily based on fluctuations in natural gas prices; and

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the prices paid for the electricity pursuant to the 25 MW PPA for the Puna Complex in Hawaii change primarily as a result of variations in the price of oil as well as other commodities. We recently signed a new PPA related to Puna with fixed prices that will govern a future plant.

To comply with obligations under their respective PPAs, certain of our project subsidiaries are structured as special purpose, bankruptcy remote entities and their assets and liabilities are ring-fenced. Such assets are not generally available to pay our debt, other than debt at the respective project subsidiary level. However, these project subsidiaries are allowed to pay dividends and make distributions of cash flows generated by their assets to us, subject in some cases to restrictions in debt instruments, as described below.

Electricity segment revenues are also subject to seasonal variations and are affected by higher-than-average ambient temperatures, as described below under “Seasonality”.

Revenues attributable to our Product segment are based on the sale of equipment, engineering procurement and construction (“EPC”) contracts and the provision of various services to our customers. Product segment revenues may vary from period to period because of the timing of our receipt of purchase orders and the progress of our equipment manufacturing and execution of the relevant project.

Revenues attributable to our Energy Storage and Management Services segment are derived primarily from Battery Storage as a Service ("BSAAS") systems, demand response and energy management services and may fluctuate from period to period. Pricing of such services and products are dependent on market supply and demand trends, market volatility, the need and price for ancillary services and other factors that may change over time.

The following table sets forth a breakdown of our revenues for the periods indicated:

	Revenue (Dollars in thousands)								Increase (decrease)
	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019		2020		2019		2020					2020
Revenues:
Electricity	$	128,685	$	129,079	$	271,541	$	271,987	$	(394	)	-0.3	%	$	(446	)	-0.2	%
Product		43,701		52,030		91,112		104,158		(8,329	)	-16.0			(13,046	)	-12.5
Energy storage and management services		2,514		2,956		4,360		6,958		(442	)	-15.0			(2,598	)	-37.3
Total	$	174,900	$	184,065	$	367,013	$	383,103	$	(9,165	)	-5.0	%	$	(16,090	)	-4.2	%

	% of Revenues for Period Indicated
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenues:
Electricity		73.6	%		70.1	%		74.0	%		71.0	%
Product		25.0			28.3			24.8			27.2
Energy storage and management services		1.4			1.6			1.2			1.8
Total		100.0	%		100.0	%		100.0	%		100.0	%

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The following table sets forth the geographic breakdown of the revenues attributable to our Electricity, Product and Energy Storage and Management Services segments for the periods indicated:

	Revenue (Dollars in thousands)								Increase (decrease)
	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended June 30,					Six Months Ended June 30,
	2020		2019		2020		2019		2020					2020
Electricity Segment:
United States	$	80,427	$	76,931	$	172,119	$	168,459	$	3,496		4.5	%	$	3,660		2.2	%
Foreign		48,258		52,148		99,422		103,528		(3,890	)	-7.5			(4,106	)	-4.0
Total	$	128,685	$	129,079	$	271,541	$	271,987	$	(394	)	-0.3	%	$	(446	)	-0.2	%

Product Segment:
United States	$	2,269	$	12,532	$	2,667	$	23,775	$	(10,263	)	-81.9	%	$	(21,108	)	-88.8	%
Foreign		41,432		39,498		88,445		80,383		1,934		4.9			8,062		10.0
Total	$	43,701	$	52,030	$	91,112	$	104,158	$	(8,329	)	-16.0	%	$	(13,046	)	-12.5	%

Energy Storage and Management Services Segment:
United States	$	2,514	$	2,956	$	4,359	$	6,958	$	(442	)	-15.0	%	$	(2,599	)	-37.4	%
Total	$	2,514	$	2,956	$	4,359	$	6,958	$	(442	)	-15.0	%	$	(2,599	)	-37.4	%

	% of Revenues for Period Indicated
	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Electricity Segment:
United States		62.5	%		59.6	%		63.4	%		61.9	%
Foreign		37.5			40.4			36.6			38.1
Total		100.0	%		100.0	%		100.0	%		100.0	%

Product Segment:
United States		5.2	%		24.1	%		2.9	%		23	%
Foreign		94.8			75.9			97.1			77
Total		100.0	%		100.0	%		100.0	%		100.0	%

Energy Storage and Management Services Segment:
United States		100.0	%		100.0	%		100.0	%		100.0	%
Total		100.0	%		100.0	%		100.0	%		100.0	%

The contribution of our domestic and foreign operations within our Electricity segment and Product segment to combined pre-tax income differ in a number of ways.

In the six months ended June 30, 2020 and 2019, 51% and 48% of our revenues were derived from international operations, respectively, and our international operations were more profitable than our U.S. operations. A substantial portion of international revenues came from Kenya and Turkey and, to a lesser extent, from Guadeloupe, Guatemala and Honduras and other countries. Our operations in Kenya contributed disproportionately to gross profit and net income.

Electricity Segment. Our Electricity segment domestic revenues were approximately 63% and 62% of our total Electricity segment for both the six months ended June 30, 2020 and 2019, respectively. However, domestic operations in our Electricity segment have higher costs of revenues and expenses than the foreign operations in our Electricity segment. Our foreign power plants are located in lower-cost regions, like Kenya, Guatemala, Honduras and Guadeloupe, which favorably impact payroll, well-field and maintenance expenses among other items. They are also newer than most of our domestic power plants and therefore tend to have lower maintenance costs and higher availability factors than our domestic power plants.

Product Segment. Our Product segment foreign revenues were approximately 97% and 77% of our total Product segment revenues for the six months ended June 30, 2020 and 2019, respectively. Our Product segment foreign activity also benefits from lower costs of revenues and expenses than Product segment domestic activity such as labor and transportation costs. Accordingly, our Product segment foreign activity contributes more than our Product segment domestic activity to our pre-tax income from operations.

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In the six months ended June 30, 2020, the international operations in our Electricity segment accounted for 48% of our total gross profit, 70% of our net income and 44% of our EBITDA.

Seasonality

Electricity generation from some of our geothermal power plants is subject to seasonal variations; in the winter, our power plants produce more energy primarily attributable to the lower ambient temperature, which has a favorable impact on the energy component of our Electricity segment revenues and the prices under many of our contracts are fixed throughout the year with no time-of-use impact. The prices paid for electricity under the PPAs for the Heber 2 power plant in the Heber Complex, the Mammoth Complex and the North Brawley power plant in California, the Raft River power plant in Idaho and the Neal Hot Springs power plant in Oregon, are higher in the months of June through September. The higher payments payable under these PPAs in the summer months partially offset the negative impact on our revenues from lower generation in the summer attributable to a higher ambient temperature. As a result, we expect the revenues in the winter months to be higher than the revenues in the summer months and in general we expect the first and fourth quarters to generate higher revenues than the second and third quarters.

Breakdown of Cost of Revenues

The principal cost of revenues attributable to our three segments are discussed in our 2019 Annual Report under “Part II - Item 7 – Management Discussion and Analysis of Financial Condition and Results of Operation”.

Critical Accounting Estimates and Assumptions

A comprehensive discussion of our critical accounting estimates and assumptions is included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our 2019 Annual Report.

New Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements set forth in Item 1 of this quarterly report for information regarding new accounting pronouncements.

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Results of Operations

Our historical operating results in dollars and as a percentage of total revenues are presented below. A comparison of the different years described below may be of limited utility due to (i) our recent construction of power plants and enhancement of acquired power plants; (ii) fluctuation in revenues from our Product segment; and (iii) the impact of the lava eruption on our Puna plant in Hawaii and the related insurance proceeds.

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands, except per share data)						(Dollars in thousands, except per share data)
Statements of Operations Historical Data:
Revenues:
Electricity	$	128,685		$	129,079		$	271,541		$	271,987
Product		43,701			52,030			91,112			104,158
Energy storage and management services		2,514			2,956			4,360			6,958
Total Revenues		174,900			184,065			367,013			383,103
Cost of revenues:
Electricity		71,950			73,775			143,318			151,318
Product		34,709			41,316			71,687			83,422
Energy storage and management services		2,855			3,827			4,804			9,037
Total cost of revenues		109,514			118,918			219,809			243,777
Gross profit
Electricity		56,735			55,304			128,223			120,669
Product		8,992			10,714			19,425			20,736
Energy storage and management services		(341	)		(871	)		(444	)		(2,079	)
Total gross profit		65,386			65,147			147,204			139,326
Operating expenses:
Research and development expenses		1,172			810			2,791			1,710
Selling and marketing expenses		4,854			3,276			9,648			7,141
General and administrative expenses		11,285			14,181			25,633			29,870
Operating income		48,075			46,880			109,132			100,605
Other income (expense):
Interest income		441			420			843			713
Interest expense, net		(19,785	)		(21,517	)		(37,058	)		(42,740	)
Derivatives and foreign currency transaction gains (losses)		671			19			1,064			491
Income attributable to sale of tax benefits		5,672			4,637			9,804			12,401
Other non-operating income (expense), net		304			1,027			382			1,118
Income from operations before income tax and equity in earnings (losses) of investees		35,378			31,466			84,167			72,588
Income tax (provision) benefit		(11,766	)		3,529			(29,914	)		(10,510	)
Equity in earnings (losses) of investees, net		1,658			1,202			923			2,249
Net income		25,270			36,197			55,176			64,327
Net income attributable to noncontrolling interest		(2,224	)		(2,259	)		(6,097	)		(4,443	)
Net income attributable to the Company's stockholders	$	23,046		$	33,938		$	49,079		$	59,884
Earnings per share attributable to the Company's stockholders:
Basic:
Net income	$	0.45		$	0.67		$	0.96		$	1.18
Diluted:
Net income	$	0.45		$	0.66		$	0.95		$	1.17
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:
Basic		51,043			50,800			51,040			50,757
Diluted	$	51,362		$	51,094		$	51,448		$	51,058

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	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Statements of Operations Data:
Revenues:
Electricity		73.6	%		70.1	%		74.0	%		71.0	%
Product		25.0			28.3			24.8			27.2
Energy storage and management services		1.4			1.6			1.2			1.8
Total Revenues		100.0			100.0			100.0			100.0
Cost of revenues:
Electricity		55.9			57.2			52.8			55.6
Product		79.4			79.4			78.7			80.1
Energy storage and management services		113.6			129.5			110.2			129.9
Total cost of revenues		62.6			64.6			59.9			63.6
Gross profit
Electricity		44.1			42.8			47.2			44.4
Product	20.6			20.6				21.3			19.9
Energy storage and management services		(13.6	)		(29.5	)		(10.2	)		(29.9	)
Total gross profit		37.4			35.4			40.1			36.4
Operating expenses:
Research and development expenses		0.7			0.4			0.8			0.4
Selling and marketing expenses		2.8			1.8			2.6			1.9
General and administrative expenses		6.5			7.7			7.0			7.8
Operating income		27.5			25.5			29.7			26.3
Other income (expense):
Interest income		0.3			0.2			0.2			0.2
Interest expense, net		(11.3	)		(11.7	)		(10.1	)		(11.2	)
Derivatives and foreign currency transaction gains (losses)		0.4			0.0			0.3			0.1
Income attributable to sale of tax benefits		3.2			2.5			2.7			3.2
Other non-operating income (expense), net		0.2			0.6			0.1			0.3
Income from operations before income tax and equity in earnings (losses) of investees	20.2				17.1			22.9			18.9
Income tax (provision) benefit		(6.7	)		1.9			(8.2	)		(2.7	)
Equity in earnings (losses) of investees, net		0.9			0.7			0.3			0.6
Net income		14.4			19.7			15.0			16.8
Net income attributable to noncontrolling interest		(1.3	)		(1.2	)		(1.7	)		(1.2	)
Net income attributable to the Company's stockholders		13.2	%		18.4	%		13.4	%		15.6	%

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Comparison of the Three Months Ended June 30, 2020 and the Three Months Ended June 30, 2019

Total Revenues

	Three Months Ended June 30,
	2020		2019		Change
	(Dollars in millions)
Electricity segment revenues	$	128.7	$	129.1		(0.3	%)
Product segment revenues		43.7		52.0		(16.0	)
Energy Storage and Management Services segment revenues		2.5		3.0		(15.0	)
Total revenues	$	174.9	$	184.1		(5.0	%)

Total revenues for the three months ended June 30, 2020 were $174.9 million, compared to $184.1 million for the three months ended June 30, 2019, which represented a 5.0% decrease from the prior year period. This decrease was attributable to a $8.3 million, or 16.0% decrease in our Product segment revenues compared to the corresponding period in 2019, and a $0.4 million, or 15.0% decrease in Energy Storage and Management Services segment revenues as compared to the corresponding period in 2019, all as discussed below. Electricity segment revenues remained almost flat.

Electricity Segment

Revenues attributable to our Electricity segment for the three months ended June 30, 2020 were $128.7 million, compared to $129.1 million for the three months ended June 30, 2019.

Power generation in our power plants decreased by 4.7% from 1,516,060 MWh in the three months ended June 30, 2019 to 1,444,249 MWh in the three months ended June 30, 2020 mainly due to the lower generation at our OREG facilities and curtailments in the Olkaria power plant driven, inter alia, by the affect of COVID 19 in Kenya. However, revenues remained unchanged because of different energy rates under our portfolio contracts.

Product Segment

Revenues attributable to our Product segment for the three months ended June 30, 2020 were $43.7 million, compared to $52.0 million for the three months ended June 30, 2019, which represented a 16.0% decrease. The decrease in our Product segment revenues was mainly due to projects in Turkey and the U.S., which were completed in 2019, which accounted for $23.6 million in Product segment revenues in the three months ended June 30, 2019. The decrease was partially offset by other projects in Turkey which were started in 2020, and provided $19.5 million in revenue recognized during the three months ended June 30, 2020.

Energy Storage and Management Services Segment

Revenues attributable to our Energy Storage and Management Services segment for the three months ended June 30, 2020 were $2.5 million compared to $3.0 million for the three months ended June 30, 2019. The decline is mainly due to the impact of COVID 19 on the frequency regulation market prices. The Energy Storage and Management Services segment includes revenues from the delivery of energy storage demand response and energy management services.

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Total Cost of Revenues

	Three Months Ended June 30,
	2020		2019		Change
	(Dollars in millions)
Electricity segment cost of revenues	$	72.0	$	73.8		(2	%)
Product segment cost of revenues		34.7		41.3		(16	)
Energy Storage and Management Services segment cost of revenues		2.9		3.8		(25	)
Total cost of revenues	$	109.5	$	118.9		(8	%)

Total cost of revenues for the three months ended June 30, 2020 was $109.5 million, compared to $118.9 million for the three months ended June 30, 2019, which represented an 7.9% decrease. This decrease was attributable to a decrease of $1.8 million, or 2.5%, in cost of revenues from our Electricity segment, a decrease of $6.6 million, or 16.0%, in cost of revenues from our Product segment and a decrease of $1.0 million, or 25.4%, in cost of revenues from our Energy Storage and Management Services segment generated by our Viridity business, all as discussed below. As a percentage of total revenues, our total cost of revenues for the three months ended June 30, 2020 decreased to 62.6% from 64.6% for the three months ended June 30, 2019.

Electricity Segment

Total cost of revenues attributable to our Electricity segment for the three months ended June 30, 2020 was $72.0 million, compared to $73.8 million for the three months ended June 30, 2019. This decrease was primarily attributable to lower operational costs in some of our power plants in the three months ended June 30, 2020 compared to the three months ended June 30, 2019 and a decrease in lease expense of $1.3 million due to the termination of the lease transaction. Cost of revenues at our Puna power plant that was shut down immediately following the Kilauea volcanic eruption on May 3, 2018, includes business interruption recovery of $2.7 million, in the three months ended June 30, 2020 , compared to $6.9 million in the three months ended June 30, 2019. As a percentage of total Electricity revenues, our total cost of revenues attributable to our Electricity segment for the three months ended June 30, 2020 was 55.9%, compared to 57.2% for the three months ended June 30, 2019. This decrease was primarily attributable to the increase in gross profit relating to lower operational costs in some of our power plants. The cost of revenues attributable to our international power plants was 22.4% of our Electricity segment cost of revenues.

Product Segment

Total cost of revenues attributable to our Product segment for the three months ended June 30, 2020 was $34.7 million, compared to $41.3 million for the three months ended June 30, 2019, which represented a 16.0% decrease. This decrease was primarily attributable to the decrease in Product segment revenues, different product scope and different margins in the various sales contracts we entered into mainly in Turkey, New Zealand and Chile for the Product segment during these periods. As a percentage of total Product segment revenues, our total cost of revenues attributable to our Product segment for both the three months ended June 30, 2020 and 2019, was 79.4%.

Energy Storage and Management Services Segment

Cost of revenues attributable to our Energy Storage and Management Services segment for the three months ended June 30, 2020 were $2.9 million compared to $3.8 million for the three months ended June 30, 2019. The Energy Storage and Management Services segment includes cost of revenues related to the delivery of energy storage, demand response and energy management services.

Research and Development Expenses, Net

Research and development expenses for the three months ended June 30, 2020 were $1.2 million, compared to $0.8 million for the three months ended June 30, 2019. The increase is mainly attributable to new development projects that took place during 2020.

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Selling and Marketing Expenses

Selling and marketing expenses for the three months ended June 30, 2020 were $4.9 million compared to $3.3 million for the three months ended June 30, 2019. The increase was primarily due to an increase in sales commissions due to different product mix and increase in marketing activities. Selling and marketing expenses for the three months ended June 30, 2020 constituted 2.8% of total revenues for such period, compared to 1.8% for the three months ended June 30, 2019.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2020 were $11.3 million compared to $14.2 million for the three months ended June 30, 2019. The decrease was primarily attributable to a gain of $1.3 million from sale of concession, business interruption recovery of $0.6 million relating to the Puna power plant and a decrease in professional fees and travel costs. General and administrative expenses for the three months ended June 30, 2020 constituted 6.5% of total revenues for such period, compared to 7.7% for the three months ended June 30, 2019.

