Earnings Call Transcript - ENLT 2026-11-03

Operator

Good day, and thank you for standing by. Welcome to Enlight Renewable Energy's Third Quarter 2026 Earnings Call. Please be advised that today's conference is being recorded. I would now like to hand the call over to Limor Zohar-Megan, Director of Investor Relations. Please go ahead.

Limor Zohar Megen, Head of Investor Relations

Good morning, everyone, and thank you for joining Enlight Renewable Energy's Third quarter, 2026, earning conference call. Before beginning this call, I would like to draw participants' attention to the following. Certain statements made on the call today, including but not limited to statements regarding business strategy and plans, our project portfolio, market opportunity, utility demand and potential growth, discussions with commercial counterparties and financing sources, pricing trends for materials, Progress of company projects, including anticipated timing of related approval and project completion and anticipated production delays, expected impact from various regulatory developments, completion of development, the potential impact of the current conflicts in the Middle East and our operations and financial conditions, and company action designed to mitigate such impact, and the company's future financial and operational results and guidance, These statements, including revenue and adjusted EBITDA, are forward-looking statements within the meaning of U.S. federal securities laws, which reflect management's best judgment based on currently available information. We reference certain project metrics in this earning call, and additional information about such metrics can be found in our earning release. These statements involve risks and uncertainties that may cause actual results to differ from our expectations. Please refer to our 2025 annual report filed with the SEC on March 30, 2026, and other filings for more information on specific factors that could cause actual results to differ materially from forward-looking statements. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Additionally, non-IFRS financial measures may be discussed on the call. These non-IFRS measures should be considered in addition to and not as a substitute for or in isolation from our results prepared in accordance with IFRS. Reconciliations to the most directly comparable IFRS financial measures are available in the earning release and the earning presentations for today's call, which are posted on our Investor Relations webpage. With me this morning are Adi Leviathan, Chief Executive Officer of ENLIGHT, Nir Yehuda, Chief Financial Officer of ENLIGHT, and Jared McKee, Chief Executive Officer of CLINERA. Adi will We will begin with an overview of our performance and key milestone achievements during the quarter, followed by Nir, who will review our financial results for the third quarter. Jared will then provide an update on our U.S. operations and business activities. Our prepared remarks will be accompanied by a presentation. To follow along, please access the webcast or visit enlightenergy.com slash data slash financial dash reports. Following the prepared remarks, we will open the call for a question-and-answer session. I will now turn the call over to Adi Leviathan, CEO of Enlight. Adi, please begin.

Adi Leviatan, CEO

Good morning and good afternoon, everyone, and thank you for joining us. We delivered another strong quarter at Enlight with continued growth across our key financial metrics and significant progress in line with our growth plan. This quarter demonstrates the strength of Enlight's platform across the full project life cycle. We are expanding our operating portfolio and delivering strong financial performance, advancing projects through construction and into operation, and developing the next wave of growth. We are executing our near-term plan while building the pipeline that we expect to sustain our growth well beyond 2028. We are operating in dynamic times with markets questioning the pace and scale of the infrastructure spending of the large technology companies. As AI and data center infrastructure spending grows, so does investor scrutiny around the scale, timing, and returns on that investment. We believe it is important to distinguish market volatility from the underlying infrastructure need. Capital expenditure alone cannot deliver data center growth. This growth requires power, grid access, and the ability to develop and execute complex infrastructure projects. Power developer and infrastructure companies will be essential to turning these investments into operating capacity. For Enlight, we believe this creates a significant opportunity. Our generation and storage portfolio, grid connection expertise, development platform, and execution capabilities position us to help enable this growth and capture the value of providing the infrastructure it requires. We delivered record third-quarter results across all key financial metrics. Total revenues and income reached $231 million, up 40% year-over-year, while adjusted EBITDA increased 38% to $154 million. Operating cash flow reached approximately $104 million, up 26% year over year, reflecting our ability to convert operating performance into growing cash generation, which is becoming an increasingly important internal source of capital to support our continued growth. These results demonstrate the growing scale of our operating platform. Over the past several years, we have invested significantly in the capabilities required to develop, finance, construct, and operate large and increasingly complex renewable energy projects across multiple markets. As our portfolio grows, that investment is translating into tangible financial results, demonstrating the growing scale of our operating platform. Beyond our near-term financial performance, we also made significant progress advancing the portfolio this quarter. Our mature portfolio has reached approximately 12.7 factored gigawatts, with an expected annual revenue rate of approximately $2.4 billion, while our development and advanced development portfolios grew by 9% to 33.5 factored gigawatts. Equally important is the portfolio's continued maturation into construction and operation. We are on track to have a record level of capacity under construction by the end of 2026. Our financial strength underpins our growth. We are generating cash flow at an annualized rate of approximately $400 million in 2026, While maintaining a disciplined debt structure that is predominantly non- or limited recourse, and fixed or hedged interest rates. NEAR will review our financial position in greater detail shortly. We also achieved important milestones this quarter. We continue to expand and advance our portfolio in the central and eastern U.S., most notably Blackwater, one of the largest projects in PJM. Jared will discuss this progress in more detail later in the presentation. In Europe, we continue to expand our energy storage pipeline, bringing the annual revenue run rate of our mature European portfolio to approximately $630 million, double over the past year. I will now turn the call over to Nir to review our financial results.

