2012 MSSC Annual Salinity Summit Desalination Experience in Israel

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

2. Because we don't share Moses’ abilities to draw water from the rock...

3. Sea Water Desalination In accordance with the Government decision (1999) large scale seawater desalination facilities are being built: 127 Hadera Another 50 MCM facility in planning (150) Sorek 45 (90) Palmachim (100) Ashdod Overall until 2013 = ~ 600 MCM/Y Until 2020 = 750 MCM/Y 120 Ashkelon

4. Seawater Desalination Facilities in Israel

5. Ashkelon Seawater Desalination Facility The second largest SWRO operating desalination plant worldwide Capacity 120 M m3/year (97 x 103 AFY) Technology RO (Reverse Osmosis) Project Type BOT (Build-Operate-Transfer) - 25 years Location Ashkelon, Israel Commissioned2005

6. Shareholders and Contractual Structure State of Israel Concession Agreement Lenders Financing Agreement/s VID IDE (50%) + Veolia (50%) EPC Contract O&M Contract O&M Contractor - ADOM IDE (40.5%) + Veolia (59.5%) EPC Contractor - OTID IDE (50%) + OTV (50%) 6

7. Water Price Fixed Component Variable Component • Indexed to: • Currency basket • CPI • Indexed to: • Electricity price • CPI • To cover: • Capital Expenditure • Fixed EPC, Energyand O&M costs • To cover: • Cost of Consumables • Variable energy and O&M costs $ Bid Water Price* $ 0.52/m3 * A/O September 2001

8. Aerial View North Pre-Treatment NorthRO House Post-Treatment TPP Gas Station Product Storage SouthPre-Treatment SouthRO House Electrical Buildings& Connections

9. Key Technical Parameters • Total desalination capacity – 120 M m3/year (97 x 103 AFY) • Plant footprint – 350m x 200m • Feed seawater – 40,750 ppm TDS • Product water requirement: Potable water according to the Israeli MoH, Public Health Regulations & the Water Desalination Authority (WDA): • TDS < 300 ppm • Cl < 20 ppm • pH: 7.5 ~ 8.5 • LSI: 0 ~ 0.5 • B < 0.40 ppm

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

11. Plant Achievements The second largest operating SWRO desalination facility in the world One of the lowest-ever costs for high quality desalinated seawater GWI Award – ‘Desalination Plant of the Year’ in 2006 On-Time. Within Budget. Above Specifications 11

12. Hadera Seawater Desalination Facility

13. Hadera Seawater Desalination Facility The World’s largest SWRO desalination plant • Capacity: 127M m3/year (103 x 103 AFY) • Technology: RO (Reverse Osmosis) • Project Type: BOT (Build-Operate-Transfer) - 25 years • Location: Orot Rabin Power Station - Hadera, Israel • Commissioned: 2009

14. Hadera Shareholders and Contractual Structure

15. Structure of Water Tariff Hadera Water Price Approx. US$ 0.57 / m3 (2006) Variable • Variable component • Indexed to: • Electricity price • CPI • To cover: • Cost of Consumables • Variable energy and O&M costs Fixed • Fixed component • Indexed to: • Currency basket • CPI • To cover: • Capital Expenditure • Fixed EPC, Energy and O&M costs

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

17. Hadera Key Technical Parameters • Total desalination capacity – 127 Mm3/year (103 x 103 AFY) • Plant footprint – 1,200 m x 50 m ~150 m • Feed seawater – 40,200 ppm-TDS @ 15~30oc • Product water requirement: Potable water according to WHO recommendations: • TDS < 230 ppm • Cl < 20 ppm • pH: 7.8 ~ 8.5 • LSI: 0 ~ 0.5 • B < 0.30 ppm • Electrical consumption – less than 80 MW

18. Hadera Plant Characteristics & Achievements • Narrow footprint + overhead high tension electrical lines • Two separate treatment facilities • 3 center design concept (HP, RO, ERS) • Cascade Boron treatment • No IPP – variable production rate • International funding: Euromoney Project Finance ‘Deal of the Year Award’ in 2007 • The largest operating SWRO desalination facility in the world • One of the lowest-ever water costs for high quality desalinated seawater

19. Sorek Seawater Desalination Facility Capacity 150 Mm3/year (122 x 103 AFY) (max. 26,000 m3/hr): 20% of the domestic water consumption in Israel Technology Seawater Reverse Osmosis Project Type 25 years BOT (Build, Operate & Transfer) Location Sorek, Israel Presently under Construction, to be operational in August 2013 One of the largest SWRO desalination plants worldwide

20. Shareholders and Contractual Structure

21. Water Price Structure Fixed Component Variable Component • Indexed to: • Currency basket • CPI • Indexed to: • Electricity price • CPI • To cover: • Capital Expenditure • Fixed Energyand O&M costs • To cover: • Cost of Consumables • Variable Energy and O&M costs $ Bid Water Price* $ 0.54/m3 * A/O October 2009

22. Key Technical Parameters • Total desalination capacity – 150 Mm3/year (122 x 103 AFY) • Plant footprint – 590 m x 170 m • Feed seawater – 40,750 ppm TDS • Product water requirement: Potable water according to the Israeli MoH, Public Health Regulations & the Water Desalination Authority (WDA):

23. Main Plant Features Double Line Intake Three Pressure Center Design concept (HP, RO, ERS) Introduction of large diameter (16”) membrane elements Innovative design incorporating vertical arrangement of membrane PV Membrane based Boron Removal System Self-Generating Energy Supply System Technology 23

24. Environmental Awareness The envisaged design, execution and operation of the plant anticipate minimal impacts to the environment • Prevention/minimization of disturbances • No marine/shoreline/land impacts thanks to pipe-jacking method and the location of the feed water pumping station on site • Minimal entrainment/impingement effects at the intake suction heads • Reduced electrical and chemical consumption • Natural gas fired IPP • Use of environmentally harmless chemicals and treatable cleaning solutions • Treatment of media filters and limestone reactor backwashing

27. SWRO Prices

28. Exceptional Cost Efficiency of Israel’s Desalination Facilities

29. fredil@ide-tech.com www.ide-tech.com