Operating Income

Operating income for the three months ended June 30, 2020 was $48.1 million, compared to $46.9 million for the three months ended June 30, 2019, which represented a 2.5% increase. The increase in operating income was primarily attributable to the increase in our Electricity segment gross margin, and a decrease in General and administrative expenses, offset partially by a decrease in our Product segment gross margin, as discussed above. Operating income attributable to our Electricity segment for the three months ended June 30, 2020 was $45.9 million, compared to $43.5 million for the three months ended June 30, 2019. Operating income attributable to our Product segment for the three months ended June 30, 2020 was $3.8 million, compared to $5.3 million for the three months ended June 30, 2019. Operating loss attributable to our Energy Storage and Management Services segment for the three months ended June 30, 2020 was $1.6 million compared to $1.9 million for the three months ended June 30, 2019.

Interest Expense, Net

Interest expense, net for the three months ended June 30, 2020 was $19.8 million, compared to $21.5 million for the three months ended June 30, 2019. This decrease was primarily due to: (i) $0.7 million decrease in interest related to the sale of tax benefits; (ii) $1.9 million increase in interest capitalized to projects offset by $0.7 million increase in interest expense primarily as a result of $79.8 million of proceeds from a senior unsecured bonds series 3 received on April and May 2020; and (ii) $50.0 million of proceeds from a senior unsecured loan received on April 2020.

Derivatives and Foreign Currency Transaction Gains (Losses)

Derivatives and foreign currency transaction gains for the three months ended June 30, 2020 were $0.7 million, compared to $0.0 million for the three months ended June 30, 2019. Derivatives and foreign currency transaction gains for the three months ended June 30, 2020 and 2019, respectively, were primarily attributable to gains from foreign currency forward contracts which were not accounted for as hedge transactions.

Income Attributable to Sale of Tax Benefits

Income attributable to the sale of tax benefits for the three months ended June 30, 2020 was $5.7 million, compared to $4.6 million for the three months ended June 30, 2019. Tax equity is a form of financing used for renewable energy projects. This income primarily represents the value of PTCs and taxable income or loss generated by certain of our power plants allocated to investors under tax equity transactions.

Other Non-Operating Income (Expense), Net

Other non-operating income for the three months ended June 30, 2020 was $0.3 million, compared to $1.0 million for the three months ended June 30, 2019. Other non-operating income for the three months ended June 30, 2019 mainly includes an income of $1.0 million from the sale of PG&E receivables relating to the January 2019 monthly invoice which was not paid as it occurred before PG&E filed for reorganization under Chapter 11 bankruptcy.

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Income Taxes

Income tax provision for the three months ended June 30, 2020 was $11.8 million compared to income tax benefit of $3.5 million for the three months ended June 30, 2019. Our effective tax rate for the three months ended June 30, 2020 and 2019, was 33.3% and (11.2)%, respectively. The effective rate differs from the federal statutory rate of 21% for the three months ended June 30, 2020 due to (i) the mix of business in various countries with higher statutory tax rates than the federal statutory tax rate; (ii) a net increase in the valuation allowance on deferred tax assets related to Production Tax Credits ("PTC"); and (iii) partially offset by tax depreciation benefits related to intra-entity transfers of assets.

Equity in Earnings (losses) of Investees, Net

Equity in earnings of investees, net for the three months ended June 30, 2020 was $1.7 million, compared to equity in earnings of investees, net of $1.2 million for the three months ended June 30, 2019. Equity in earnings of investees, net is mainly derived from our 12.75% share in the earnings or losses in the Sarulla Consortium (Sarulla). The increase was mainly due to revaluation of the local currency compared to the U.S. dollar in the second quarter of 2020. The increase was offset by a decrease mainly attributable to gross margin due to well-field issues in the NIL power plant which resulted in lower generation. Sarulla is currently developing a remediation plan with a target to increase generation in the near-term back to previous levels. We are following the remediation plans in Sarulla as well as the accounting impact and its implication on our financial statements and our investment in Sarulla.

Net Income

Net income for the three months ended June 30, 2020 was $25.3 million, compared to $36.2 million for the three months ended June 30, 2019, which represents a decrease of $10.9 million. This decrease in net income was primarily attributable to an increase of $15.3 million in income tax provision, partially offset by, an increase of $1.2 million in operating income and a decrease of $1.7 million in interest expense, net.

Net Income Attributable to the Company’s Stockholders

Net income attributable to the Company’s stockholders for the three months ended June 30, 2020 was $23.0 million, compared to net income attributable to the Company’s stockholders of $33.9 million for the three months ended June 30, 2019, which represents a decrease of $10.9 million. This decrease was attributable to the decrease in net income of $10.9 million.

Comparison of the Six Months Ended June 30, 2020 and the Six Months Ended June 30, 2019

	Six Months Ended June 30,
	2020		2019		Change
	(Dollars in millions)
Electricity segment revenues	$	271.5	$	272.0		—	%
Product segment revenues		91.1		104.2		(13	%)
Energy Storage and Management Services segment revenues		4.4		7.0		(37	%)
Total revenues	$	367.0	$	383.1		(4	%)

Total Revenues

Total revenues for the six months ended June 30, 2020 were $367.0 million, compared to $383.1 million for the six months ended June 30, 2019, which represented a 4.2% decrease from the prior year period. This decrease was attributable to a $13.0 million or 12.5% decrease in our Product segment revenues compared to the corresponding period in 2019, and a $2.6 million, or 37.3% decrease in Energy Storage and Management Services segment revenues as compared to the corresponding period in 2019, all as discussed below. Electricity segment revenues remained almost flat.

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Electricity Segment

Revenues attributable to our Electricity segment for the six months ended June 30, 2020 were $271.5 million, compared to $272.0 million for the six months ended June 30, 2019.

Power generation in our power plants had a decrease of 3.7% from 3,205,903 MWh in the six months ended June 30, 2019 to 3,087,575 MWh in the six months ended June 30, 2020 due to the lower generation at some of our power plants, including our OREG facilities and Olkaria complex that were impacted by lower demand due to COVID 19. However, revenues remained unchanged because of different energy rates under our portfolio contracts.

Product Segment

Revenues attributable to our Product segment for the six months ended June 30, 2020 were $91.1 million, compared to $104.2 million for the six months ended June 30, 2019, which represented a 12.5% decrease. The decrease in our Product segment revenues was mainly due to projects in Turkey and the U.S., which were completed in 2019 and accounted for $68.3 million in revenues in the six months ended June 30, 2019. The decrease was partially offset by other projects in Turkey, New Zealand and Chile, which started in 2019, and provided $60.0 million in revenue recognized during the six months ended June 30, 2020 compared to $19.0 million for the six months ended June 30, 2019, and other projects in Turkey, which started in 2020 and provided $19.5 million for the six months ended June 30, 2020.

Energy Storage and Management Services Segment

Revenues attributable to our Energy Storage and Management Services segment for the six months ended June 30, 2020 were $4.4 million compared to $7.0 million for the six months ended June 30, 2019. The decrease was mainly driven by revenues from a one-time EPC project in the amount of $2.4 million in the six months ended June 30, 2019. The Energy Storage and Management Services segment includes revenues from the delivery of energy storage demand response and energy management services.

Total Cost of Revenues

	Six Months Ended June 30,
	2020		2019		Change
	(Dollars in millions)
Electricity segment cost of revenues	$	143.3	$	151.3		(5	%)
Product segment cost of revenues		71.7		83.4		(14	%)
Energy Storage and Management Services segment cost of revenues		4.8		9.0		(47	%)
Total cost of revenues	$	219.8	$	243.8		(10	%)

Total cost of revenues for the six months ended June 30, 2020 was $219.8 million, compared to $243.8 million for the six months ended June 30, 2019, which represented a 9.8% decrease. This decrease was attributable to a decrease of $8.0 million, or 5.3%, in cost of revenues from our Electricity segment, a decrease of $11.7 million, or 14.1%, in cost of revenues from our Product segment and a decrease of $4.2 million, or 46.8%, in cost of revenues from our Energy Storage and Management Services segment generated by our Viridity business, all as discussed below. As a percentage of total revenues, our total cost of revenues for the six months ended June 30, 2020 decreased to 59.9% from 63.6% for the six months ended June 30, 2019.

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Electricity Segment

Total cost of revenues attributable to our Electricity segment for the six months ended June 30, 2020 was $143.3 million, compared to $151.3 million for the six months ended June 30, 2019. This decrease was primarily attributable to a decrease in cost of revenues at our Puna power plant that was shut down immediately following the Kilauea volcanic eruption on May 3, 2018, as the cost of revenues at our Puna power plant for the six months ended June 30, 2020 includes a decrease in lease expense of $2.6 million due to the termination of the lease transaction. The decrease was also due to lower operational costs in some of our power plants in the six months ended June 30, 2020 compared to the six months ended June 30, 2019. Cost of revenues at our Puna power plant, which includes business interruption recovery of $5.2 million in the six months ended June 30, 2020 , compared to $8.1 million in the six months ended June 30, 2019. As a percentage of total Electricity revenues, our total cost of revenues attributable to our Electricity segment for the six months ended June 30, 2020 was 52.8%, compared to 55.6% for the six months ended June 30, 2019. The cost of revenues attributable to our international power plants was 22.3% of our Electricity segment cost of revenues.

Product Segment

Total cost of revenues attributable to our Product segment for the six months ended June 30, 2020 was $71.7 million, compared to $83.4 million for the six months ended June 30, 2019, which represented a 14.1% decrease. This decrease was primarily attributable to the decrease in Product segment revenues, different product scope and different margins in the various sales contracts we entered into mainly in Turkey, New Zealand and Chile for the Product segment during these periods. As a percentage of total Product segment revenues, our total cost of revenues attributable to our Product segment for the six months ended June 30, 2020 was 78.7%, compared to 80.1% for the six months ended June 30, 2019.

Energy Storage and Management Services Segment

Cost of revenues attributable to our Energy Storage and Management Services segment for the six months ended June 30, 2020 were $4.8 million compared to $9.0 million for the six months ended June 30, 2019. The decrease was mainly driven by cost of revenues from a one-time EPC project in the amount of $1.9 million in the six months ended June 30, 2019. The Energy Storage and Management Services segment includes cost of revenues related to the delivery of energy storage, demand response and energy management services.

Research and Development Expenses, Net

Research and development expenses for the six months ended June 30, 2020 were $2.8 million, compared to $1.7 million for the six months ended June 30, 2019. The increase is mainly due to new development projects that took place during the six months ended June 30, 2020.

Selling and Marketing Expenses

Selling and marketing expenses for the six months ended June 30, 2020 were $9.6 million compared to $7.1 million for the six months ended June 30, 2019. The increase was mainly due to an increase in sales commissions due to different product mix and increase in marketing activities. Selling and marketing expenses for the six months ended June 30, 2020 constituted 2.6% of total revenues for such period, compared to 1.9% for the six months ended June 30, 2019.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2020 were $25.6 million compared to $29.9 million for the six months ended June 30, 2019. The decrease was primarily attributable to business interruption recovery of $3.0 million relating to the Puna power plant, a decrease in professional fees, and $1.3 million gain from sale of concession, partially offset by $1.3 million in costs associated with one of our legal claims. General and administrative expenses for the six months ended June 30, 2020 constituted 7.0% of total revenues for such period, compared to 7.8% for the six months ended June 30, 2019.

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Operating Income

Operating income for the six months ended June 30, 2020 was $109.1 million, compared to $100.6 million for the six months ended June 30, 2019, which represented an 8.5% increase. The increase in operating income was attributable to the increase in our Electricity segment gross margin, and a decrease in general and administrative expenses, as discussed above, offset partially by a decrease in our Product segment gross margin. Operating income attributable to our Electricity segment for the six months ended June 30, 2020 was $104.5 million, compared to $95.0 million for the six months ended June 30, 2019. Operating income attributable to our Product segment for the six months ended June 30, 2020 was $7.7 million, compared to $9.6 million for the six months ended June 30, 2019. Operating loss attributable to our Energy Storage and Management Services segment for the six months ended June 30, 2020 was $3.0 million compared to $4.0 million for the six months ended June 30, 2019.

Interest Expense, Net

Interest expense, net for the six months ended June 30, 2020 was $37.1 million, compared to $42.7 million for the six months ended June 30, 2019. This decrease was primarily due to (i) $2.0 million decrease in interest related to the sale of tax benefits; (ii) $4.1 million increase in interest capitalized to projects and (iii) lower interest expense as a result of principal payments of long term debt. The decrease was partially offset by interest expense from: (i) $79.8 million of proceeds from a senior unsecured bonds series 3 received on April and May 2020; and (ii) $50.0 million of proceeds from a senior unsecured loan received on April 2020.

Derivatives and Foreign Currency Transaction Gains (Losses)

Derivatives and foreign currency transaction gains for the six months ended June 30, 2020 were $1.1 million, compared to $0.5 million for the six months ended June 30, 2019. Derivatives and foreign currency transaction gains for the six months ended June 30, 2020 and 2019, were primarily attributable to gains from foreign currency forward contracts which were not accounted for as hedge transactions.

Income Attributable to Sale of Tax Benefits

Income attributable to the sale of tax benefits for the six months ended June 30, 2020 was $9.8 million, compared to $12.4 million for the six months ended June 30, 2019. Tax equity is a form of financing used for renewable energy projects. This income primarily represents the value of PTCs and taxable income or loss generated by certain of our power plants allocated to investors under tax equity transactions.

Other Non-Operating Income (Expense), Net

Other non-operating income for the six months ended June 30, 2020 was $0.4 million, compared to $1.1 million for the six months ended June 30, 2019. Other non-operating income for the six months ended June 30, 2019 mainly includes an income of $1.0 million from the sale of PG&E receivables relating to the January 2019 monthly invoice which was not paid as it occurred before PG&E filed for reorganization under Chapter 11 bankruptcy.

Income Taxes

Income tax provision for the six months ended June 30, 2020 was $29.9 million compared to $10.5 million for the six months ended June 30, 2019. Our effective tax rate for the six months ended June 30, 2020 and June 30, 2019, was 35.5% and 14.5%, respectively. The effective rate differs from the federal statutory rate of 21% for the six months ended June 30, 2020 due to (i) the mix of business in various countries with higher statutory tax rates than the federal statutory tax rate; (ii) a net increase in the valuation allowance on deferred tax assets related to Production Tax Credits ("PTC"); and (iii) partially offset by tax depreciation benefits related to intra-entity transfers of assets.

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Equity in Earnings (losses) of Investees, Net

Equity in earnings of investees, net for the six months ended June 30, 2020 was $0.9 million, compared to $2.2 million for the six months ended June 30, 2019. Equity in earnings of investees, net is mainly derived from our 12.75% share in the earnings or losses in Sarulla. The decrease was mainly attributable to a decrease in gross margin due to well-field issues in the NIL power plant which resulted in lower generation. Sarulla is currently developing a remediation plan with a target to increase generation in the near-term back to previous levels. We are following the remediation plans in Sarulla as well as the accounting impact and its implication on our financial statements and our investment in Sarulla.

Net Income

Net income for the six months ended June 30, 2020 was $55.2 million, compared to $64.3 million for the six months ended June 30, 2019, which represents a decrease of $9.2 million. This decrease in net income was primarily attributable to an increase in income tax provision of $19.4 million, partially offset by an increase of $8.5 million in operating income and a decrease of $5.7 million in interest expense, net.

Net Income Attributable to the Company’s Stockholders

Net income attributable to the Company’s stockholders for the six months ended June 30, 2020 was $49.1 million, compared to $59.9 million for the six months ended June 30, 2019, which represents a decrease of $10.8 million. This decrease was attributable to the decrease in net income of $9.2 million, and the increase of $1.7 million in net income attributable to noncontrolling interest mainly due to the business interruption recovery of the Puna power plant in Hawaii, all as discussed above.

Liquidity and Capital Resources

Our principal sources of liquidity have been derived from cash flows from operations, proceeds from third party debt such as borrowings under our credit facilities, offerings and issuances of debt securities, project financing, tax monetization transactions, short term borrowing under our lines of credit, and proceeds from the sale of equity interests in one or more of our projects. We have utilized this cash to develop and construct power plants, fund our acquisitions, pay down existing outstanding indebtedness, and meet our other cash and liquidity needs.

As of June 30, 2020, we had access to (i) $173.7 million in cash and cash equivalents, of which $102.5 million is held by our foreign subsidiaries; and (ii) $285.0 million of unused corporate borrowing capacity under existing committed lines of credit with different commercial banks.

Our estimated capital needs for the remainder of 2020 include $207.0 million for capital expenditures on new projects under development or construction including storage projects, exploration activity and maintenance capital expenditures for our existing projects. In addition, $207.6 million will be needed for debt repayment, including $100.0 million repayment of short-term revolving line of credit that we assume will be renewed.

As of June 30, 2020, $100.0 million was outstanding under a credit agreement with one of the financial institutions as described below under "Credit Agreements".

We expect to finance these requirements with: (i) the sources of liquidity described above; (ii) positive cash flows from our operations; and (iii) future project financings and re-financings (including construction loans and tax equity). Management believes that, based on the current stage of implementation of our strategic plan, the sources of liquidity and capital resources described above will address our anticipated liquidity, capital expenditures, and other investment requirements.

As of June 30, 2020, we continue to maintain our assertion to no longer indefinitely reinvest foreign funds held by our foreign subsidiaries, with the exception of a certain balance held in Israel, and have accrued the incremental foreign withholding taxes. Accordingly, during the six months ended June 30, 2020, we included a foreign income tax expense of $3.1 million related to foreign withholding taxes on accumulated earnings of all of our foreign subsidiaries.

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Letters of Credits Under Credit Agreements

Some of our customers require our project subsidiaries to post letters of credit in order to guarantee their respective performance under relevant contracts. We are also required to post letters of credit to secure our obligations under various leases and licenses and may, from time to time, decide to post letters of credit in lieu of cash deposits in reserve accounts under certain financing arrangements. In addition, our subsidiary, Ormat Systems, is required from time to time to post performance letters of credit in favor of our customers with respect to orders of products.