Nir Yehuda, CFO

Thank you, Adi. Enlight's third-quarter financial results are yet another demonstration of the strength and scale of our platform across our markets. They reflect our ability to consistently translate strong execution and operational capabilities into solid financial performance, providing a strong foundation for sustained growth in the years ahead. Enlight's total revenue and income increased to $231 million, up 40% for $165 million in Q325. The growth was given by newly operational projects, which contributed $21 million in electricity sales and $70 million in tax benefits, while several exchange rate movements contributed $9 million. In addition, revenues from electricity trading activity in Israel contributed $34 million, an increase of $70 million compared to Q325, excluding the impact of the exchange rate. This growth was given by the expansion of our customer base and strong seasonal demand. The company-adjusted EBITDA increased by 38% to $154 million from $112 million in Q3.25. The $66 million increase in revenue income was partially offset by $22 million increase in cost of sell, mainly related to the expansion of electricity trading activity in Israel and union operational projects. Third quarter net income amounted to $34 million compared to $32 million in Q3.25. The $42 million increase in adjusted EBITDA was largely offset by a $9 million increase in depreciation and amortization, many due to newly operational projects, a $3 million increase in share-based compensation expenses, and $10 million net increase in other expenses. In addition, net financial expenses increased by $20 million, reflecting $10 million related to newly operational projects and the absence of $13 million in financial income from the GACAMA refinancing recorded in Q3-25, partially offset by a $3 million increase in interest income on cash deposits. Excluding one-time items, net income increased by 76% compared to Q3-25. On a pre-tax basis, these items included $20 million PPA termination fee for the gemstone and rustic seal project, partially offset by $12 million in compensation and advanced payment refunds from a supplier, as well as $13 million in financial income mentioned above. Jared will elaborate on the PPA termination shortly. Strong operating cash flow generation continued, supporting on an annual run rate of about $400 million. This recurring cash flow provided an important source of internally generated capital, reinforcing our ability to execute our growth strategy. The strong financial performance continued throughout the first nine months of 26, with revenues and income increasing by 49%. Adjusted EBITDA increased by $130 million, or 38%, to $469 million, and by 48%, excluding the contribution from the sell-off interest in Sunlight Cluster. Excluding the Sunlight transaction and the one-time items in Q325 and Q326 discussed earlier, net income increased by 122% year-over-year. Operating cash flow for the first nine months of 26 increased by 39% to $289 million, reflecting strong cash conversion of EBITDA, excluding non-cash tax benefits. Based on our strong year-to-date financial performance, we are once again raising and narrowing our full year 26 guidance. Revenue's guidance is now $810 to $830 million, up from $790 to $820 million, and adjusted EBITDA guidance is $575 to $590 million, up from $565 to $585 million. The increase reflects our strong financial performance and improved revenue outlook for a light electricity trading operation in Israel, as well as higher electricity price in Europe and Israel. We expect 26 to be another year of strong, profitable growth, continuing the track record of elevated yet consistent growth we have demonstrated since our inception. Turning to our financial position, I would like to highlight the resilience of our debt structure, particularly in the current interest rate environment. As you can see, 80% of our $5.6 billion outstanding long-term debt is non-RECOS project financed, and close to 90% is effectively fixed rate, with a balanced currency breakdown. Together with our balanced corporate debt repayment schedule, this provides strong protection against interest rate volatility. The spread between financing costs and project returns remains attractive, supporting the continuing expansion of our project portfolio. As of the end of the third quarter, our cash and cash equivalents at the top core level amounted to $420 million, with an additional $360 million held by subsidiaries. During the quarter, we repaid our CSF bond, totaling approximately $185 million, capital expenditure reached approximately $760 million during the quarter, leading to a total of $2.1 billion of capital expenditure over the first nine months of 2016. As we continue to execute our business plan, we also had $520 million in credit facility, of which about $470 million was available, and approximately $1.8 billion in LC and surety bond facility, with $1.2 billion available, further enhancing our financial flexibility. Our strong liquidity position and financial resource will continue to support our growth towards annual revenue and income of over $2.2 billion. With that, I will turn the call over to Jared to review our U.S. operation and business activities.

Speaker 10

Thank you, Nir. We delivered another quarter of strong execution across the Clinera portfolio, expanding our advanced development and development components by more than two-factor gigawatts, We have achieved new development milestones and continued construction across eight projects. Despite continued volatility in trade policy and global markets, our mature portfolio projects remain on track with minimal impact to projected costs or margins. We continue to make strides, expanding our presence beyond WEK into the integrated markets of PJM, MISO, and SPP. After adding about one-factor gigawatts to the development component in PJM and MISO combined during this quarter, 40% of the projects in our advanced development and development portfolio are within these markets. We continue to expand our off-take pool and make inroads with large-load commercial and industrial customers. Specifically, in these integrated markets, hyperscalers are increasing their demand for new energy and storage capacity. With the bring-your-own-generation structures gaining clarity, our advanced portfolio projects offer attractive options for large-load customers. One example of these projects is our Blackwater project, which this quarter received local permitting approval, clearing a major hurdle in the project pipeline. Our initial phase of work includes a 600-megawatt PV buildout with potential for additional storage capacity through our interconnection agreement. As we have successfully done in the West, we are pursuing a connect-and-expand strategy with this project. In PJM and MISO, we have chosen to go back to the market with our Gemstone and Rustic Hills projects. Combined, these two projects represent 439 factored megawatts. This decision was made following rounds of negotiation with our previous contract holders, noting market conditions for both input costs and energy pricing have greatly changed since the legacy contracts were originally signed. This decision required $20 million in termination fees, which we believe we will more than recover with fresh contracts in the current high-demand environment. This quarter has also seen changes in federal trade policy as it relates to our industry, specifically Section 232 tariffs. As we have noted in previous quarterly reports, we have shielded our projects scheduled to reach COD in 2027 and 2028 from this kind of volatility. As a result, we are not reporting increased costs for any project in that tranche. Looking beyond 2028, we remain confident in the margins of our safe-harbored portfolio of nearly 18-factor gigawatts. Our track record and portfolio scale provides strong access to a growing domestic supply chain, while increasing demand for new generation continues to support attractive PPA pricing. Moving on to updates to our projects in construction. We are currently building out more than four-factor gigawatts of generation and energy storage across eight projects. Our flagship CO bar complex in northern Arizona includes five phase build-outs, totaling 1,211 megawatts of PV generation and 4,000 megawatt hours of energy storage. During the third quarter, we broke ground on the remaining energy storage phases, CO-BAR 4 and CO-BAR 5. This milestone marks full construction mobilization on the entirety of the CO-BAR complex. The complex remains on track to achieve an initial COD for CO-BAR 1 in the fourth quarter of 2027, with subsequent phases coming online through 2028. About 100 miles to the east of COVAR, north of the city of Holbrook, Arizona, we continue to construct the first phase of our snowflake complex. Snowflake A includes 594 megawatts of PV generation and 1,900 megawatt hours of energy storage. Tiling and racking are complete. Module installation is more than halfway finished, and the project remains on schedule for COD In California, Country Acres has entered final commissioning. The 403-megawatt solar and 688-megawatt-hour storage project is fully contracted with SMUD and remains on track to achieve commercial operation by year end. In our home state of Idaho, progress continues at the Crimson Orchard Solar and Storage Project. This includes 120 megawatt PV and 400 megawatt hours of energy storage. All batteries are on site, piles are complete, and mounting of the modules and wiring is more than 50% complete. The project remains on track for a COD in the second quarter of 2027. With that, I'll turn the call over to Adi.