Credit Agreements	Issued Amount		Issued and Outstanding as of		Termination Date
			June 30, 2020
	(Dollars in millions)
Committed lines for credit and letters of credit		416.0		31.2	March 2021-July 2022
Committed lines for letters of credit		207.0		166.4	September 2020-September 2021
Non-committed lines		-		10.1	December 2020
Total		623.0		207.7

Restrictive Covenants

Our obligations under the credit agreements, the loan agreements, and the trust instrument governing the bonds described above, are unsecured, but we are subject to a negative pledge in favor of the banks and the other lenders and certain other restrictive covenants. These include, among other things, restraints on: (i) creating any floating charge or any permanent pledge, charge or lien over our assets without obtaining the prior written approval of the lender; (ii) guaranteeing the liabilities of any third party without obtaining the prior written approval of the lender; and (iii) selling, assigning, transferring, conveying or disposing of all or substantially all of our assets, or a change of control in our ownership structure. Some of the credit agreements, the term loan agreements, and the trust instrument contain cross-default provisions with respect to other material indebtedness owed by us to any third party. In some cases, we have agreed to maintain certain financial ratios, which are measured quarterly, such as: (i) equity of at least $600 million and in no event less than 25% of total assets; (ii) 12-month debt, net of cash, cash equivalents, and short-term bank deposits to Adjusted EBITDA ratio not to exceed 6.0; and (iii) dividend distributions not to exceed 35% of net income in any calendar year. As of June 30, 2020: (i) total equity was $1,556.8 million and the actual equity to total assets ratio was 45.5% and (ii) the 12-month debt, net of cash, cash equivalents, to Adjusted EBITDA ratio was 3.0. During the six months ended June 30, 2020, we distributed interim dividends in an aggregate amount of $11.3 million. The failure to perform or observe any of the covenants set forth in such agreements, subject to various cure periods, would result in the occurrence of an event of default and would enable the lenders to accelerate all amounts due under each such agreement.

As described above, we are currently in compliance with our covenants with respect to the credit agreements, the loan agreements and the trust instrument, and believe that the restrictive covenants, financial ratios and other terms of any of our full-recourse bank credit agreements will not materially impact our business plan or operations.

Future minimum payments

Future minimum payments under long-term obligations, excluding revolving credit lines with commercial banks, as of June 30, 2020, are as follows:

	(Dollars in thousands)
Year ending December 31:
2020	$	107,686
2021		85,397
2022		312,152
2023		107,814
2024		89,520
Thereafter		604,601
Total	$	1,307,170

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Third-Party Debt

Our third-party debt consists of (i) non-recourse and limited-recourse project finance debt or acquisition financing debt that we or our subsidiaries have obtained for the purpose of developing and constructing, refinancing or acquiring our various projects and (ii) full-recourse debt incurred by us or our subsidiaries for general corporate purposes.

Non-Recourse and Limited-Recourse Third-Party Debt

Loan	Issued Amount	Outstanding Amount as of	Interest Rate	Maturity Date	Related Project	Location
		June 30, 2020
	(Dollars in millions)
OFC 2 Senior Secured Notes – Series A	151.7	92.0	4.67%	2032	McGinness Hills phase 1 and Tuscarora	U.S.
OFC 2 Senior Secured Notes – Series B	140.0	106.4	4.61%	2032	McGinness Hills phase 2	U.S.
Olkaria III Financing Agreement with OPIC – Tranche 1	85.0	49.6	6.34%	2030	Olkaria III Complex	Kenya
Olkaria III Financing Agreement with OPIC – Tranche 2	180.0	105.9	6.29%	2030	Olkaria III Complex	Kenya
Olkaria III Financing Agreement with OPIC – Tranche 3	45.0	28.2	6.12%	2030	Olkaria III Complex	Kenya
Amatitlan Financing⁽¹⁾	42.0	24.5	LIBOR+4.35%	2027	Amatitlan	Guatemala
Don A. Campbell Senior Secured Notes	92.5	75.2	4.03%	2033	Don A. Campbell Complex	U.S.
Prudential Capital Group Idaho Loan⁽²⁾	20.0	17.7	5.80%	2023	Neal Hot Springs and Raft River	U.S.
U.S. Department of Energy Loan⁽³⁾	96.8	43.4	2.60%	2035	Neal Hot Springs	U.S.
Prudential Capital Group Nevada Loan	30.7	26.9	6.75%	2037	San Emidio	U.S.
Platanares Loan with OPIC	114.7	100.4	7.02%	2032	Platanares	Honduras
Viridity - Plumstriker	23.5	20.0	LIBOR+3.5%	2026	Plumsted+Striker	U.S.
Géothermie Bouillante⁽⁴⁾	8.9	7.7	1.52%	2026	Géothermie Bouillante	Guadeloupe
Géothermie Bouillante⁽⁴⁾	8.9	9.0	1.93%	2026	Géothermie Bouillante	Guadeloupe
Total	1,039.7	706.9

LIBO Rate cannot be lower than 1.25%. Margin of 4.35% as long as the Company’s guaranty of the loan is outstanding (current situation) or 4.75% otherwise.

Secured by equity interest.

Secured by the assets.

Loan in Euro and issued amount is EUR 8.0 million

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Full-Recourse Third-Party Debt

Loan	Issued Amount	Outstanding Amount as of	Interest Rate	Maturity Date
		June 30, 2020
	(Dollars in millions)
Senior Unsecured Bonds Series 2	67.2	67.2	3.70%	September 2020
Senior Unsecured Bonds Series 3	218.0	218.0	4.45%	September 2022
Commercial paper ⁽¹⁾	50.0	3.8	3 month LIBOR+0.75%	⁽²⁾
Senior unsecured Loan 1	100.0	100.0	4.8%	March 2029
Senior unsecured Loan 2	50.0	50.0	4.60%	March 2029
Senior unsecured Loan 3	50.0	50.0	5.44%	March 2029
DEG Loan 2	50.0	40.0	6.28%	June 2028
DEG Loan 3	41.5	34.9	6.04%	June 2028
Total	626.7	563.9

⁽¹⁾Current interest rate is 2.2%.

⁽²⁾Commercial paper was fully prepaid on July 20, 2020

Liquidity Impact of Uncertain Tax Positions

The Company has a liability associated with unrecognized tax benefits and related interest and penalties in the amount of approximately $15.3 million as of June 30, 2020. This liability is included in long-term liabilities in our condensed consolidated balance sheet because we generally do not anticipate that settlement of the liability will require payment of cash within the next twelve months. We are not able to reasonably estimate when we will make any cash payments required to settle this liability.

Dividends

The following are the dividends declared by us since June 30, 2018:

Date Declared	Dividend Amount per Share		Record Date	Payment Date
August 7, 2018	$	0.10	August 21, 2018	August 29, 2018
November 6, 2018	$	0.10	November 20, 2018	December 4, 2018
February 26, 2019	$	0.11	March 14, 2019	March 28, 2019
May 6, 2019	$	0.11	May 20, 2019	May 28, 2019
August 7, 2019	$	0.11	August 20, 2019	August 27, 2019
November 6, 2019	$	0.11	November 20, 2019	December 4, 2019
February 25, 2020	$	0.11	March 12, 2020	March 26, 2020
May 8, 2020	$	0.11	May 21, 2020	June 2, 2020
August 4, 2020	$	0.11	August 18, 2020	September 1, 2020

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Historical Cash Flows

The following table sets forth the components of our cash flows for the periods indicated:

	Six Months Ended June 30,
	2020			2019
	(Dollars in thousands)
Net cash provided by operating activities	$	154,354		$	156,079
Net cash used in investing activities		(159,027	)		(114,168	)
Net cash provided by (used in) financing activities		101,422			(37,626	)
Net change in cash and cash equivalents and restricted cash and cash equivalents		96,724			4,144

For the Six Months Ended June 30, 2020

Net cash provided by operating activities for the six months ended June 30, 2020 was $154.4 million, compared to $156.1 million for the six months ended June 30, 2019. The net change of $1.7 million was primarily due to: (i) an increase in receivables of $25.0 million in the six months ended June 30, 2020, compared to a decrease of $2.2 million in the six months ended June 30, 2019, as a result of timing of collection from our customers; offset partially by (i) a net decrease of $21.7 million in costs and estimated earnings in excess of billings, net in our Product segment in the six months ended June 30, 2020, compared to $10.5 million in the six months ended June 30, 2019, as a result of timing in billings to our customers, and (ii) an increase in accounts payable and accrued expenses of $10.0 million in the six months ended June 30, 2020, compared to a decrease of $6.2 million in the six months ended June 30, 2019, mainly due to timing of payments to our suppliers, partially offset by a withholding tax payment of approximately $8 million in the six months ended June 30, 2020 compared to $14 million in the six months ended June 30, 2019 due to a distribution from OSL.

Net cash used in investing activities for the six months ended June 30, 2020 was $159.0 million, compared to $114.2 million for the six months ended June 30, 2019. The principal factors that affected our net cash used in investing activities during the six months ended June 30, 2020 were capital expenditures of $151.3 million, primarily for our facilities under construction that support our growth plan and an investment in an unconsolidated company of $7.8 million. The principal factor that affected our net cash used in investing activities during the six months ended June 30, 2019 was capital expenditures of $114.9 million, primarily for our facilities under construction.

Net cash provided by financing activities for the six months ended June 30, 2020 was $101.4 million, compared to $37.6 million net cash used in financing activities for the six months ended June 30, 2019. The principal factors that affected the net cash provided by financing activities during the six months ended June 30, 2020 were: (i) $79.4 million of proceeds from a senior unsecured bonds series 3; (ii) $50.0 million of proceeds from a senior unsecured loan; and (iii) net proceeds of $59.5 million from our revolving credit lines with commercial banks which were withdrawn primarily to secure cash in hand in order to meet our capital needs in light of the uncertainty related to the COVID-19 pandemic, partially offset by :(i) the repayment of commercial paper debt in the amount of $46.2 million; (ii) the repayment of long-term debt in the amount of $31.8 million; (iii) a $11.3 million cash dividend payment and (iv) $3.7 million cash paid to a noncontrolling interest. The principal factors that affected our net cash used in financing activities during the six months ended June 30, 2019 were: (i) net payment of $105.9 million from our revolving credit lines with commercial banks which were used for capital expenditures, (ii) the repayment of long-term debt in the amount of $36.8 million; (iii) a $11.2 million cash dividend paid; and (iv) $7.8 million cash paid to noncontrolling interest, partially offset by: (i) $50 million of proceeds from a senior unsecured loan; and (ii) $41.5 million of proceeds from a term loan for our Olkaria 3 complex.

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Non-GAAP Measures: EBITDA and Adjusted EBITDA

We calculate EBITDA as net income before interest, taxes, depreciation and amortization. We calculate Adjusted EBITDA as net income before interest, taxes, depreciation and amortization, adjusted for (i) termination fees, (ii) impairment of long-lived assets, (iii) write-off of unsuccessful exploration activities, (iv) any mark-to-market gains or losses from accounting for derivatives, (v) merger and acquisition transaction costs, (vi) stock-based compensation, (vii) gains or losses from extinguishment of liabilities, (viii) gains or losses on sales of property, plant and equipment and (ix) other unusual or non-recurring items. EBITDA and Adjusted EBITDA are not measurements of financial performance or liquidity under accounting principles generally accepted in the U.S. (U.S. GAAP) and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or as an alternative to net earnings as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. We use EBITDA and Adjusted EBITDA as a performance metric because it is a metric used by our Board of Directors and senior management in evaluating our financial performance. However, other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do.

Net income for the three and six months ended June 30, 2020 was $25.3 million and 55.2 million, respectively, compared to $36.2 million and 64.3 million for the three and six months ended June 30, 2019, respectively.

Adjusted EBITDA for the three and six months ended June 30, 2020 was $97.9 million and $203.9 million, respectively, compared to $94.9 million and $196.6 million for the three and six months ended June 30, 2019, respectively.

The following table reconciles net income to EBITDA and Adjusted EBITDA for the three and six months period ended June 30, 2020 and 2019:

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Dollars in thousands)						(Dollars in thousands)
Net income	$	25,270		$	36,197		$	55,176		$	64,327
Adjusted for:
Interest expense, net (including amortization of deferred financing costs)		19,344			21,097			36,215			42,027
Income tax provision (benefit)		11,766			(3,529	)		29,914			10,510
Adjustment to investment in an unconsolidated company: our proportionate share in interest expense, tax and depreciation and amortization in Sarulla		3,199			2,579			5,876			5,240
Depreciation and amortization		36,812			35,751			72,100			70,617
EBITDA	$	96,391		$	92,095		$	199,281		$	192,721
Mark-to-market gains or losses from accounting for derivative		(1,482	)		(370	)		(2,043	)		(1,579	)
Stock-based compensation		2,264			2,643			4,253			5,003
Merger and acquisition transaction costs		618			500			1,158			500
Settlement expenses		89			—			1,277			—
Adjusted EBITDA		97,880			94,868			203,926			196,645

In May 2014, Sarulla closed $1,170 million in financing. As of June 30, 2020, the credit facility has an outstanding balance of $1,042.0 million. Our proportionate share in the SOL credit facility is $132.9 million.

Capital Expenditures

Our capital expenditures primarily relate to: (i) the development and construction of new power plants, (ii) the enhancement of our existing power plants; and (iii) investment in activities under our strategic plan.

The following is an overview of projects that are fully released for construction.

Heber Complex (California). We are currently in the process of repowering the Heber 1 and Heber 2 power plants. We are planning to replace steam turbine and old OEC units with new advanced technology equipment that will add a net capacity of 11 MW. Following these enhancements, we expect the capacity of the complex to reach 92 MW. Permitting, engineering and procurement are ongoing as well as manufacturing and site construction. We expect commercial operation in the second half of 2021.

CD 4 Project (California). We plan to develop a 30 MW project at the Mammoth complex on primarily BLM leases.We signed a Wholesale Distribution Access Tariff Cluster Large Generator Interconnection Agreement with Southern California Edison in December 2017. We signed a 25-year PPA with SCPPA for 16 MW that will be sold to the City of Colton in California and we recently signed two additional similar PPAs with SVCE and MBCP, each will purchase 7 MW (for a total of 14 MW) of power. Engineering and procurement are ongoing. Construction commencement is planned for the second half of 2020 pending receipt of permits. We expect commercial operation at the end of 2021.

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Wister Solar (California). We are developing a 20MW AC solar PV project on the Wister site in California. We plan to install a Solar PV system and sell the electricity under a PPA with San Diego Gas & Electric.Engineering and procurement are ongoing. Permitting has been delayed due to COVID-19 implications. We expect the project to be completed in the second half of 2021.

McGinness Hills expansion (Nevada). We are expanding the McGinness Hills complex by 8 MW by adding an Ormat energy converter. Construction commenced and equipment delivery is planned for in the second half of 2020. We expect the project to be completed in 2021, subject to approval of the lender.

Dixie Meadows (Nevada). We are developing the 12MW Dixie Meadows geothermal power plant in Churchill County, Nevada. Engineering and procurement has commenced. We are planning to sell the electricity generated under the Portfolio SCPPA PPA. Commercial operation is expected in 2022.

In addition, we are in the process of upgrading some of the equipment, such as turbines and pipelines at some of our operating power plants including Ormesa in California and Amatitlan in Guatemala.

The following is an overview of projects that are in initial stages of construction:

Carson Lake Project. We plan to develop between 10 MW to 15 MW at the Carson Lake project on Bureau of Land Management (BLM) leases located in Churchill County, Nevada. We signed a Small Generator Interconnection Agreement with NV Energy in December 2017. As of June 30, 2020, we are planning the drilling activity to begin next year.

We have budgeted approximately $414.0 million in capital expenditures for construction of new projects and enhancements to our existing power plants, of which we had invested $114.0 million as of June 30, 2020. We expect to invest approximately $120.0 million in 2020 and the remaining approximately $180.0 million thereafter.

In addition, we estimate approximately $87.0 million in additional capital expenditures in 2020 to be allocated as follows: (i) approximately $30.0 million for the exploration and development of new projects and enhancements of existing power plants that are not yet released for full construction; (ii) approximately $30.0 million for maintenance capital expenditures to our operating power plants including drilling in our Puna power plant; (iii) approximately $16.0 million for the construction and development of storage projects; and (iv) approximately $11.0 million for enhancements to our production facilities.

In the aggregate, we estimate our total capital expenditures for 2020 to be approximately $207.0 million.

Exposure to Market Risks

Based on current conditions, we believe that we have sufficient financial resources to fund our activities and execute our business plans. However, the cost of obtaining financing for our project needs may increase significantly or such financing may be difficult to obtain.

We, like other power plant operators, are exposed to electricity price volatility risk. Our exposure to such market risk is currently limited because many of our long-term PPAs (except for the 25 MW PPA for the Puna complex and the between 30 MW and 40 MW PPAs in the aggregate for the Heber 2 power plant in the Heber Complex, and the G2 power plant in the Mammoth Complex) have fixed or escalating rate provisions that limit our exposure to changes in electricity prices. Our energy storage projects sell on "merchant" and are exposed to changes in the electricity market prices.

The energy payments under the PPAs of the Heber 2 power plant in the Heber Complex and the G2 power plant in the Mammoth Complex are determined by reference to the relevant power purchaser’s Short Run Avoided Cost (“SRAC”). A decline in the price of natural gas will result in a decrease in the incremental cost that the power purchaser avoids by not generating its electrical energy needs from natural gas, or by reducing the price of purchasing its electrical energy needs from natural gas power plants, which in turn will reduce the energy payments that we may charge under the relevant PPA for these power plants. The Puna complex is currently benefiting from energy prices which are higher than the floor under the 25 MW PPA for the Puna complex.

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As of June 30, 2020, 96.5% of our consolidated long-term debt was fixed rate debt and therefore was not subject to interest rate volatility risk. As of such date, 3.5% of our long-term debt was floating rate debt, exposing us to interest rate risk in connection therewith. As of June 30, 2020, $44.5 million of our long-term debt remained subject to interest rate risk.

We currently maintain our surplus cash in short-term, interest-bearing bank deposits, money market securities and commercial paper (with a minimum investment grade rating of AA by Standard & Poor’s Ratings Services).

Our cash equivalents are subject to interest rate risk. Fixed rate securities may have their market value adversely impacted by a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. As a result of these factors, our future investment income may fall short of expectations because of changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value because of changes in interest rates.