Adi Leviatan, CEO

Thank you, Jared. Turning to Europe, we continue to make significant progress and expand our energy storage platform. During the quarter, we acquired two additional pre-construction energy storage projects in Finland with a total capacity of 858 megawatt-hour, which were added to the three Finnish storage projects in our portfolio. And over the past year, we expanded our mature portfolio into four new European markets, Germany, Poland, Romania, and Finland, and added 6.6 gigawatt hours of energy storage capacity, with elevated project returns. We also doubled the forecasted annual revenue run rate, adding approximately $300 million. This expansion builds on the local platforms and capabilities we have developed across Europe and strengthens an important additional growth engine for InLite. Our European portfolio continues to expand and mature. The mature component of the portfolio now totals 4.2 factored gigawatts across 12 European countries with an expected annual revenue run rate of approximately $630 million. Together with our progress in the U.S., this underscores the breadth of our platform and strengthens our visibility into in life's next phase of growth while maintaining geographical and technological diversification, which is core to our strategy. Let me now turn to our roadmap and the priorities ahead. Our global portfolio grew strongly this quarter to 46.2 factory gigawatts, further strengthening the foundation for future growth. Our increasing scale enhances our advantages across development, procurement, financing, and execution. Ultimately, size alone does not create value. Execution does. Advancing projects and converting our portfolio into operating assets and cash flows. We made significant progress this quarter as the next slides demonstrate. During the quarter, approximately 1.2 factored gigawatt entered construction. Of this, 907 factored megawatt derived from stages four and five of the CO-bar complex, including approximately 3.2 gigawatt hours of energy storage capacity. We also expanded our pre-construction portfolio primarily through the acquisition of two additional energy storage projects in Finland. We continued to build our presence in markets with particularly strong growth in demand for storage. Projects advancements and new additions have grown the mature component of the portfolio to 12.7 factored gigawatts, representing approximately $2.4 billion in expected annual revenues. At the same time, we continue to add early-stage projects to the portfolio. Key additions this quarter included 2.1 factored gigawatt in the U.S. across PJM, MISO, and WEC. This progress reflects the core of Enlight's business model and discipline, advancing projects towards construction and operations while replenishing the pipeline with new opportunities, allowing us to sustain growth at scale over time. Importantly, this progress spans across multiple geographies and technologies. Diversification is a fundamental strength of Enlight's model. Markets move at different speeds. Our multiple growth platforms give us the flexibility to allocate capital and execution resources towards opportunities where we see the most attractive risk-adjusted returns. We expect this pace of project advancements to continue. Building on the 1.2-factor gigawatts that entered construction over the past three months, we expect an additional 1.3-factor gigawatts to begin construction in the next few months. By year-end, roughly 80% of our mature portfolio is expected to be either operational or under construction. This is a clear measure of execution. We're building a large pipeline and steadily converting it into projects that are moving closer to being operational and generating cash. This progress strengthens our visibility into achieving our 2028 targets. We now have 8.7 factored gigawatts that are under construction or expected to begin construction through 2027, with the majority of the required capital already secured. Much of the execution framework is already in place. Approximately 80% of this capacity will be under construction by the end of 2026, and 85% is either contracted, primarily through PPAs, or intentionally merchant, giving us potential upside in the current environment of rising electricity prices. Our capital plan is also well-advanced. Approximately 70% of the required project financing is secured, and 60% of the required equity has been invested. With a substantial portion of our funding needs already locked in, our growth plan's remaining exposure to interest rate volatility is relatively limited. Together, these milestones give us a high level of confidence in our roadmap to exceed $2.2 billion in annual revenue run rate by the end of 2028, supported by 12 factored gigawatts of capacity. This represents a 41% compounded annual growth rate in both capacity and revenues. Our roadmap is grounded in the execution of known and fully developed projects, rather than assumptions about future pipeline additions. Our visibility extends beyond 2028. As projects advance, an increasing share of our mature portfolio represents capacity and revenues expected to come online in 2029. While executing our 2028 plan, we are already building the next phase of growth. This is a core strength of our model. As one wave of projects approaches operations, the next is already maturing behind it. Growth creates value only when it delivers attractive returns. That is why capital discipline is fundamental to how we manage that growth, and the returns embedded in our mature portfolio demonstrate this discipline in practice. Projects currently under construction and in pre-construction are expected to generate unlevered returns of approximately 13%, increasing to over 18% after leverage. Even in a higher cost of capital environment in some markets, we continue to see attractive opportunities and healthy spreads between project returns and our cost of capital. We continuously reassess project economics as projects mature and deploy capital where we believe the risk-adjusted returns are accretive to our shareholders. We believe in light is entering its next phase of growth from the strongest position in our history. We have leading platforms across our geographies, a large and diversified portfolio, strong access to capital and global supply chains, and proven execution capabilities across the full project life cycle. These strengths are reinforced by a global network of leading financial, commercial, and strategic partners. Market conditions increasingly favor these strengths. Electricity demand is accelerating. Power prices have increased in several of our operating markets, while grid capacity is becoming increasingly scarce and valuable. Equipment costs remain attractive, particularly for solar and storage. While regulation continues to evolve in the U.S. and Europe, new frameworks are emerging to accommodate large load demand. In the U.S., bring-your-own-generation approaches in markets such as PJM and SPP could create additional need for new renewable generation. In this environment, in light scale, diversification, and execution capabilities, provide increasingly valuable competitive advantages. Supportive market dynamics and the platform we have built position us exceptionally well to deliver our existing growth plan and capture the next generation of opportunities across the full energy value chain. Our priorities are clear. Deliver our 2028 plan and build the next phase of growth beyond it. With that, I will open the call for questions.

Operator

Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone. To remove yourself from the queue, you may press star 11 again. Please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Please stand by while we compile the Q&A roster. Our first question comes from the line of Justin Clare of Roth Capital Partners. Your line is open, Justin.

Justin Clare, Analyst — ROTH Capital Partners

Hi, thanks for the time here. I wanted to just start off with the guidance. And so for Q4, it looks like the guide implies deceleration in the year-over-year growth rate for revenue and adjusted EBITDA compared with the growth rates that you had achieved in the first three quarters of the year. And so wondering if you just walk through the primary drivers of that slowdown. Is it really just a function of project COD timing, or are there any nonrecurring items or timing-related factors that you're anticipating in Q4 here?

Itay Banayan

Hey, Justin. Good morning. Ita is here. I'm here with Adi and Nir.

Adi Leviatan, CEO

Hi, Justin. Justin.

Itay Banayan

So, Justin, there is no slowdown. It's just a matter of specific quarter timing of COD of projects. If you remember, last year in December, we connected two projects, and then if you compare quarter by quarter, then you might see some We have some different growth numbers based on the guidance for the year, but if you look at the first nine months of the year, you see almost 50% growth in revenues without considering sunlight also in the EBITDA, and we, in general, look at the overall growth of the company on an annual basis, and there is no spread. Specific magnitude for the – for specific water from our perspective.