We are also exposed to foreign currency exchange risk, in particular the fluctuation of the U.S. dollar versus the Israeli shekel and euro. Risks attributable to fluctuations in currency exchange rates can arise when we or any of our foreign subsidiaries borrow funds or incur operating or other expenses in one type of currency but receive revenues in another. In such cases, an adverse change in exchange rates can reduce such subsidiary’s ability to meet its debt service obligations, reduce the amount of cash and income we receive from such foreign subsidiary, or increase such subsidiary’s overall expenses. In Kenya, the tax asset is recorded in Kenyan Shillings ("KES") similar to the tax liability, however any change in the exchange rate in the KES versus the USD has an impact on our financial results. Risks attributable to fluctuations in foreign currency exchange rates can also arise when the currency denomination of a particular contract is not the U.S. dollar. Substantially all of our PPAs in the international markets are either U.S. dollar-denominated or linked to the U.S. dollar except for our operations on Guadeloupe, where we own and operate the Boulliante power plant which sells its power under a Euro-denominated PPA with Électricité de France S.A. Our construction contracts from time to time contemplate costs which are incurred in local currencies. The way we often mitigate such risk is to receive part of the proceeds from the contract in the currency in which the expenses are incurred. Currently, we have forward contracts in place to reduce our foreign currency exposure and expect to continue to use currency exchange and other derivative instruments to the extent we deem such instruments to be the appropriate tool for managing such exposure.

We performed a sensitivity analysis on the fair values of our long-term debt obligations, and foreign currency exchange forward contracts. The foreign currency exchange forward contracts listed below principally relate to trading activities. The sensitivity analysis involved increasing and decreasing forward rates at June 30, 2020 and December 31, 2019 by a hypothetical 10% and calculating the resulting change in the fair values.

At this time, the development of our strategic plan has not exposed us to any additional market risk. However, as the implementation of the plan progresses, we may be exposed to additional or different market risks.

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The results of the sensitivity analysis calculations as of June 30, 2020 and December 31, 2019 are presented below:

	Assuming a 10% Increase in Rates						Assuming a 10% Decrease in Rates
Risk	June 30, 2020			December 31, 2019			June 30, 2020		December 31, 2019		Change in the Fair Value of
	(Dollars in thousands)
Foreign Currency		(5.254	)		(4,198	)		6,379		5,131	Foreign currency forward contracts
Interest Rate		(3,223	)		(4,574	)		3,293		4,723	OFC 2 Senior Secured Notes
Interest Rate		(3,450	)		(4,647	)		3,591		4,812	OPIC Loan
Interest Rate		(1,507	)		(1,797	)		1,519		1,822	Senior Unsecured Bonds
Interest Rate		(664	)		(905	)		680		934	DEG 2 Loan
Interest Rate		(1,335	)		(1,835	)		1,370		1,906	DAC 1 Senior Secured Notes
Interest Rate		(413	)		(516	)		426		534	Amatitlan Loan
Interest Rate.		(2,892	)		(3,272	)		2,942		3,363	Migdal Loan, the Additional Migdal Loan and the Second Addendum Migdal Loan
Interest Rate		(967	)		(1,141	)		1,010		1,207	San Emidio Loan
Interest Rate		(450	)		(776	)		457		797	DOE Loan
Interest Rate		(188	)		(281	)		191		286	Idaho Holdings Loan
Interest Rate		(2,308	)		(2,978	)		2,377		3,099	Platanares OPIC Loan
Interest Rate		(514	)		(728	)		524		749	DEG 3 Loan
Interest Rate		(215	)		(342	)		218		350	Plumstriker Loan
Interest Rate		(8	)		(295	)		8		298	Commercial paper
Interest Rate		(130	)		(201	)		115		204	Other long-term loans

In July 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR (London Interbank Offered Rate), announced that it intends to phase out LIBOR by the end of 2021. It is unclear whether or not LIBOR will cease to exist at that time and/or whether new methods of calculating LIBOR will be established such that it will continue to exist after 2021. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new SOFR (Secured Overnight Financing Rate) index calculated by short-term repurchase agreements, backed by Treasury securities.

The Company has evaluated the impact of the transition from LIBOR, and currently believes that the transition will not have a material impact on its consolidated financial statements.

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Effect of Inflation

We expect that inflation will not be a significant risk in the near term, given the current global economic conditions, however, that could change in the future. To address the possibility of rising inflation, some of our contracts include certain provisions that mitigate inflation risk.

In connection with the Electricity segment, none of our U.S. PPAs, including the SCPPA Portfolio PPA, are directly linked to the Consumer Price Index ("CPI"). Inflation may directly impact an expense we incur for the operation of our projects, thereby increasing our overall operating costs and reducing our profit and gross margin. The negative impact of inflation would be partially offset by price adjustments built into some of our PPAs that could be triggered upon such occurrences. The energy payments pursuant to our PPAs for some of our power plants such as the Brady power plant, the Steamboat 2 and 3 power plants and the McGinness Complex increase every year through the end of the relevant terms of such agreements, although such increases are not directly linked to the CPI or any other inflationary index. Lease payments are generally fixed, while royalty payments are generally calculated as a percentage of revenues and therefore are not significantly impacted by inflation. In our Product segment, inflation may directly impact fixed and variable costs incurred in the construction of our power plants, thereby increasing our operating costs in the Product segment. We are more likely to be able to offset all or part of this inflationary impact through our project pricing. With respect to power plants that we build for our own electricity production, inflationary pricing may impact our operating costs which may be partially offset in the pricing of the new long-term PPAs that we negotiate.

Concentration of Credit Risk

Our credit risk is currently concentrated with the following major customers: Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy), SCPPA and Kenya Power and Lighting Company (KPLC). If any of these electric utilities fail to make payments under its PPAs with us, such failure would have a material adverse impact on our financial condition. Also, by implementing our multi-year strategic plan we may be exposed, by expanding our customer base, to different credit profile customers than our current customers.

Sierra Pacific Power Company and Nevada Power Company (subsidiaries of NV Energy, Inc.) accounted for 17.2% and 16.5% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 18.3% and 17.4% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

Southern California Public Power Authority (“SCPPA”) accounted for 20.0% and 17.2% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 19.5% and 18.3% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

Kenya Power and Lighting Co. Ltd. ("KPLC") accounted for 16.0% and 16.6% of the Company's total revenues for the three months ended June 30, 2020 and 2019, respectively, and 15.7% and 16.0% of the Company’s total revenues for the six months ended June 30, 2020 and 2019, respectively.

We have historically been able to collect on substantially all of our receivable balances. As of June 30, 2020, the amount overdue from KPLC was $54.8 million of which $8.8 million was paid in July 2020. These amounts represent an average of 81 days overdue. We believe we will be able to collect all past due amounts in Kenya. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, we hold a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as where caused by government actions/political events). In Honduras, we have been able to collect current charges from Empresa Nacional de Energía Eléctrica (“ENEE”) starting in May 2019. However, due to continuing restrictive measures related to the COVID-19 pandemic in Honduras, the Company may experience delays in collection. As of June 30, 2020, the total amount overdue from ENEE was $24.0 million of which $20.1 million relates to the period from October 2018 to April 2019 and the $4.0 million relates to February and March invoices that are overdue. In July 2020, we received payments of $0.7 million on account of such invoices. In view of the ongoing Honduran government support undertaking, the Company believes it will be able to collect past due amounts in Honduras.

Government Grants and Tax Benefits

A comprehensive discussion on government grants and tax benefits is included in our 2019 Annual Report. There have been no material changes to this section in the six months ended June 30, 2020.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information appearing under the headings “Exposure to Market Risks” and “Concentration of Credit Risk” in Part I, Item 2 of this quarterly report on Form 10-Q is incorporated by reference herein.

ITEM 4. CONTROLS AND PROCEDURES

a. Evaluation of disclosure controls and procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, have conducted the evaluation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) required by Rules 13a-15(b) or 15d-15(b) under the Exchange Act, as amended. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of June 30, 2020 as a result of a material weakness in our internal control over financial reporting that existed at December 31, 2017 and has not been remediated by the end of the period covered by this quarterly report on Form 10-Q.

Previously Identified Material Weakness in Internal Control Over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

We previously disclosed in our 2019 Annual Report the following material weakness which still existed as of June 30, 2020. In connection with the change in our repatriation strategy and the related release of the U.S. income tax valuation allowance in the second quarter of 2017, we did not perform an effective risk assessment related to our internal controls over the accounting for income taxes. As a result, we identified a deficiency in the design of our internal control over financial reporting related to our accounting for income taxes, which resulted in the restatements of the Company’s unaudited condensed consolidated financial statements for the three and six months ended June 30, 2017, the three and nine months ended September 30, 2017, and the restatement of the Company’s consolidated financial statements for the year ended December 31, 2017. Additionally, this control deficiency could result in a misstatement of the aforementioned balances and disclosures that would result in a material misstatement to the interim or annual consolidated financial statements that would not be prevented or detected. Our management has concluded that this deficiency constitutes a material weakness in our internal control over financial reporting.

Remediation Plan for Material Weakness

Subsequent to the evaluation made in connection with filing our Amended Annual Report on Form 10-K for the year ended December 31, 2017, our management, with the oversight of the Audit Committee of the Board of Directors, has continued the process of remediating the material weakness. In connection with the remediation process, we have:

•

performed an enhanced risk assessment related to our internal controls over the accounting for income taxes;

•

recruited additional tax personnel throughout the year, including a VP of Tax in January 2019 and a Director of Tax in September 2019;

•

engaged an external tax and accounting firm to assist in the preparation of our annual and quarterly income tax provision;

•

implemented specific control procedures for the review, analysis and reporting of our income tax accounts, including control procedures of projections that support the deferred tax assets and liabilities;

•

strengthened our income tax controls with improved documentation, communication and oversight.

We have made substantial progress in accordance with developing and implementing our remediation plan and we are improving our internal processes. The remaining tasks of our remediation plan includes the hiring of additional personnel, implementing automation of the key elements of the tax provision and modifying controls as applicable in respect of such tasks in order to reduce the risk of material misstatement. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We are committed to continuing to improve our internal control processes and will continue to review, optimize and enhance our financial reporting controls and procedures accordingly. However, there can be no assurance that this will occur within 2020.

b. Changes in internal control over financial reporting

There were no changes in our internal controls over financial reporting in the second quarter of 2020 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information required with respect to this item can be found under “Commitments and Contingencies” in Note 10 of notes to the unaudited condensed consolidated financial statements contained in this quarterly report and is incorporated by reference into this Item 1.

ITEM 1A. RISK FACTORS

A comprehensive discussion of our other risk factors is included in the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2019 which was filed with the SEC on March 1, 2019. The risks described in our Form 10-K and herein are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The global spread of COVID-19 pandemic may have an adverse impact and could adversely affect our financial results.

The COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide. Governments around the world have ordered companies to limit or suspend non-essential operations and imposed operational and travel restrictions resulting in a decline in global economic activity and an increase in market volatility. We have implemented significant measures both to comply with government requirements and to preserve the health and safety of our employees. These measures include working remotely where possible and operating separate shifts in our power plants, manufacturing facilities and other locations while trying to continue operations as close to full capacity in all locations.

While we did not experience any material impact on our results of operations during the first quarter of 2020, we have started to experience impacts in the second quarter of 2020 which varied among our business segments:

•

In our Electricity segment almost all of our revenues in the six months ended June 30, 2020 was generated under long term contracts and the majority have a fixed energy rate. As a result, despite logistical and other challenges, we experienced limited impact of COVID-19 on our electricity segment. Nevertheless, on April 17, 2020, we received from Kenya Power & Lighting Co. Ltd. ("KPLC") a notice declaring a force majeure event in Kenya due to the impact of COVID-19 and purporting to reduce the Olkaria complex’s contracted capacity from 150 MW to 133.9 MW. As a result of the force majeure provisions in the Power Purchase Agreement related to this facility, the notice had an immaterial impact on our expected revenue, as agreed also by KPLC. In addition, we experienced a higher rate of curtailments by KPLC in the Olkaria complex. The impact of the curtailments is limited as the structure of the PPA secures the vast majority of our revenues with fixed capacity payments unrelated to the electricity actually consumed (in 2019 and six months ended June 30, 2020, capacity payments represented 70% and 75% of our revenues, respectively). On April 30, 2020, we also received from ENEE a notice declaring a force majeure event in Honduras due to the impact of COVID-19. We have not identified any impact on our consolidated financial statements as a result of this notice. In addition, our future growth in the electricity segment would be adversely impacted by a lack of funding for projects and the implications of global and local restrictions on our ability to procure raw material and ship our products.

•

In our Product segment, the economic downturn has adversely impacted customers’ purchasing decisions and travel restrictions have adversely impacted our sales and marketing efforts. We experienced a decrease in our backlog that we believe was due to the impact of COVID-19. We may face similar challenges in future periods in the event of a prolonged shutdown.

•

In addition, we experience delays in the permitting for new projects in all segments that may also cause a delay in those projects.

Table of Contents

The extent to which COVID-19 ultimately impacts our business, operations, financial results and financial condition will depend on numerous evolving factors which are currently uncertain and cannot be predicted, including:

•

the duration and scope of the pandemic;

•

governmental, business and individuals’ actions taken in response;

•

the effect on our customers and customers’ demand for our services and products;

•

the effect on our suppliers and disruptions to the global supply chain;

•

our ability to sell and provide our services and products, including as a result of travel restrictions and people working from home;

•

disruptions to our operations resulting from the illness of any of our employees;

•

our ability to oversees remote operation due to travel restrictions;

•

restrictions or disruptions to transportation, including reduced availability of ground or air transport; and

•

decrease in electricity demand; and the ability of our customers to pay for our services and products.

In addition, the impact of COVID-19 on macroeconomic conditions may impact the proper functioning of financial and capital markets, foreign currency exchange rates, commodity and interest rates. Any of the events described above could amplify the other risks and uncertainties described in our Annual Report on Form 10-K for the year ended December 31, 2019 and could materially adversely affect our business, financial condition, results of operations and/or stock price.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

Table of Contents

ITEM 6. EXHIBITS

We hereby file, as exhibits to this quarterly report, those exhibits listed on the Exhibit Index below.

EXHIBIT INDEX

Exhibit No.	Document

10.2*	Second Addendum to Loan Agreement dated April 13, 2020 between and among Ormat Technologies, Inc. and Migdal Insurance Company Ltd., Migdal Makefet Pension and Provident Funds Ltd. And Yozma Pension Fund of Self-Employed Ltd.

10.4.1*+	Form of Stock Appreciation Right Agreement and Terms and Conditions under the Company’s 2018 Incentive Compensation Plan for stock appreciation rights awarded to NEO’s.

10.4.2*+	Form of Restricted Stock Unit Agreement and Terms and Conditions under the Company’s 2018 Incentive Compensation Plan for restricted stock units awarded to NEO’s

10.4.3*+	Form of Performance Stock Unit Grant Notice and Terms and Conditions under the Company’s 2018 Incentive Compensation Plan for restricted stock units awarded to NEO’s

31.1*	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2*	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, furnished herewith.

101.SC*	Inline XBRL Taxonomy Extension Schema Document.
101.CA*	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DE*	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LA*	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PR*	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101)

*	Filed herewith
+	This document has been identified as a management contract or compensatory plan or arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ORMAT TECHNOLOGIES, INC.


	By:	/s/ ASSAF GINZBURG
	Name:	Assaf Ginzburg
	Title:	Chief Financial Officer

Date: August 6, 2020

Exhibit 10.2

SECOND ADDENDUM TO

LOAN AGREEMENT DATED MARCH 22, 2018

FOR ORMAT TECHNOLOGIES, INC. AS BORROWER

WITH MIGDAL INSURANCE COMPANY, LTD.,

MIGDAL MAKEFET PENSION AND PROVIDENT FUNDS LTD. AND YOZMA PENSION FUND OF SELF EMPLOYED LTD.

This SECOND ADDENDUM TO THE LOAN AGREEMENT DATED MARCH 22, 2018 FOR ORMAT TECHNOLOGIES, INC. AS BORROWER WITH MIGDAL INSURANCE COMPANY, LTD., MIGDAL MAKEFET PENSION AND PROVIDENT FUNDS LTD. AND YOZMA PENSION FUND OF SELF EMPLOYED LTD. (this “Second Addendum”) is made and entered on April 13, 2020, by and between Ormat Technologies, Inc. ("Borrower”) and Migdal Insurance Company, Ltd., Migdal Makefet Pension and Provident Funds Ltd. ("Lenders"). Each of the Borrower and Lenders may be referred to individually as a “Party” and together as the “Parties”.

WHEREAS, Ormat Technologies, Inc. and Migdal Insurance Company, Ltd., Migdal Makefet Pension and Provident Funds Ltd. And Yozma Pension Fund of Self Employed Ltd.executed the Loan Agreement dated March 22, 2018, pursuant to which Lenders and Yozma Pension Fund of Self Employed Ltd. provided Borrower with a loan in an amount of US $100,000,000 (the “Agreement or First Agreement” and the "First Loan", respectively);

WHEREAS, Ormat Technologies, Inc. and Migdal Insurance Company, Ltd., Migdal Makefet Pension and Provident Funds Ltd. And Yozma Pension Fund of Self Employed Ltd.executed the First Addendum to the Loan Agreement dated March 25, 2019, pursuant to which Lenders and Yozma Pension Fund of Self Employed Ltd. provided Borrower with a an additional loan in an amount of US $50,000,000 (the “Second Agreement” and the "Second Loan", respectively);

WHEREAS, the outstanding principal amount under the First Loan Agreement and the Second Loan Agreement, as at the date hereof is US $$150,000,000 plus accrued interest.

WHEREAS, Borrower requested Lenders to provide to Borrower an additional loan in an amount of US $50,000,000 (the “Additional Loan”) in addition to the First Loan and the Second Loan;

WHEREAS, Lenders agreed to make available to the Borrower the Additional Loan under the terms and conditions of the First Agreement and subject to the terms and conditions set forth herein, and

WHEREAS, the Parties wish to enter into this Second Addendum to the Agreement, in order to set forth the terms and conditions of the Additional Loan, without changing or amending the terms of the Agreement except as otherwise provided herein.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein, and subject to the terms and conditions set forth herein, and with the intent to be bound, the Parties hereto agree as follows:

1.	Definitions and Interpretation

1.1

Capitalized terms not defined herein shall have the meaning ascribed to such terms in the Agreement.