Justin Clare, Analyst — ROTH Capital Partners

Got it. Okay. That's helpful. And then I just wanted to touch on CO BAR. It looks like the CAPEX anticipated here is a little bit higher than what you had previously anticipated, and then EBITDA slightly lower. So just wondering if you could explain, you know, what's driving the movement there. And then just more broadly, you know, are tariffs and equipment costs contributing to any inflation across the portfolio, particularly in the U.S., or are you seeing kind of broader pricing declines kind of offsetting any effective tariffs?

Itay Banayan

You're right. I'll transfer the mic to Jared to see if you want to take on it. I just want to mention that, yes, you're right. There are slight movement, about $40 million out of a project of about $3 billion of CAPEX. So it is within the range, and the return is still very high, but I would let Jared provide more details. Jared, are you here?

Speaker 10

Yep. Yep. So, the CO-BAR project did have some changes to really the CAPEX, largely also around the allocation of tariffs. We also had some changes in allocation to how the IPC and PPC adjusts across the five projects. As you know, CO-BAR has five different projects, and so you do see some movement as the project is being fine-tuned. This process of fine-tuning a project can also improve returns, as we've seen previously with our Snowflake project. It had kind of an opposite phenomenon where we actually saw some increases on the returns over the fine-tuning process when you're going from late-stage development into start of construction.

Justin Clare, Analyst — ROTH Capital Partners

Got it.

Speaker 10

Okay. I appreciate it. Thank you.

Speaker 11

Thank you, Justin.

Operator

Thank you. Our next question comes from the line of Chris Sutter. of Truist. Your line is open, Chris.

Chris Sutter, Analyst — Truist

Hey, thanks for taking my questions here. Maybe just to start on the electricity trading, like what is baked in for the remainder of the guidance this year, and how should we think about the durability of the growth that we've seen there? Is that something that we can continue to expand in 2027? Are we starting to reach kind of levels that you think is like a consistent run rate on a Any color there would be helpful.

Adi Leviatan, CEO

Thank you, Chris. This is Adi. This activity in Israel, primarily at this point, is activity in which we are adding and expanding the profitability of our projects in Israel to include an element of trading on top of the existing projects. And as we've been very successful in this, we've also started to trade on electricity that is manufactured by other producers in Israel. This has been going – it has exceeded our expectations, and therefore, in this specific quarter, it is – the revenues from this activity are higher than what was initially in our goal. Specifically, as we relate to Q4, there is an element of seasonality in these revenues, because in Israel, I mean, the vast majority of the renewables are coming from solar irradiation, and seasonally in Q4, there is less irradiance and less electricity that is being produced, And the demand is also lower in Q4. We don't have a very tough winter in Israel. For us, actually, the demand for electricity comes more in the summer with air conditioning on the cooling side and not on the heating side in winter. So that's the nature of that business.

Itay Banayan

Chris, we didn't provide the breakdown in the guidance for what will be the revenues from the trading activity in Q4, but it is expected to be lower than Q3. For the first time, we provided a paragraph in the earning release on the amount of the revenues during the year and in the last quarter, And also with the notion that the trading activity has relatively lower margins, but also very low risk, almost no G&A associated with it. It is expanding our overall returns on our assets, and it's another line of business that we like and is expanding.

Chris Sutter, Analyst — Truist

Yeah, no, great to hear about, you know, kind of low capital opportunities to do some of the returns. Can you provide maybe just a bit more color on the Blackwater project in Virginia, like anticipated timing for that one, further steps to get that into the mature portfolio? And then you reference a doubling opportunity. Is that more storage, more solar or both? And then maybe just kind of broader data center customer conversations. What are you seeing from a contracting perspective, you know, pricing, tenor, you know, credit protections that you guys are looking for? That'd be helpful. Thanks.

Adi Leviatan, CEO

Thanks for the question. We'd love to talk about Blackwater. I will turn the line over to Jared, and then I'll come back to talk about the offtake for data centers and conversations with potential customers. Jared?

Speaker 10

Yeah, absolutely. So Blackwater is scheduled today to have COD in 2030. It is a large project, and the specifics of building large projects in Virginia, you have to go through it in a very particular and very deliberate way. And so we expect the construction timing for Blackwater to be between 24 and 28 months on the heavy construction side. We are advancing through our state permits, which are really more of process-driven permits. And so we expect the Blackwater project to be starting construction sometime in 2027. With that, Blackwater is a very attractive option for many large load customers. As you may have seen, PJM has been going back and forth with Berk on getting their large load, bring your own generation scheme really put in place. And so we are square in the middle of having a project that has capacity, both on the solar and on the battery side, that will be attractive for these large load customers. You mentioned the capacity and the ability to expand. So we have the 500 megawatts AC of the solar that we have with our current interconnection. We also have capacity to increase and to add energy storage. That energy storage addition is an important component of increasing the ELCC and the capacity component of this project to make it more attractive for some of these large-load customers.

Speaker 11

If that's 2030 – Oh, sorry.

Chris Sutter, Analyst — Truist

Go ahead. Sorry, if that one's 2030, is that safe harbored, or is that – It is. It is safe harbored.

Speaker 10

That is correct.

Adi Leviatan, CEO

I will just refer also to another part of your question, which was about potential customers' offtake of the compute capacity in these data center developments. It is that we're having conversations across our geographies with potential customers, but we're not at a point in time where we can talk specifically about the offtake for Blackwater. Just what Jared relayed, which is that this capacity accreditation provides in PJM the ability to apply for a large load request against this capacity accreditation. And this large load request could be used then by a data center development. That, at this point, is what we can say.

Speaker 11

Thank you.

Operator

Our next question comes from the line of John Windham of UBS. Please go ahead, John.

John Windham, Analyst — UBS

Perfect. Thanks for taking the questions. I just had a quick one on Rustic Hills and Jimstone, which I think are Indiana and Michigan. And my understanding is those largely already had regulatory approvals. Can you talk at all about the status of the land? Is that under your control? Is there some timeline you have to move forward or you lose control of the land? So I guess that's the first half. And the second half is just what expectations should investors have on timeline for updates on new offtakers for those sites? Thanks so much.

Adi Leviatan, CEO

Jared, will you take that?

Speaker 10

Absolutely. So for both Rustic Hills and Gemstone, we have 100% control of the land in varying forms. Rustic Hills, we own the land, and on Gemstone, we own portions of the land and are still under contract for options and other full site control of both projects. And so there's no issue of either project not having site control of the necessary land for the projects. On the PPA and offtake side, we are, you know, as mentioned, we are back in the market. We appreciate working with our previous counting parties. It was something that we always take very near to our heart to make sure that we are working in good faith as much as possible with our previous kind of parties. We will come back at some point either through the end of the year or into the first part of next year on what our offtake plans are for both of those projects. We are having fairly advanced conversations with potential customers on those projects as they are very needed and attractive options in those markets. There is insatiable demand in the PGN and MISO markets for capacity and the value that these projects can bring, so we are having advanced conversations with both of those projects.

Speaker 11

Great. Appreciate the answer.

Operator

Thank you. Our next question comes from the line of Corinne Blanchard of Deutsche Bank. Please go ahead, Corinne.

Corinne Blanchard, Analyst — Deutsche Bank

All right. Thank you. Good morning, everyone. Two questions. Maybe the first one on U.S. policy. Can you share your view on the S-232 that came out about two or three months ago and maybe the changes you have seen since then and how do you want to navigate that environment? And then the second question would be just maybe data center again and coming back, but how do you view the portfolio? I think in some of the region we're starting to see some pushback from some local community, et cetera. Does that change how you're going to approach your overall portfolio balance with the data center strategy?

Adi Leviatan, CEO

Jared, would you take 232, and then I'll come back for data centers after you?