1.2

In this Second Addendum:

Finance Document means:

(a)

the Agreement;

(b)

a Transfer Certificate under the Agreement or under the First Addendum or under this Second Addendum;

(c)

the Utilization Request under the Agreement or under the First Addendum or under this Second Addendum

(d)

the First Addendum;

(e)

this Second Addendum, and

(f)

any other document designated as such by the Lenders and the Borrower.

Interest Payment Date means (i) September 15, 2020, and (ii) the 15th day of each March and September thereafter until the Last Repayment Date, and all as set forth in Schedule 2 (Repayment Schedule).

Loan Amount means:

(a)

in relation to an Original Lender, the amount set opposite its name under the heading "Loan Amount" in Schedule 1 (The Parties) and any other Loan Amount transferred to it under this Second Addendum; and

(b)

in relation to any other Lender, the Loan Amount transferred to it under this Addendum,

to the extent not cancelled, reduced or transferred by it under the terms of this Second Addendum.

Original Financial Statements means the Borrower's annual audited consolidated financial statements for the year 2019.

Utilisation Request means a notice substantially in the form set out in Schedule 3 (Utilisation Request).

2.	The Additional Loan

2.1

Subject to the terms of this Second Addendum, the Lenders shall make to the Borrower an Additional Loan in an aggregate amount of US $50,000,000 (fifty million US dollars).

2.2

The Lenders will only be obliged to make the Additional Loan if, on the date of the Utilization Request and on the proposed Utilization Date:

(a)

the Lenders shall have received:

(i)

all of the documents and other evidence listed in Schedule 4 (Conditions Precedent) in form and substance satisfactory to the Lenders; and

(ii)

a duly completed Utilization Request, in accordance with the provisions of Clause ☒3.1 (Delivery of a Utilisation Request) of the Agreement and Schedule 3 hereto.

(b)

no Default under the First Loan, the Second Loan or Additional Loan is continuing or would result from the Additional Loan; and

(c)

all representations made by the Borrower under the Finance Documents are true and complete.

(d)

The Borrower shall have complied with all of its covenants under the Agreement.

(e)

There shall be no legal impediment pursuant to any applicable law or regulation binding upon Lenders with respect to the grant of Additional Loan.

3.	Utilisation of the Additional loan

3.1

Delivery of a Utilisation Request

The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

(f)

the Utilisation Request is delivered to Lenders on the date of the execution of this Second Addendum.

(g)

the amount of the requested Additional Loan is the total amount of the Additional Loan (US $50,000,000).

(h)

The currency specified in the Utilisation Request is US dollars.

(i)

The proposed Utilisation Date specified in the Utilisation Request will be April 21, 2020

3.2

Advancing the Loan

Subject to the terms and conditions of this Agreement, on the Utilisation Date, the Lenders shall advance the Loan to account number 78556092 in branch number 10 (Tel Aviv main branch) of Israel Discount Bank Ltd, in the name of the Borrower (Swift code: IDBLILIT; IBAN (USD): IL39-0110-1000-0007-8556-092).

4.	Repayment of the Additional loan

4.1

The Borrower shall repay the principal of the Additional Loan in installments, as follows:

(a)

a principal amount of US $31,500,000 (thirty one million five hundred thousand US dollars) of the Additional Loan shall be repaid in 15 (fifteen) equal semi-annual installments, every March 15 and September 15, with the first payment being on March 15, 2021 and the last repayment date being September 15, 2028.

(b)

a principal amount of US $18,500,000 (eighteen million five hundred thousand US dollars) of the Additional Loan shall be repaid in one bullet payment on March 15, 2029 (the “Last Repayment Date”)

and all as set forth in Schedule 2 (Repayment Schedule).

4.2

Payments to the Lenders

All payments to be made by the Borrower under the Finance Documents shall be made in US dollars, directly to the accounts specified in the table appearing in Part III of Schedule 1 (The Parties), pro rata between such accounts, in accordance with the respective rate specified with respect to each account in such table.

5.	Interest

5.1

Interest Rate

The rate of interest of the Additional Loan is a fixed rate of 5.44% per annum.

5.2

Payment of interest

The Borrower shall pay the accrued interest on the Loan on each Interest Payment Date.

6.	GENERAL

6.1

The Borrower hereby confirms and covenants that no change has occurred to the representations and warranties given in the Agreement, other than changes occurring in the ordinary course of business and which have no adverse material affect on the Borrower, its business activity, or Lenders’ rights under the Agreement or this Second Addendum or which were disclosed by the Borrower through its public filings.

6.2

The Parties further agree that, except as specifically modified by the provisions of this Second Addendum, the provisions of the Agreement shall apply and govern this Second Addendum, mutatis mutandis.

6.3

This Second Addendum may be executed in separate counterparts, each of which shall be deemed an original, but together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the Parties have entered into this Second Amendment on April 13, 2020.

	Ormat Technologies, Inc.		Migdal Insurance Company



	By:/s/Isaac Angel /s/Doron Blachar		By: /s/Assaf Shaham /s/Yossi Ben Baruch
	Name: Isaac Angel/Doron Blachar		Name: Assaf Shaham/Yossi Ben Baruch
	Title: CEO/ CFO		Title: CIO/ CFO



	Migdal Makefet Pension and
	Provident Funds Ltd.

	By: /s/Assaf Shaham /s/Yossi Ben Baruch
	Name: Assaf Shaham/Yossi Ben Baruch


	Title: CEO/ CFO

SCHEDULE 1

THE PARTIES

Part I
The Borrower

Ormat Technologies, Inc

As Borrower

Registration number (or equivalent, if any)
Jurisdiction of Incorporation - Delaware, USA

Part II

The Lenders

Name of Original Lender		Loan Amount
Migdal Insurance Company Ltd.		USD 29,950,088.21 (twenty nine million nine hundred and fifty thousand and eighty eight dollars and twenty-one cents
Migdal Makefet Pension and Provident Funds Ltd.		USD 20,049,911.78 (twenty million forty - nine thousand and nine hundred and elven dollars and seventy eight cents)

Part III

Payments Accounts

Account Details	Respective rate of payment per account

Account number 669509 in branch number 600 of Bank Hapoalim, Israel, in the name of Migdal Insurance Makefet Yozma – Amitim	91.558909%
Account number 669487 in branch number 600 of Bank Hapoalim, Israel, in the name of Migdal Insurance Makefet Yozma - Nostro	8.441091%

schedule 2

REPAYMENT SCHEDULE

Date	Interest payment	Principal repayment	Balance of principal


15/09/2020	1.095	0.00	50
15/03/2021	1.349	0.00	50
15/09/2021	1.371	2.10	48
15/03/2022	1.292	2.10	46
15/09/2022	1.256	2.10	44
15/03/2023	1.179	2.10	42
15/09/2023	1.141	2.10	40
15/03/2024	1.071	2.10	38
15/09/2024	1.026	2.10	36
15/03/2025	0.952	2.10	34
15/09/2025	0.910	2.10	32
15/03/2026	0.839	2.10	30
15/09/2026	0.795	2.10	28
15/03/2027	0.726	2.10	26
15/09/2027	0.680	2.10	24
15/03/2028	0.616	2.10	22
15/09/2028	0.565	2.10	20
15/03/2029	0.499	18.5	18.5

SCHEDULE 3

Utilisation Request

From:

Ormat Technologies, Inc.

To:	All Lenders

Dated:

Dear Sirs

Ormat Technologies, Inc. - $50,000,000 loan agreement
dated April 13, 2020 (the "Second Addendum")

1.	We refer to the Second Addendum. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request or the Second Addendum.

2.	We wish to borrow the Additional Loan on the following terms:

Proposed Utilisation Date:	April 21, 2020 (or, if that is not a Business Day, the next Business Day)

Currency of Loan:	US dollars

Amount:	US$50,000,000 (fifty million US dollars)

Interest Period:	Shall be in accordance with the provisions of Clause 9.1 of the Loan Agreement dated March 22, 2018, pursuant to which Lenders provided Borrower with a loan in an amount of US $100,000,000 (the "Agreement").

3.	We confirm that each condition specified in Clause 2.2 of the Second Addendum is satisfied on the date of this Utilisation Request.

4.	The proceeds of this Additional Loan should be credited to account number 78556092 in branch number 10 (Tel Aviv main branch) of Israel Discount Bank Ltd, in the name of the Borrower (Swift code: IDBLILIT; IBAN (USD): IL39-0110-1000-0007-8556-092).

Attached hereto is a signed bank confirmation of the account details.

5.	We confirm that no Default is continuing or might reasonably be expected to result from the making of the Additional Loan.

6.	This Utilisation Request is irrevocable.

Yours faithfully

...............................................

authorised signatory for

Ormat Technologies, Inc.

sCHEDULE 4

Conditions Precedent to Utilisation of the ADDITIONAL loAn

1.	Corporate Documentation

A certificate signed by a director or officer of the Borrower:

(a)

attaching a copy, certified as correct, complete and in full force and effect as at the Utilization Date, of each of the following documents:

(i)

its constitutional documents including any amendments or confirmation that the constitutional documents delivered to the Lenders are complete and up to date.

(ii)

resolution of (x) the board of directors or equivalent body of the Borrower and (y) to the extent required, the shareholders or equivalent body of the Borrower:

(A)

approving the terms of, and the transactions contemplated by, the Finance Documents and resolving that it execute, deliver and perform the Finance Documents.

(B)

authorizing a person or persons to execute the Finance Documents;

(C)

authorizing a specified person or persons, on its behalf, to sign and/or deliver all documents and notices (including the Utilization Request) to be signed and/or delivered by it under or in connection with the Finance Documents

(b)

including a copy of the passport of each person authorized by the resolution referred to in paragraph (a) above to execute the Finance Documents;

(c)

including a specimen of the signature of each person authorized by the resolution referred to in paragraph (a) above.

(d)

confirming that:

(i)

each document delivered to the Lenders in accordance with this Schedule 4 (Conditions Precedents) is correct, complete and in full force and effect as at the Utilization Date.

(ii)

no Default is continuing or might reasonably be expected to result from the making of the Additional Loan or the entry into, the performance of, or any transaction contemplated by, any Finance Document.

(iii)

all representations made by the Borrower under the Finance Documents are true.

(e)

Confirming that all conditions precedent to the utilization of the Loan as set forth in clause 2.2 of the Second Addendum have been fulfilled.

2.	Transaction Documents

At least one original copy of each Finance Document executed by the parties thereto.

3.	Legal Opinions

The following legal opinions, each addressed to the Original Lenders and capable of being relied upon by any person who become a Lender under the Agreement:

(a)

A legal opinion of Goldfarb Selgiman & Co., legal advisers to the Borrower as to the laws of the state of Israel, as to, inter alia, the validity and enforceability of the Finance Documents.

(b)

A legal opinion of Norton Rose Fulbright, legal advisers to the Borrower, as to the laws of the United States and the State of Delaware, as to, inter alia, the capacity and authority of the Borrower to execute the Finance Documents, the choice of law and venue apply to the Finance Documents.

4.	Other Documents and Evidence

(a)

The Original Financial Statements.

(b)

A copy of any other Authorization or other document, opinion or assurance which the Lenders consider to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.

Exhibit 10.4.1

FORM OF FREESTANDING STOCK APPRECIATION RIGHT AGREEMENT

Date:

Company: Ormat Technologies, Inc.	Date(s) First Exercisable:
Date of Grant:	Number: 50%-
No. of Shares: x,xxx	Number: 25%-
Grant Price per Share:	Number: 25%-

Type: Capital Gain Award	Last Exercise date:

Mr. [Full Name],

Dear [First Name],

We are pleased to inform you that, as an eligible employee of Ormat Technologies, Inc. (herein called the “Company”) or one of its subsidiaries, you have been granted a stock appreciation right (herein called a “right”) under the Company’s 2018 Incentive Compensation Plan (as amended and restated) and the Freestanding Stock Appreciation Right Terms and Conditions (herein called the “Plan” and the “Terms and Conditions”).

By your signature, you agree that the right is granted under and governed by the Plan and the Terms and Conditions, and acknowledge receipt of these documents, as well as the Prospectus for the Plan.

As set forth in Section 1 of the Terms and Conditions, a signed copy of this agreement must be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel before 5:00 P.M. Eastern time on the 3rd business day after the date of grant noted above. If the 3rd business day is a holiday in the United States or in Israel, such signed copy of this agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. Failure to return a signed copy of this agreement will deem the grant of the rights null and void.

This agreement and the documents that accompany to it constitute the entire agreement between you and the Company with respect to the rights granted hereunder and supersede in their entirety all prior undertakings and agreements of the Company and yourself, both written and oral, with respect to the rights granted hereunder (including the shares underlying it).

Furthermore, by your signature you hereby approve and agree to all the aforesaid in this agreement and the trust agreement signed with the Trustee (as defined in Annex A) and you declare that you are familiar with the provisions of Section 102 and the Capital Gains route. You hereby undertake not to sell or transfer the Shares underlying the rights prior to the lapse of the restrictions period, unless you pay all taxes, which may arise in connection with such sale and/or transfer.

[Signature Page Follows]

Page 2/13

Ormat Technologies, Inc. By: Name: Isaac Angel Title: CEO Date:	PARTICIPANT ______________________ Name: Full Name Date: ______________

Page 3/13

FREESTANDING STOCK APPRECIATION RIGHT
TERMS AND CONDITIONS

As a participant in the Ormat Technologies, Inc. 2018 Incentive Compensation Plan (as amended and restated, the “Plan”), you have been granted a stock appreciation right (herein called a “right” or “SAR”) under the Plan. The right gives you the opportunity to receive at the time of exercise of the right shares of Common Stock of the Company equal to the amount by which the market value of all shares in respect of which the right is exercised exceeds the grant price set forth in the Freestanding Stock Appreciation Right Agreement (herein called the letter agreement) multiplied by the number of shares in respect of which the right is exercised, subject to your acceptance of the right as provided in Section 1 below and the other terms and conditions described below.

The date of the grant of the right (herein called the Grant Date) and the date the right expires are set forth in the letter agreement.

Note that all capitalized terms in the letter agreement and these Terms and Conditions are defined in the Plan, except as indicated in such agreement and herein. All terms of the Plan are hereby incorporated into these Terms and Conditions.

Acceptance of Right: The right cannot be exercised unless you sign your name in the space provided on the enclosed copies of the letter agreement and cause one signed copy to be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel (or to such other person and place as the Company may specify in writing), before 5:00 P.M. Eastern Time on the 3rd day after the Grant Date. If the 3rd day is a holiday in the United States or in Israel, such signed copy of the letter agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. If the Corporate Secretary does not receive your properly executed copy of the letter agreement before such time, then, anything in the letter agreement and these Terms and Conditions to the contrary notwithstanding, the right will terminate immediately. (Your signing and delivering a copy of the letter agreement will evidence your acceptance of the right upon these Terms and Conditions.)

Exercise:

(a)

Subject to the provisions of this Section 2 and of Section 4 of these terms and conditions, the SARs shall become vested, and exercisable in accordance with the following vesting schedule (each, a “Vesting Date”):

(i) 50% - shall vest on the second anniversary of the Grant Date

(ii) 25% - shall vest on the third anniversary of the Grant Date

(iii) 25% - shall vest on the fourth anniversary of the Grant Date

Page 4/13

(b)

The right shall lapse on the sixth anniversary of the Grant Date. No fractional shares shall be delivered and fractional shares shall be disregarded.

(c)

The SARs shall not become vested unless you shall have remained continuously in the employ or service of the Company or of one or more of its Subsidiaries on the applicable Vesting Date, except as provided in Section 5, 6 and 7. Any SARs that are not vested will terminate on the date of your Separation from Service.

3.	Transferability of Right: The right shall not be transferable by you otherwise than (i) by will or (ii) by the laws of descent and distribution. Any transferred right shall continue to be subject to these Terms and Conditions.

Death or Retirement: Section 2 to the contrary notwithstanding, if you incur a Separation from Service because you die or because of Retirement, the right will only be exercisable to the extent it was exercisable under Section 2(a) on the date of your death or on the date of your Retirement. Notwithstanding Section 2, in the event of your Separation from Service because you die or because of Retirement, your personal representative or you, respectively, may exercise the vested and exercisable portion of the right hereby granted for 1 year following the Separation from Service (but not later than 6 years from the Grant Date). Retirement means a separation from service upon attainment of age 65 or, in those countries in which the law determines retirement age, such applicable age.

5.	Other Separation from Employment:

(a)

If you incur a Separation from Service for any reason other than death or Retirement, or as provided in Section 16 (o) of the Plan, the exercisable portion of the right hereby granted will be exercisable for thirty days following your Separation from Service; provided that in no event will the right be exercisable after the expiration of 6 years from the Grant Date.

(b)

For the purposes of the letter agreement, your employment by a Subsidiary of the Company shall be considered terminated on the date that the company by which you are employed is no longer a Subsidiary of the Company.

6.	Listing Requirements: The Company shall not be obligated to deliver any certificates representing shares until all applicable requirements imposed by federal and state securities laws and by any stock exchanges upon which the shares may be listed have been fully met.

Transfer of Employment: Leave of Absence: A transfer of your employment from the Company to a Subsidiary or vice versa, or from one Subsidiary to another, without an intervening period, shall not be deemed a Separation from Service. If you are granted an authorized leave of absence, you shall be deemed to have remained in the employ of the Company or a Subsidiary during such leave of absence.

Page 5/13

8.	Adjustments in Right:

(a)

The existence of the letter agreement and the right shall not affect or restrict in any way the right or power of the Board of Directors or the stockholders of the Company to make or authorize any reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the shares or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business.

(b)

In the event of any change in or affecting the outstanding shares by reason of a stock dividend or split, merger or consolidation (whether or not the Company is the surviving corporation), recapitalization, spin-off, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, the Board of Directors shall make such amendments to the Plan, the letter agreement, these Terms and Conditions and the right and make such adjustments and take actions thereunder as it deems appropriate, in its sole discretion, under the circumstances. Such amendments, adjustments and actions may include, but are not limited to, (i) changes in the number and kind of shares set forth in the letter agreement, (ii) changes in the grant price per share, and (iii) accelerating the vesting of the right. The determination by the Board as to the terms of any of the foregoing adjustments shall be conclusive and binding.

Stockholder Rights: Neither you nor any other person shall have any rights of a stockholder as to shares until, after proper exercise of the right, such shares shall have been recorded by the Company’s registrar, American Stock Transfer and Trust Company (herein called “AST”), as having been issued or transferred, as the case may be.

10.

Notice of Exercise: Subject to these Terms and Conditions, the right may be exercised by a completed notice of exercise that: (i) is delivered to the Company's incentive compensation agent, ESOP Excellence Ltd., Aviv Tower, 7 Jabotinsky St., Ramat Gan, 52520 Israel (or to such other person and place as the Company may specify in writing); and (ii) states the number of shares of Common Stock as to which the right is being exercised. The notice of exercise may be delivered by facsimile transmission or electronic mail or may be submitted online via the ESOP Excellence website. Any notice of exercise delivered as required by this Section 10 will be effective only in accordance with the provisions of and to the extent set forth in the notice of exercise. If a properly executed notice of exercise is not received by ESOP Excellence (or other person designated by the Company) by 5:00 P.M. Eastern Time on the applicable expiration date specified in the letter agreement, the notice will be deemed null and void and of no effect. If notice of exercise of the right is given by a person other than you, the Company may require as a condition to exercising the right that appropriate proof of the right of such person to exercise the right be submitted to the Company.

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11.	Delivery of Shares:

(a)

Certificates for any shares issuable upon exercise will be issued and delivered as soon as practicable, subject to Section 6 of these Terms and Conditions.

(b)

If a Registration Statement on Form S-8 is in effect with respect to the right, you can arrange with your stockbroker to have the broker exercise your right on your behalf and have the shares withdrawn from AST electronically by DWAC for deposit in your brokerage account.

12.	Tax Matters:

(a)

Before exercising the right, you should consult your tax advisor about tax consequences.

(b)

Tax Withholding for U.S. Employees: If and to the extent Federal income tax withholding (and state and local income tax withholding, if applicable) may be required by the Company in respect of taxes on income you realize upon or after exercise of any portion of the right, or upon disposition of the shares of Common Stock acquired by the right, the Company may withhold such required amounts from your future paychecks or may require that you deliver to the Company the amounts to be withheld. You may also pay the minimum required Federal income tax withholding (and state and local income tax withholding, if applicable) by electing either to have the Company withhold a portion of the shares of Common Stock otherwise issuable upon exercise of the right, or to deliver other shares of Common Stock you own, in either case having a Fair Market Value (on the date that the withholding amount is to be determined) of the minimum amount required to be withheld, provided that the election will be irrevocable and will be subject to such rules as the Committee may adopt. You may also arrange to have any tax (or taxes) paid directly to the Company on your behalf from the proceeds of the sale of Common Stock to the extent provided in the notice of exercise referred to in Section 10 of these Terms and Conditions.

(c)

Tax Withholding For Israeli Employees - The provisions specified in Annex A attached hereto shall apply only to Eligible Individuals who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the applicable payment of tax.

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13.

Employment: Nothing contained herein shall confer any right to continue in the employ or other service of the Company or a Subsidiary or limit in any way the right of the Company or a Subsidiary to change your compensation or other benefits or to terminate your employment or other service with or without cause.

14.

Short-Swing Trading: A director or an executive officer of the Company or one of its Subsidiaries who exercises a right or whose right is cashed out must report the disposition of the right on a Form 4 Statement of Changes in Beneficial Ownership filed within two business days of such reportable event pursuant to section 16(a) of the Securities Exchange act of 1934, as amended. The Corporate Secretary of the Company will provide a form of the Form 4 on request but the filing is the personal responsibility of the SAR holder. Further, holders of SARs should review the Company’s Policy Statement on Insider Trading before making arrangements for the sale of shares to be issued upon exercise of the right.

15.	Time of Essence: Time is of the essence with respect to delivering notices and stock certificates hereunder. There is no grace period.

16.	Successors: These Terms and Conditions are binding on your heirs and personal representatives and on the successors of the Company.

17.	Counterparts: The letter agreement may be executed in duplicate counterparts, each of which shall be deemed to be an original.

18.	Clawbacks: The SARs are subject to recoupment in accordance with Section 15(i) of the Plan and any other recoupment or clawback policy adopted by the Company, or as agreed with you.

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ORMAT TECHNOLGIES INC.

(the "Company")

2018- INCENTIVE COMPENSATION PLAN

ANNEX A - TAX WITHOLDING FOR ISRAELI EMPLOYEES

Tax Withholding For Israeli Employees - The provisions specified hereunder shall apply only to Eligible Individuals who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the payment of applicable tax (such persons, “Israeli Participants”). All defined terms terms shall have the meaning ascribed to them in the Plan, unless the context requires otherwise.

(i) For the purposes of this Annex A, the following terms shall have the following meanings:

	●	“Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance.

	●	“Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and/or additional rights issued with respect thereto, including, but not limited to, bonus shares, and held in trust by a Trustee for the benefit of the Employee.

●

"Award" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Sections 102 or 3(i) of the Ordinance, Awards shall not be settled in cash.

●

"Award Agreement" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Section 102 of the Ordinance, an electronic acceptance may be used only pursuant to a tax ruling to be obtained, if so required by applicable law.


	●	“Capital Gain Award" (or "CGA)” means an Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(3) of the Ordinance.

●

“Controlling Shareholder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

●

“Employee” means a person who is employed by the Company or an Affiliate, including an individual who is serving as a director or an office holder, but excluding any Controlling Shareholder, all as determined in Section 102 of the Ordinance.

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●

“ITA” means the Israeli Tax Authority.

●

“Ordinary Income Award"("OIA") means an Approved 102 Award elected and designated by the Company to qualify under the ordinary income tax treatment in accordance with the provisions of Section 102(b)(1) of the Ordinance.

●

“Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.

●

“Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003.

●

“Section 102” means Section 102 of the Ordinance and any regulations, Rules, orders or procedures promulgated thereunder as now in effect or as hereafter amended.

●

“Trustee” means any individual or trust company appointed by the Company to serve as a trustee and approved by the ITA, all in accordance with the provisions of Section 102(a) of the Ordinance.

●

“Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

(ii) Any tax liability, of any kind due to the Plan, or resulting from it (including, without derogating from the aforementioned, income tax, capital gains tax, social security, surtax and health tax), and any other obligatory payment applicable as a result of the grant of the right, its exercise and Employee's receipt of Common Stock as a result of such exercise or the sale of underlying Common Stock (the "Common Stocks”), will be fully borne by the Employee.

(iii) The Company recommends that Employee consults with professional advisors and consider the tax implications, including the result of the application of Section 102, of the grant of the right, of its exercise and of the receipt of any Shares.

(iv) Despite of anything to the contrary in the Plan, with respect to any Approved 102 Award, subject to the provisions of Section 102, an Employee shall not sell, release, assign, transfer or give as collateral or any right with respect to them given to any third party whatsoever (collectively “Transfer”) from trust any Share received upon the exercise of an Approved 102 and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Minimal Restriction Period (as defined below) required under Section 102. Notwithstanding the above, if any such sale or other Transfer occurs during the Minimal Restriction Period, the sanctions under Section 102 shall apply to and shall be borne solely by such Employee.

Page 10/13

(v) In accordance with the provisions of Section 102, the Trustee will hold the right in trust for the benefit of the Employee until the right is exercised, if at all (or until the termination of the exercise period, to the extent the right remains unexercised, as applicable). Consequently, the Trustee will hold the right and/or the shares of Common Stock (including any stock dividend or shares of Common Stock derived from issuance of rights exercised during the right’s exercise period) in trust for the benefit of the Employee for the period set forth in Section 102 and the Rules. Such period is on the date of adoption of this Plan at least (i) in the case of a CGA, 24 months from the date on which the right is granted and deposited with the Trustee; or (ii) in the case of an OIA-, 12 months from the date on which the Right is granted and deposited with the Trustee (the “Minimal Restriction Period”), and will not transfer the right and the shares of Common Stock to the Employee prior to the full payment of the applicable taxes. Transfer of the shares of Common Stock from the Trustee to the Employee or their sale by the Trustee prior to the lapse of the Minimal Restriction Period, might involve tax implications (which the Employee should consider prior to taking any such action).

(vi) The Company was engaged with the Trustee with respect to the Awards, rights and Common Stocks (the “Trust Agreement”) and the provisions of the Trust Agreement will apply and obligate any Employee who receives rights under the Plan. The main provisions of the Trust Agreement are: (i) the Company will not grant Awards and rights to its Employees but will grant them to the Trustee who will hold them for at least the Minimal Restriction Period; (ii) during the Minimal Restriction Period, the Awards, rights and Common Stocks will not be transferable; and (iii) after termination of the Minimal Restriction Period, the Employee will be entitled to demand that the Trustee transfer the Common Stocks to the Employee’s name, provided either: (A) the tax applicable to the Employee under Section 102 has been paid and the Trustee holds a confirmation for the payment issued by the ITA; or (B) the Trustee has transferred to the ITA the appropriate percentage amount (determined in accordance with the applicable tax rate) of the consideration received by it for the sale of the Common Stocks, on account of the applicable tax. The Plan and the Trust Agreement will apply to any stock dividends and/or rights granted to the Employee, mutatis mutandis.

(vii) The Company has undertaken not to grant and Awards and rights to Employees under Section 102, unless it received a confirmation from the Employee that the Employee undertakes vis-a-vis the ITA not to exercise the Awards and rights prior to the termination of the Minimal Restriction Period (unless he or she pays all applicable tax).

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(viii) The transfer of the Common Stocks from the Trustee to the Employee or their sale by the Trustee for the benefit of the Employee, all in accordance with the Employee’s order, is possible and may be done in accordance and under the rules, conditions and arrangements to be agreed between the Company and the Trustee and in accordance and subject to applicable law and arrangements (if existing) with the tax authorities.

(ix) The provisions of Section 102 will apply to the Awards and rights to be granted to the Employees, (i.e., grant to and deposit with the Trustee for the benefit of the Employee), in the capital gain tax route. Any tax liability to the Employee will occur upon the earlier of the time the Common Stocks will be transferred from the Trustee to the Employee or sold by the Trustee, without any tax event occurring on the Grant Date of the Award.

(x) In accordance with Section 12(c)(ix) above, and since the Company has chosen the capital gains tax route, as specified in Section 102, any income resulting from the realization of the benefit by the Employee will be deemed as a capital gain and will be taxed on the date of the tax event at the applicable tax rate of 25%, excluding the portion of the income equaling the difference between the exercise price of the Award, if applicable, and the average price of the Common Stock during the 30 trading days prior to the Grant Date, which will be deemed as working income and will be subject to income tax, according to the rate applicable to the Employee, and social security tax and health tax – all provided that all of the provisions of the capital gains tax route are met.

(xi) With regards to Approved 102 Awards , the provisions of the Plan shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit and/or any pre-rulings obtained by the ITA, and the said provisions, permit and/or pre-rulings shall be deemed an integral part of the Plan. Any provision of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan, shall be considered binding upon the Company and the Employees.

(xii) Any tax consequences arising from the grant or exercise of any Award, from the grant of right and/or the underlying Common Stocks, from the payment for stocks covered thereby or from any other event or act (of the Company, and the Trustee or the Employee), hereunder, shall be borne solely by the Employee. The Company and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Employee shall agree to indemnify the Company and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Employee.

Page 12/13

(xiii) The Company and/or, when applicable, the Trustee shall not be required to release any stock certificate to an Employee until all required payments (including any tax liability) have been fully made.

(xiv) With respect to an Unapproved 102 Award, if the Employee ceases to be employed by the Company, the Employee shall extend to the Company a security or guarantee for the payment of tax due at the time of sale of Common Stocks, all in accordance with the provisions of Section 102.

Page 13/13

Exhibit 10.4.2

FORM OF RESTRICTED STOCK UNIT AGREEMENT
FOR TIME-BASED RSUs

Date:

Company: Ormat Technologies, Inc.

Date of Grant:

Total No. of Restricted Stock Units: x,xxx

Vesting Schedule

50% will vest on second anniversary of grant date

25% will vest on third anniversary of grant date

25% will vest on fourth anniversary of grant date

Type: Capital Gain Award

Mr. Full Name,

Dear First Name,

We are pleased to inform you that, as an eligible employee of Ormat Technologies, Inc. (herein called the “Company”) or one of its subsidiaries, you have been granted one or more restricted stock units (herein called “RSUs”) under the Company’s 2018 Incentive Compensation Plan (as amended and restated) and the Restricted Stock Unit Terms and Conditions (herein called the “Plan” and the “Terms and Conditions”).

By your signature, you agree that the RSUs are granted under and governed by the Plan and the Terms and Conditions, and acknowledge receipt of these documents, as well as the Prospectus for the Plan. As set forth in Section 1 of the Terms and Conditions, a signed copy of this agreement must be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel before 5:00 P.M. Eastern time on the 3rd business day after the date of grant noted above. If the 3rd business day is a holiday in the United States or in Israel, such signed copy of this agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. Failure to return a signed copy of this agreement will deem the grant of the RSUs null and void.

This agreement and the documents that accompany to it constitute the entire agreement between you and the Company with respect to the RSUs granted hereunder and supersede in their entirety all prior undertakings and agreements of the Company and yourself, both written and oral, with respect to the RSUs granted hereunder (including the shares underlying it).

Furthermore, by your signature you hereby approve and agree to all the aforesaid in this agreement and the trust agreement signed with the Trustee (as defined in Annex A) and you declare that you are familiar with the provisions of Section 102 and the Capital Gains route. You hereby undertake not to sell or transfer the Shares underlying the RSUs prior to the lapse of the restrictions period, unless you pay all taxes, which may arise in connection with such sale and/or transfer.

[Signature Page Follows]

Ormat Technologies, Inc.

By:

Name: Isaac Angel

Title: CEO

Date:

PARTICIPANT

______________________

Name: Full Name

Date:

RESTRICTED STOCK UNITS
TERMS AND CONDITIONS

As a participant in the Ormat Technologies, Inc. 2018 Incentive Compensation Plan (as amended and restated, the “Plan”), you have been granted one or more Restricted Stock Units (herein called “RSUs”) under the Plan. RSUs give you the opportunity to receive at a specified future date, payment of an amount equal to all or a portion of the Fair Market Value of a specified number of shares of Common Stock after the Vesting Date(s) specified in Section 2 below (herein called the letter agreement) multiplied by the applicable percentage of RSUs specified in Section 2 below, subject to your acceptance of the RSUs as provided in Section 1 below and the other terms and conditions described below.

The date of the grant of the RSUs (herein called the Grant Date) is set forth in the letter agreement.

Acceptance of RSUs: The RSUs will not be deemed granted unless you sign your name in the space provided on the enclosed copies of the letter agreement and cause one signed copy to be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel (or to such other person and place as the Company may specify in writing), before 5:00 P.M. Eastern Time on the 3rd day after the Grant Date. If the 3rd day is a holiday in the United States or in Israel, such signed copy of the letter agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. If the Corporate Secretary does not receive your properly executed copy of the letter agreement before such time, then, anything in the letter agreement and these Terms and Conditions to the contrary notwithstanding, the grant of the RSUs will be deemed null and void ab initio (as of the Grant Date). (Your signing and delivering a copy of the letter agreement will evidence your acceptance of the RSUs upon these Terms and Conditions.)

Vesting:

Subject to the provisions of this Section 2 and of Sections 5, and 6 of these Terms and Conditions the RSUs shall become vested in accordance with the following vesting schedule (each, a “Vesting Date”):

(ii) 50% Shall vest on the second anniversary of Grant Date

(iii) 25% Shall vest on the third anniversary of Grant Date

(iv) 25% Shall vest on the fourth anniversary of Grant Date

No fractional shares shall be delivered and fractional shares shall be disregarded. All vesting increments shall be rounded to the nearest whole number of RSUs.

The RSUs shall not become vested unless you shall have remained continuously in the employ or service of the Company or of one or more of its Subsidiaries on the applicable Vesting Date, except as provided in Section 5 of these Terms and Conditions. Any RSUs that are not vested will terminate on the date of your Separation from Service.

Issuance of Shares: RSUs will be credited to an account to be maintained on your behalf. The Fair Market Value of any vested RSUs measured as of the Vesting Date will be paid within thirty (30) days of the date such Vesting Date. Payment of any RSUs shall be made by the issuance of shares of Common Stock, subject to section 9 hereof.

Transferability of RSUs: The RSUs shall not be transferable by you otherwise than (i) by will or (ii) by the laws of descent and distribution. Any transferred RSU shall continue to be subject to these Terms and Conditions.

Death: Section 2 to the contrary notwithstanding, if you incur a Separation from Service because you die, you will become fully vested in any unvested RSUs awarded under the letter of grant to which these Terms and Conditions are attached.

Other Separation from Service:

(a)

Except as otherwise clearly specified in a duly executed, written, valid and binding agreement between you and the Company, if you incur a Separation from Service before the end of the applicable Vesting Date for any reason other than death, you will immediately forfeit any unvested RSUs.

(b)

Dividend Equivalents: Except as otherwise provided in Section 11, no dividend equivalents shall be payable or accumulated in respect of RSUs.

Clawbacks: The RSUs are subject to recoupment in accordance with Section 15(i) of the Plan and any other recoupment or clawback policy adopted by the Company, or as agreed with you.

Listing Requirements: The Company shall not be obligated to deliver any certificates representing any shares until all applicable requirements imposed by federal and state securities laws and by any stock exchanges upon which the shares may be listed have been fully met.

Adjustments in RSUs:

(a)

The existence of the letter agreement and the RSUs shall not affect or restrict in any way the right or power of the Board of Directors or the stockholders of the Company to make or authorize any reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the shares or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business.

(b)

In the event of any change in or affecting the outstanding shares by reason of a stock dividend or split, merger or consolidation (whether or not the Company is the surviving corporation), recapitalization, spin-off, reorganization, combination or exchange of shares or other similar corporate changes or an extraordinary dividend in cash, securities or other property, the Board of Directors shall make such amendments to the Plan, the letter agreement, these Terms and Conditions and the RSUs and make such adjustments and take actions thereunder as it deems appropriate, in its sole discretion, under the circumstances. Such amendments, adjustments and actions may include, but are not limited to, (i) changes in the number and kind of shares underlying the RSUs set forth in the letter agreement, and (ii) accelerating the vesting of the RSUs. The determination by the Board as to the terms of any of the foregoing adjustments shall be conclusive and binding.