Speaker 10

Yeah.

Speaker 11

Yeah. So, we've seen from

Speaker 10

232, our near-term impacts on projects that are in construction in 2027 and 2028, we are not impacted. So, all of our projects that are scheduled to COD And so these projects were already contracted. Cells and modules were already in the country. Same with Crimson Orchard, same with Country Acres. All of those projects were already contracted and cells and everything were in the country. For our future projects, so we have other projects that we are on the cusp of, we are working with domestic suppliers to have minimal to no impact on those projects as well. When we look to projects beyond 2028, we will see that our scale of the projects that we have will help us to have a strategic advantage as we look to our domestic supply. We're in conversations with multiple domestic cell and module manufacturers, and so our scale, size, and also portfolio will help us to minimize this impact as much as we can. And there will be some impact to costs as costs will go up. We've seen there be a shift in the PPA prices for those projects that we are still negotiating price, that there is an increase to the PPA rates due to 232. So most, if not all, of this impact will be borne in those increased PPA prices.

Adi Leviatan, CEO

And just to complement that, the rest of your question, Corrine, in the data center development, we actually, of course, we do have the United States that you were referring to, the local opposition coming from certain counties. We are also developing data center projects in Israel and in parts of Europe. And it is in those parts of Israel and Europe, we see less of the opposition that we see also in certain counties in the U.S. In the U.S., our team, the Cleanera team, led by Jared, of course, has actually been doing a tremendous amount of work in counties where we are, have been developing generation and storage projects and have been connecting them and operating them, have been doing tremendous work in maintaining excellent relationships with the local communities. And thanks to that very grassroots, local, intense work, we do see opportunities also in the U.S., and we are advancing them at a quite good pace, which we will be able to share with you down the road.

Speaker 10

And, Adi, if I can, one other piece to that is we are obviously aware of, you know, public sentiment and where these data centers sit, and we are going about it in the EnLythe and Clinera way. We are developing both our generation and data center projects within the community, full transparency, making sure that we are doing it in such a way where there is a community good to all the projects. While there is difficulty in some areas getting a permit, that is not the primary reason why projects are not moving forward. The primary reason why projects may not move forward is power. And that is where we are focusing on is power. They need the power to be able to move forward. And so our projects are a catalyst to allow projects both on the data center and other large customers to move forward with their advancements.

Corinne Blanchard, Analyst — Deutsche Bank

All right. Thank you. Do you mind if I squeeze one more question? Sure. Go ahead. Maybe can you talk actually about, again, U.S. market, but can you talk about your view on the midterm elections? We're right in the middle of it, obviously. Do you expect any significant changes in terms of policy, you know, either through further support for the 45X credit, or do you actually also expect any changes on the data center, maybe like, you know, more support or like a shift towards something else?

Adi Leviatan, CEO

Thank you. So, I mean, historically, we have, in Light and Cleanera, we have been delivering and continuing to advance and connect renewable energy projects across all administrations, across, you know, different states. Obviously, midterm elections are today. We don't have much knowledge on the direction that they will be going, but we have been able to be successful across administrations. Jared, would you like to add to that?

Speaker 10

Yes. I mean, such is the question when your earnings report is also on election day. So, yes. What we've also seen is I think no matter who is in power on the governmental side, we have a need for power in this country. That is our focus. We have a need for power that is It's sustainably delivered at an affordable cost. That is our mission, and we believe that that mission will, red or blue, will still be something that the country needs. And so we will continue to march down that sustainable, renewable, affordable path of creating more power for the country.

Speaker 11

Great. Thank you so much, Guy.

Operator

Thank you. I would now like to turn the conference back to Adi Leviathan for closing remarks. Madam?

Adi Leviatan, CEO

Thank you, and thank you, everyone, for joining us for our Q3 2026 earnings release and investor presentation. We know and hope that you will join us also in the next quarter when we conclude the year of 2026. Thanks. Thank you so much for joining us, and we look forward to seeing you in our coming call.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.