Stockholder Rights: Neither you nor any other person shall have any rights of a stockholder as to shares underlying any RSUs unless and until (a) the Company pays or settles any vested RSUs in shares of Common Stock, and (b) such Common Stock shall have been recorded by the Company’s registrar, American Stock Transfer and Trust Company (herein called “AST”), as having been issued or transferred, as the case may be.

Tax Matters:

(a)

You should consult your tax advisor about tax consequences of the RSUs.

Tax Withholding for U.S. Employees: If and to the extent Federal income tax withholding (and state and local income tax withholding, if applicable) may be required by the Company in respect of taxes on income you realize upon or after payment or settlement of any portion of the RSUs, or upon disposition of any shares of Common Stock acquired through the payment or settlement of any RSUs, the Company may withhold such required amounts from your future paychecks or may require that you deliver to the Company the amounts to be withheld. You may also pay the minimum required Federal income tax withholding (and state and local income tax withholding, if applicable) by electing either to have the Company withhold a portion of the shares of Common Stock otherwise issuable upon payment or settlement of the RSUs, or to deliver other shares of Common Stock you own, in either case having a fair market value (on the date that the withholding amount is to be determined) of the minimum amount required to be withheld, provided that the election will be irrevocable and will be subject to such rules as the Committee may adopt.

Section 409A. The letter agreement, these Terms and conditions and delivery of shares of Common Stock hereunder are intended to be exempt from or to comply with Section 409A of the Code and shall be administered and construed in accordance with such intent. In furtherance, and not in limitation, of the foregoing: (a) in no event may you designate, directly or indirectly, the calendar year of any payment to be made hereunder; and (b) notwithstanding any other provision of the letter agreement and these Terms of Conditions to the contrary, a termination of employment hereunder shall mean and be interpreted consistent with a “separation from service” within the meaning of Code Section 409A with respect to any payment hereunder that constitute a “deferral of compensation” under Code Section 409A that becomes due on account of such separation from service. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company or any Subsidiary be liable to you on account of the failure of the letter agreement and these Terms and Conditions to (a) qualify for favorable U.S. or foreign tax treatment or (b) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, Section 409A of the Code.

Employment or Other Service: Nothing contained herein shall confer any right to continue in the employ or other service of the Company or a Subsidiary or limit in any way the right of the Company or a Subsidiary to change your compensation or other benefits or to terminate your employment or other service with or without cause.

Short-Swing Trading: If you are a director or executive officer of the Company or one of its subsidiaries who is granted RSUs, you must report such grant, the vesting or settlement of such RSUs and any sale of Common Stock received upon settlement of any RSUs, on a Form 4 (Statement of Changes of Beneficial Ownership of Securities) within two business days of such reportable event pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended. The Corporate Secretary of the Company will provide you with a form of the Form 4 upon request, but such filing is the personal responsibility of the holder of RSUs. All holders of RSUs should consult the Company’s Insider Trading Policy before arranging any trade in any of the Company’s securities, including Common Stock.

Time of Essence: Time is of the essence with respect to delivering notices and stock certificates hereunder. There is no grace period.

Successors: These Terms and Conditions are binding on your heirs and personal representatives and on the successors of the Company.

Counterparts: The letter agreement may be executed in duplicate counterparts, each of which shall be deemed to be an original.

ORMAT TECHNOLGIES INC.

(the "Company")

2018- INCENTIVE COMPENSATION PLAN

ANNEX A - TAX WITHOLDING FOR ISRAELI EMPLOYEES

Tax Withholding For Israeli Employees - The provisions specified hereunder shall apply only to Eligible Individuals who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the payment of applicable tax (such persons, “Israeli Participants”). All defined terms shall have the meaning ascribed to them in the Plan, unless the context requires otherwise.

For the purposes of this Annex A, the following terms shall have the following meanings:

“Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance.

“Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and/or additional rights issued with respect thereto, including, but not limited to, bonus shares, and held in trust by a Trustee for the benefit of the Employee.

"Award" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Sections 102 or 3(i) of the Ordinance, Awards shall not be settled in cash.

“Capital Gain Award" (or "CGA)” means an Approved 102 Award elected and designated by the Company to qualify under the capital gain tax treatment in accordance with the provisions of Section 102(b)(3) of the Ordinance.

“Controlling Shareholder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

“ITA” means the Israeli Tax Authority.

“Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.

“Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003.

“Section 102” means Section 102 of the Ordinance and any regulations, Rules, orders or procedures promulgated thereunder as now in effect or as hereafter amended.

“Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

Any tax liability, of any kind due to the Plan, or resulting from it (including, without derogating from the aforementioned, income tax, capital gains tax, social security, surtax and health tax), and any other obligatory payment applicable as a result of the grant of the right, its exercise and Employee's receipt of Common Stock as a result of such exercise or the sale of underlying Common Stock (the "Common Stocks”), will be fully borne by the Employee.

Page 10/13

The Company recommends that Employee consults with professional advisors and consider the tax implications, including the result of the application of Section 102, of the grant of the right, of its exercise and of the receipt of any Shares.

Despite of anything to the contrary in the Plan, with respect to any Approved 102 Award, subject to the provisions of Section 102, an Employee shall not sell, release, assign, transfer or give as collateral or any right with respect to them given to any third party whatsoever (collectively “Transfer”) from trust any Share received upon the exercise of an Approved 102 and/or any share received subsequently following any realization of rights, including without limitation, bonus shares, until the lapse of the Minimal Restriction Period (as defined below) required under Section 102. Notwithstanding the above, if any such sale or other Transfer occurs during the Minimal Restriction Period, the sanctions under Section 102 shall apply to and shall be borne solely by such Employee.

In accordance with the provisions of Section 102, the Trustee will hold the right in trust for the benefit of the Employee until the right is exercised, if at all (or until the termination of the exercise period, to the extent the right remains unexercised, as applicable). Consequently, the Trustee will hold the right and/or the shares of Common Stock (including any stock dividend or shares of Common Stock derived from issuance of rights exercised during the right’s exercise period) in trust for the benefit of the Employee for the period set forth in Section 102 and the Rules. Such period is on the date of adoption of this Plan at least (i) in the case of a CGA, 24 months from the date on which the right is granted and deposited with the Trustee; or (ii) in the case of an OIA-, 12 months from the date on which the Right is granted and deposited with the Trustee (the “Minimal Restriction Period”), and will not transfer the right and the shares of Common Stock to the Employee prior to the full payment of the applicable taxes. Transfer of the shares of Common Stock from the Trustee to the Employee or their sale by the Trustee prior to the lapse of the Minimal Restriction Period, might involve tax implications (which the Employee should consider prior to taking any such action).

The Company was engaged with the Trustee with respect to the Awards, rights and Common Stocks (the “Trust Agreement”) and the provisions of the Trust Agreement will apply and obligate any Employee who receives rights under the Plan. The main provisions of the Trust Agreement are: (i) the Company will not grant Awards and rights to its Employees but will grant them to the Trustee who will hold them for at least the Minimal Restriction Period; (ii) during the Minimal Restriction Period, the Awards, rights and Common Stocks will not be transferable; and (iii) after termination of the Minimal Restriction Period, the Employee will be entitled to demand that the Trustee transfer the Common Stocks to the Employee’s name, provided either: (A) the tax applicable to the Employee under Section 102 has been paid and the Trustee holds a confirmation for the payment issued by the ITA; or (B) the Trustee has transferred to the ITA the appropriate percentage amount (determined in accordance with the applicable tax rate) of the consideration received by it for the sale of the Common Stocks, on account of the applicable tax. The Plan and the Trust Agreement will apply to any stock dividends and/or rights granted to the Employee, mutatis mutandis.

Page 11/13

The Company has undertaken not to grant and Awards and rights to Employees under Section 102, unless it received a confirmation from the Employee that the Employee undertakes vis-a-vis the ITA not to exercise the Awards and rights prior to the termination of the Minimal Restriction Period (unless he or she pays all applicable tax).

The transfer of the Common Stocks from the Trustee to the Employee or their sale by the Trustee for the benefit of the Employee, all in accordance with the Employee’s order, is possible and may be done in accordance and under the rules, conditions and arrangements to be agreed between the Company and the Trustee and in accordance and subject to applicable law and arrangements (if existing) with the tax authorities.

The provisions of Section 102 will apply to the Awards and rights to be granted to the Employees, (i.e., grant to and deposit with the Trustee for the benefit of the Employee), in the capital gain tax route. Any tax liability to the Employee will occur upon the earlier of the time the Common Stocks will be transferred from the Trustee to the Employee or sold by the Trustee, without any tax event occurring on the Grant Date of the Award.

In accordance with Section 12(c)(ix) above, and since the Company has chosen the capital gains tax route, as specified in Section 102, any income resulting from the realization of the benefit by the Employee will be deemed as a capital gain and will be taxed on the date of the tax event at the applicable tax rate of 25%, excluding the portion of the income equaling the difference between the exercise price of the Award, if applicable, and the average price of the Common Stock during the 30 trading days prior to the Grant Date, which will be deemed as working income and will be subject to income tax, according to the rate applicable to the Employee, and social security tax and health tax – all provided that all of the provisions of the capital gains tax route are met.

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With regards to Approved 102 Awards , the provisions of the Plan shall be subject to the provisions of Section 102 and the Tax Assessing Officer’s permit and/or any pre-rulings obtained by the ITA, and the said provisions, permit and/or pre-rulings shall be deemed an integral part of the Plan. Any provision of Section 102 and/or the said permit which is necessary in order to receive and/or to keep any tax benefit pursuant to Section 102, which is not expressly specified in the Plan, shall be considered binding upon the Company and the Employees.

Any tax consequences arising from the grant or exercise of any Award, from the grant of right and/or the underlying Common Stocks, from the payment for stocks covered thereby or from any other event or act (of the Company, and the Trustee or the Employee), hereunder, shall be borne solely by the Employee. The Company and/or the Trustee shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Employee shall agree to indemnify the Company and/or the Trustee and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to the Employee.

The Company and/or, when applicable, the Trustee shall not be required to release any stock certificate to an Employee until all required payments (including any tax liability) have been fully made.

With respect to an Unapproved 102 Award, if the Employee ceases to be employed by the Company, the Employee shall extend to the Company a security or guarantee for the payment of tax due at the time of sale of Common Stocks, all in accordance with the provisions of Section 102.

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Exhibit 10.4.3

2018 Incentive Compensation Plan

Notice of Performance Stock Unit Grant

Participant:	Full Name

Company:	Ormat Technologies, Inc.

Notice:	The Participant has been granted the following Performance Stock Units (“PSUs”) in accordance with the terms of this notice (the “Grant Notice”), the Performance Stock Unit Award Agreement attached hereto as Attachment A (the “PSU Award Agreement”, and together with the Grant Notice, this “Agreement”) and the Plan identified below.

Type of Award:	Performance Stock Units (the “PSUs”),

	Capital Gain Award

Plan:

Ormat Technologies, Inc. 2018 Incentive Compensation Plan, as amended from time to time (the “Plan”)

Grant Date:

Target Number of PSUs:	x,xxx

Performance Period:	The Performance Period begins on the Grant Date and ends on _______ (inclusive)

Vesting Date:

The Participant will receive a benefit with respect to a PSU only if it vests. Two vesting requirements must be satisfied in order for a PSU to vest - the “Active Requirement” and the “Performance Requirement”. Except as otherwise provided in this Agreement, the PSUs will not vest if only one (or if neither) of such vesting requirements is satisfied. If both the Active Requirement and the Performance Requirement are satisfied with respect to the applicable portion of the PSUs, the vesting date (“Vesting Date”) of each such portion of PSUs will be the first date upon which both of such requirements are satisfied. For the avoidance of doubt, the Vesting Date for the portion of PSUs that satisfies the Active Requirement after the Performance Requirement is achieved will be different from the Vesting Date for the portion of PSUs that satisfied the Active Requirement prior to achievement of the Performance Requirement.

Active Requirement:

The Active Requirement (and the number of Shares as to which the Active Requirement is met) will be satisfied based on the Participant’s continued employment or service, as applicable, with the Company or any Subsidiary on each date set forth in the table below:

Active Requirement	Cumulative Percentage of Total Number of Shares as to which Active Requirement is Satisfied
Second Anniversary of Grant Date	50%
Third Anniversary of Grant Date	25%
Fourth Anniversary of Grant Date	25%

	Continuous employment includes any leave of absence approved by the Company or any Subsidiary. A transfer of the Participant’s employment from the Company to a Subsidiary or vice versa, or from one Subsidiary to another, without an intervening period, shall not be deemed a termination of employment or service for purposes of this Agreement.

	If the Participant’s employment or service is terminated for any reason, all PSUs as to which the Active Requirement has not been satisfied as of the date of such termination shall automatically terminate upon such termination. Except as otherwise provided in Section 4 of this Agreement, any PSUs as to which the Active Requirement had been satisfied prior to an applicable termination of employment or service will remain outstanding until the satisfaction of the Performance Requirement. If the Participant’s employment or service is terminated for Cause at any time prior to the occurrence of the Vesting Date, all PSUs shall automatically be forfeited upon such termination.

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Performance Requirement:

The Performance Requirement for the Performance Period is based on the Company’s Relative TSR, which is the rank (by percentile) of the TSR of the Company relative to the TSR of the companies in the Peer Group, as set forth in the Award Agreement. If the Performance Requirement is not satisfied, the PSUs shall be automatically forfeited.

Acknowledgement:

The PSUs will not be deemed granted unless the Participant signs his or her name in the space provided on the enclosed copies of this Agreement and causes one signed copy to be received by the Corporate Secretary of the Company, c/o Ormat Systems Ltd., Industrial Area, P.O. Box 68, Yavne 8100 Israel (or to such other person and place as the Company may specify in writing), or by e-mail before 5:00 P.M. Eastern Time on the 3rd business day after the date of grant. If such 3rd day is a holiday in the United States or in Israel, such signed copy of this Agreement will be considered timely received if it is received by 5:00 P.M. Eastern Time on the following business day in the United States and Israel after such holiday. If the Corporate Secretary does not receive the Participant’s properly executed copy of this Agreement before such time, then, anything in this Agreement to the contrary notwithstanding, the grant of the PSUs will be deemed null and void ab initio (as of the Grant Date). The signing and delivering a copy of this Agreement will evidence the Participant’s acceptance of this Agreement.

[Signature Page Follows]

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the undersigned Participant acknowledges receipt of, and understands and agrees to, the terms and conditions of this Agreement and the Plan.

Ormat Technologies, Inc.

By:

Name: Isaac Angel

Title: CEO

Date:

PARTICIPANT

______________________

Name: Full Name

Date:

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ORMAT TECHNOLOGIES, INC.

2018 Incentive Compensation Plan

Performance Stock Unit Award Agreement

This Performance Stock Unit Award Agreement (this “PSU Award Agreement”), dated as of the Grant Date set forth in the Notice of Performance Stock Unit Grant to which this PSU Award Agreement is attached (the “Grant Notice”), is made between Ormat Technologies, Inc. and the Participant set forth in the Grant Notice. The Grant Notice is included in and made part of this PSU Award Agreement (collectively, this “Agreement”).

1. Definitions. Capitalized terms used but not defined herein have the meaning set forth in the Ormat Technologies, Inc. 2018 Incentive Compensation Plan, as amended from time to time (the “Plan”).

2. Grant of PSUs. Subject to the provisions of this Agreement and the provisions of the Plan, the Company hereby grants to the Participant, pursuant to the Plan, the number of PSUs set forth in the Grant Notice.

3. Vesting Criteria Applicable to PSUs.

(a) Performance Period. The Performance Period for the PSUs shall commence on the Grant Date and shall end on ____________.

(b) Performance Requirement. The Performance Requirement for the Performance Period is based on the Company’s Relative TSR, which is the rank (by percentile) of the TSR of the Company relative to the TSR of the companies in the Peer Group, in each case, for the Performance Period, equal to the product of (i) the quotient of (a) the numeric rank of Company’s TSR relative to the Peer Group, where the lowest TSR in the Peer Group is ranked number 1, and (b) the total number of companies in the Peer Group plus 1, rounded to the nearest hundredth, and (ii) 100. All determinations under this Section 3 shall be made by the Committee. Definitions applicable to the term “Relative TSR” are set forth below:

(i) “TSR” shall be measured by dividing (A) the sum of (1) the dividends paid (regardless of whether paid in cash or property) on Common Stock during the Performance Period, assuming reinvestment of such dividends in such stock (based on the closing price of such stock on the ex dividend date), plus (2) the difference between the average closing price of a share of Common Stock on the principal United States exchange on which such stock trades for the twenty (20) trading days occurring immediately prior to the first day of the Performance Period (the “Beginning Average Value”) and the average closing price of a share of such stock on the principal United States exchange on which such stock trades for the twenty (20) trading days immediately prior to and including the last day of the Performance Period (appropriately adjusted for any stock dividend, stock split, spin-off, merger or other similar corporate events affecting such stock), by (B) the Beginning Average Value.

(ii) “Peer Group” means the companies included on the Standard & Poor’s 500 Index on the first day of the Performance Period, provided, however, the Peer Group may be adjusted or changed by the Committee as circumstances warrant, including, without limitation, the following: (i) if a Peer Group company is acquired by another company, including through a management buy-out or going-private transaction, the acquired company will be removed from the Peer Group for the entire relevant period of measurement, (ii) if a Peer Group company becomes bankrupt, the bankrupt company will remain in the Peer Group, with such bankrupt companies being deemed to have a total shareholder return of negative 100% or (iii) if the Company’s or any Peer Group company’s stock splits (or if there are other similar subdivisions, consolidations or changes in such company’s stock or capitalization), such company’s stock price will be adjusted for the stock split so as not to give an advantage or disadvantage to such company by comparison to the other Peer Group companies.

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(c) Earned Percentage. Except as provided in Section 4 or Section 6 hereof, the PSUs shall be earned based on the Company’s Relative TSR Earned Percentage, as determined from the table below (with the Relative TSR Earned Percentage between the levels set forth in the table determined by linear interpolation, to the nearest one-tenth of one percent).

Relative TSR	Relative TSR Earned Percentage
Less than 35^th Percentile	0%
35^th Percentile	50%
55^th Percentile	100%
75^th Percentile and above	150%

(d) Earned PSUs. Except as otherwise provided in this Agreement, the number of PSUs earned by the Participant (the “Earned PSUs”) shall be the product of the number of PSUs set forth in the Grant Notice multiplied by the Earned Percentage. Notwithstanding the foregoing, if the Company’s TSR for the Performance Period is negative, in no event shall the Relative TSR Earned Percentage be more than one hundred percent (100%). To the extent that the PSUs do not become Earned PSUs pursuant to this Section 3, such PSUs shall be automatically forfeited.

(e) Active Requirement. Except as set forth in Sections 4 and 6 below, vesting of the Earned PSUs shall be subject to the Participant’s continued employment or service with the Company or any Subsidiary on the Vesting Date applicable to each portion of PSUs, as set forth in the Grant Notice.

4. Termination of Employment. Any PSUs that have not been settled in accordance with Section 5 hereof prior to the date on which the status of employment or service of the Participant with the Company or any Subsidiary shall terminate (any such termination, “Termination of Employment”) shall be immediately and automatically forfeited upon such date, except as follows:

(a) Termination due to Death. Upon a Termination of Employment by reason of the Participant’s death, then, notwithstanding such Termination of Employment, the Active Requirement set forth in the Grant Notice shall immediately be satisfied with respect to all outstanding and unvested PSUs and the Relative TSR Earned Percentage shall be deemed satisfied at 100%. The Earned PSUs shall be settled in accordance with Section 5 hereof.

(b) Termination other than for Cause. Except as provided in Section 4(a) hereof, upon a Termination of Employment for any reason other than for Cause, any PSUs as to which the Active Requirement had been satisfied prior to such Termination of Employment will remain outstanding until the satisfaction of the Performance Requirement at the end of the Performance Period. In such event, the Participant shall be eligible to receive any Earned PSUs (based on the portion of PSUs that have satisfied the Active Requirement upon the Termination of Employment) that have been achieved based on the Company’s satisfaction of the Relative TSR Earned Percentage. The Earned PSUs shall be settled in accordance with Section 5 hereof.

5. Settlement of PSUs. As soon as reasonably practicable following the Vesting Date, but in no event later than (i) March 15, 2024 with respect to the portion of PSUs that satisfied the Active Requirement prior to becoming Earned PSUs and (ii) sixty (60) days following the applicable Vesting Date (i.e. fourth (4^th) anniversary of the Grant Date) for the remaining outstanding PSUs, the PSUs shall be settled and paid out, as the Committee, in its sole discretion, shall determine, subject to satisfaction of applicable tax withholding obligations with respect thereto in accordance with Section 7 of this Agreement; provided, however, that if the Participant incurs a Termination of Employment as described in Section 4(a) hereof, then such payment shall be made within sixty (60) days after the date of such Termination of Employment and such Fair Market Value shall be determined as of the date of such Termination of Employment, less applicable taxes in accordance with Section 7. Notwithstanding the foregoing provisions of this Section 5 to the contrary, if at the time of the Participant’s separation from service within the meaning of Code Section 409A, the Participant is a “specified employee” within the meaning of Code Section 409A, any payment hereunder that constitutes a “deferral of compensation” under Code Section 409A and that would otherwise become due on account of such separation from service shall be delayed, and payment shall be made in full upon the earlier to occur of (a) a date during the 31-day period commencing six months and one day following such separation from service and (b) the date of the Participant’s death.

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6. Change in Control. Notwithstanding Sections 3 and 5 hereof, in the event a Change in Control occurs prior to the settlement of the PSUs in accordance with Section 5 of this Agreement, and provided that the PSUs have not been forfeited pursuant to Section 4 prior to the date of such Change in Control, then:

(a) PSUs are not Assumed or Replaced. If upon the occurrence of a Change in Control, the Participant’s PSUs are not converted, assumed, or replaced by a successor with an economically equivalent award, then the Active Requirement set forth in the Grant Notice shall immediately be satisfied with respect to all outstanding and unvested PSUs, and the number of Earned PSUs shall be equal to the product of (A) the number of PSUs set forth in the Grant Notice multiplied by (B) the Relative TSR Earned Percentage, with such percentage determined by using the greater of (i) target level of achievement (100%) and (ii) actual level of achievement (as determined by the Committee, in its sole discretion, as constituted immediately prior to the Change in Control). The PSUs shall be settled within sixty (60) days following the consummation of the Change in Control.

(b) PSUs are Assumed or Replaced. Except as otherwise provided in an employment agreement between the Participant and the Company or any Subsidiary, if upon the occurrence of a Change in Control, the Participant’s PSUs are converted, assumed, or replaced by a successor with an economically equivalent award, then the outstanding and unvested PSUs shall convert to a restricted stock unit (“RSU”) award and such RSUs shall only remain subject to the Active Requirement set forth in the Grant Notice, with the number of converted RSUs to be calculated based on the product of (A) the number of PSUs set forth in the Grant Notice multiplied by (B) the Relative TSR Earned Percentage, with such percentage determined by using the greater of (i) target level of achievement (100%) and (ii) actual level of achievement (as determined by the Committee, in its sole discretion, as constituted immediately prior to the Change in Control). The converted RSUs shall be settled in accordance with Section 5 of this Agreement.

7. Taxes. If and to the extent federal income tax withholding (and state and local income tax withholding, if applicable) may be required by the Company in respect of taxes on income realized by the Participant upon or after payment or settlement of any portion of the PSUs, or upon disposition of any shares of Common Stock acquired through the payment or settlement of any PSUs, the Company may withhold such required amounts from the Participant’s future paychecks or may require that the Participant deliver to the Company the amounts to be withheld. The Participant may also pay the minimum required federal income tax withholding (and state and local income tax withholding, if applicable) by electing either to have the Company withhold a portion of the shares of Common Stock otherwise issuable upon payment or settlement of the PSUs, or to deliver other shares of Common Stock owned by the Participant, in either case having a fair market value (on the date that the withholding amount is to be determined) of the minimum amount required to be withheld, provided that the election will be irrevocable and will be subject to such rules as the Committee may adopt. The Company or any Subsidiary may, in the discretion of the Committee, provide for alternative arrangements to satisfy applicable tax withholding requirements in accordance with Section 21 of the Plan. The provisions specified in Annex A attached hereto shall apply only to Participants who are residents of the state of Israel or those who are deemed to be residents of the state of Israel for the payment of applicable tax. Regardless of any action the Company or any Subsidiary takes with respect to any or all tax withholding obligations, the Participant acknowledges that the ultimate liability for all such taxes is and remains the Participant’s responsibility (or that of the Participant’s beneficiary).

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8. Dividend Equivalents. No dividend equivalents shall be payable or accumulated in respect of the number of PSUs set forth in the Grant Notice

9. No Rights as a Shareholder Prior to Issuance of Shares. Neither the Participant nor any other person shall become the beneficial owner of the shares of Common Stock underlying the PSUs, nor have any rights to dividends, Dividend Equivalents or other rights as a shareholder with respect to any such shares of Common Stock, until and after such shares of Common Stock, if any, have been actually issued to the Participant and transferred on the books and records of the Company or its agent in accordance with the terms of the Plan and this Agreement.

10. Transferability. The PSUs shall not be transferable otherwise than by will or the laws of descent and distribution; provided, however, that the Participant may file with the Company a written designation of a beneficiary on such form as may be prescribed by the Company and may, from time to time, amend or revoke such designation, and, in the event of the Participant’s death, any payment due under Section 5 of this Agreement shall be made to the most recently designated such beneficiary, and if no designated beneficiary survives the Participant, any such payment shall be made to the executor or administrator of the Participant’s estate. Any transferred PSUs shall continue to be subject to the terms and conditions of this Agreement.

11. No Right to Continued Employment or Service. Neither the PSUs nor any terms contained in this Agreement shall confer upon the Participant any rights or claims except in accordance with the express provisions of the Plan and this Agreement, and shall not give the Participant any express or implied right to be retained in the employment or service of the Company or any Subsidiary for any period, or in any particular position or at any particular rate of compensation, nor restrict in any way the right of the Company or any Subsidiary, which right is hereby expressly reserved, to modify or terminate the Participant’s employment or service at any time for any reason. The Participant acknowledges and agrees that any right to Earned PSUs is earned only by continuing as an employee, director or consultant of the Company or any Subsidiary at the will of the Company or such Subsidiary and satisfaction of other applicable terms and conditions contained in the Plan and this Agreement, and not through the act of being hired or being granted the PSUs hereunder.

12. The Plan. By accepting any benefit under this Agreement, the Participant and any person claiming under or through the Participant shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and this Agreement and any action taken under the Plan by the Board, the Committee or the Company, in any case in accordance with the terms and conditions of the Plan. This Agreement is subject to all the terms, provisions and conditions of the Plan, which are incorporated herein by reference, and to such rules, policies and regulations as may from time to time be adopted by the Committee. In the event of any conflict between the provisions of the Plan and this Agreement, the provisions of the Plan shall control, and this Agreement shall be deemed to be modified accordingly. A paper copy of the Plan and the prospectus shall be provided to the Participant upon the Participant’s written request to the Company at the address set forth in Section 14 of this Agreement.

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13. Compliance with Securities Laws. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of this Agreement, the Company shall not be obligated to issue any shares of Common Stock or other securities pursuant to this Agreement if the issuance thereof would result in a violation of any such law. It is intended that the shares of Common Stock underlying the PSUs shall be registered under the Securities Act of 1933, as amended (the “1933 Act”). If the Participant is an “affiliate” of the Company, as that term is defined in Rule 144 under the 1933 Act (“Rule 144”), the Participant may not sell the shares of Common Stock except in compliance with Rule 144. Any certificates representing shares of Common Stock issued to an “affiliate” of the Company may bear a legend setting forth such restrictions on the disposition or transfer of the shares of Common Stock as the Company deems appropriate to comply with federal and state securities laws (and if the shares of Common Stock are evidenced on a noncertificated basis, the shares of Common Stock shall be subject to similar stop transfer instructions). The Participant acknowledges and understands that the Company may not be satisfying the current public information requirement of Rule 144 at the time the Participant wishes to sell the shares of Common Stock or other conditions under Rule 144 which are required of the Company. If so, the Participant understands that the Participant will be precluded from selling the securities under Rule 144 even if the one-year holding period (or any modification thereof under Rule 144) of Rule 144 has been satisfied. Prior to the Participant’s acquisition of the shares of Common Stock, the Participant acquired sufficient information about the Company to reach an informed knowledgeable decision to acquire such securities. The Participant has such knowledge and experience in financial and business matters as to make the Participant capable of utilizing said information to evaluate the risks of the prospective investment and to make an informed investment decision. The Participant is able to bear the economic risk of his or her investment in the shares of Common Stock. The Participant agrees not to make, without the prior written consent of the Company, any public offering or sale of the shares of Common Stock although permitted to do so pursuant to Rule 144(k) promulgated under the 1933 Act, until all applicable conditions and requirements of Rule 144 (or registration of the shares of Common Stock issued pursuant to this Agreement under the 1933 Act) and this Agreement have been satisfied. The Participant further agrees hereby that, as a condition to the issuance of shares upon settlement of the PSUs, the Participant will enter into and perform any underwriter’s lock-up agreement requested by the Company from time to time in connection with public offerings of the Company’s securities.

14. Notices. All notices required to be given under this Agreement or the Plan shall be in writing and delivered in person or by registered or certified mail, postage prepaid, to the other party, in the case of the Company, at the address set forth in the Grant Notice, or, in the case of the Participant, at the Participant’s address set forth in the Company’s records; provided, however, any such notice to the Participant may be delivered electronically to the Participant’s email address set forth in the Company’s records. Each party to this Agreement agrees to inform the other party immediately upon a change of address. All notices shall be deemed delivered when received.

15. Adjustments/Changes in Capitalization. The shares of Common Stock underlying the PSUs are subject to the adjustment provisions set forth in Section 18 of the Plan.

16. Clawback. The PSUs are subject to recoupment in accordance with Section 16(i) of the Plan and any other recoupment or clawback policy adopted by the Company, or as agreed with the Participant.

17. Other Plans. The Participant acknowledges that any income derived from the PSUs shall not affect the Participant’s participation in, or benefits under, any other benefit plan or other contract or arrangement maintained by the Company or any Subsidiary.

18. Entire Agreement and Amendments. This Agreement and the Plan contain the entire agreement of the parties relating to the matters contained herein and supersede all prior agreements and understandings, oral or written, between the parties with respect to the subject matter hereof. This Agreement may be amended in accordance with Section 19 of the Plan.

19. Binding Effect. The terms and conditions hereunder shall, in accordance with their terms, be binding upon, and inure to the benefit of, all successors of the Participant, including, without limitation, the Participant’s estate and the executors, administrators, or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy, or representative of creditors of the Participant. This Agreement shall be binding upon and inure to the benefit of any successors to the Company.

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20. Severability. If any provision of this Agreement is rendered or declared illegal or unenforceable by reason of any existing or subsequently enacted legislation or by the decision of any arbitrator or by decree of a court of last resort, the parties shall promptly meet and negotiate substitute provisions for those rendered or declared illegal or unenforceable to preserve the original intent of this Agreement to the extent legally possible, but all other provisions of this Agreement shall remain in full force and effect.

21. Electronic Delivery and Signatures. The Company may, in its sole discretion, decide to deliver any documents related to the PSUs, this Agreement or to participation in the Plan or to future grants that may be made under the Plan by electronic means or to request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. If the Company establishes procedures of an electronic signature system for delivery and acceptance of Plan documents (including this Agreement or any Award Agreement like this Agreement), the Participant hereby consents to such procedures and agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature.

22. Governing Law. The execution, validity, interpretation, and performance of this Agreement shall be governed by, and construed in accordance with, Delaware law applied without giving effect to any conflicts-of-law principles, except to the extent pre-empted by federal law.

23. Section 409A. This Agreement and delivery of shares of Common Stock under this Agreement are intended to be exempt from or to comply with Section 409A of the Code and shall be administered and construed in accordance with such intent. In furtherance, and not in limitation, of the foregoing: (a) in no event may the Participant designate, directly or indirectly, the calendar year of any payment to be made hereunder; and (b) notwithstanding any other provision of this Agreement to the contrary, a termination of employment hereunder shall mean and be interpreted consistent with a “separation from service” within the meaning of Code Section 409A with respect to any payment hereunder that constitute a “deferral of compensation” under Code Section 409A that becomes due on account of such separation from service. Notwithstanding any provision of the Plan to the contrary, in no event shall the Company or any Subsidiary be liable to the Participant on account of this Agreement’s failure to (a) qualify for favorable U.S. or foreign tax treatment or (b) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, Section 409A of the Code.

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ORMAT TECHNOLGIES INC.

(the "Company")

2018- INCENTIVE COMPENSATION PLAN

ANNEX A - TAX WITHOLDING FOR ISRAELI EMPLOYEES

(i) For the purposes of this Annex A, the following terms shall have the following meanings:

	●	“Affiliate” means any “employing company” within the meaning of Section 102(a) of the Ordinance.

	●	“Approved 102 Award” means an Award granted pursuant to Section 102(b) of the Ordinance and/or additional rights issued with respect thereto, including, but not limited to, bonus shares, and held in trust by a Trustee for the benefit of the Employee.

●

"Award" shall have the meaning ascribed to it in the Plan; provided, however, that for the purposes of Sections 102 or 3(i) of the Ordinance, Awards shall not be settled in cash.

●

“Controlling Shareholder” shall have the meaning ascribed to it in Section 32(9) of the Ordinance.

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●

“ITA” means the Israeli Tax Authority.

●

“Ordinance” means the Israeli Income Tax Ordinance [New Version] 1961 as now in effect or as hereafter amended.

●

“Rules” means the Israeli Income Tax Rules (Tax Relief in Issuance of Shares to Employees) 2003.

●

“Section 102” means Section 102 of the Ordinance and any regulations, Rules, orders or procedures promulgated thereunder as now in effect or as hereafter amended.

●

“Unapproved 102 Award” means an Award granted pursuant to Section 102(c) of the Ordinance and not held in trust by a Trustee.

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(x) In accordance with Section 12(c)(ix) above, and since the Company has chosen the capital gains tax route, as specified in Section 102, any income resulting from the realization of the benefit by the Employee will be deemed as a capital gain and will be taxed on the date of the tax event at the applicable tax rate of 25%, excluding the portion of the income equaling the difference between the exercise price of the Award, if applicable, and the average price of the Common Stock during the 30 trading days prior to the date of grant, which will be deemed as working income and will be subject to income tax, according to the rate applicable to the Employee, and social security tax and health tax – all provided that all of the provisions of the capitl gains tax route are met.

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Exhibit 31.1

Ormat Technologies, Inc.

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Doron Blachar, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2020 of Ormat Technologies, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By: /s/ DORON BLACHAR
	Doron Blachar Chief Executive Officer

Date: August 6, 2020

Exhibit 31.2

Ormat Technologies, Inc.

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Assaf Ginzburg, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2020 of Ormat Technologies, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By: /s/ ASSAF GINZBURG
	Assaf Ginzburg Chief Financial Officer

Date: August 6, 2020

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Doron Blachar, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Ormat Technologies, Inc. on Form 10-Q for the quarter ended June 30, 2020 (i) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and (ii) that information contained in such quarterly report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ormat Technologies, Inc. This written statement is being furnished to the Securities and Exchange Commission as an exhibit accompanying such quarterly report and shall not be deemed filed pursuant to the Exchange Act.


	By:	/s/ DORON BLACHAR
		Name: Doron Blachar
		Title: Chief Executive Officer

Date: August 6, 2020

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Assaf Ginzburg, certify, pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the quarterly report of Ormat Technologies, Inc. on Form 10-Q for the quarter ended June 30, 2020 (i) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and (ii) that information contained in such quarterly report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of Ormat Technologies, Inc. This written statement is being furnished to the Securities and Exchange Commission as an exhibit accompanying such quarterly report and shall not be deemed filed pursuant to the Exchange Act.

	By:	/s/ ASSAF GINZBURG
		Name: Assaf Ginzburg Title: Chief Financial Officer

Date: August 6, 2020