OPC Energy: Can Hadera 2 and Ramat Beka Advance Without Erasing the Leverage Improvement

What This Follow-up Isolates

The main article already established the broad picture: OPC enters 2026 with a cleaner balance sheet, with adjusted leverage down to 2.9x from 5.2x and cash and cash equivalents up to NIS 2.913 billion from NIS 962 million. This follow-up isolates only the Israel funding leg of that story: can Hadera 2 and Ramat Beka move from advanced development into execution without consuming the balance-sheet relief that 2025 created.

That is a separate question from the broader U.S. funding load because the two Israel projects have very different financing logic. In Ramat Beka, the first real red flag is not the solar equipment bill or the EPC package. It is the land payment. In Hadera 2, the first issue is not only project size, but the timing of financial close and the direct economic cost of delay. Anyone reading these as just two more names inside the development pipeline is missing the point.

There is also an important framing issue here. In both the annual report and the presentation, the two projects are classified as advanced-development projects. But under the company's own definitions, that still means a stage where regulatory approvals, grid connection, commercial agreements, and financing agreements remain outstanding before construction begins. In other words, advanced development is progress, not funded execution.

• Cash rose sharply, but not all of it is truly free.
• Ramat Beka can trigger a large cash call around final approval and land long before full construction gets underway.
• In Hadera 2, delay in financial close does not only hurt timing. It also reduces the capacity tariff.
• Intel is still one step earlier, which makes it a strategic option rather than the immediate funding test.

This is the right starting chart because it separates balance-sheet improvement from the source of that improvement. 2025 did include better operating cash generation, but above all it was a financing year. Without NIS 2.895 billion of financing inflow, the closing cash number would look very different.

Where the Leverage Improvement Came From, and How Much of It Is Really Free

The leverage improvement is real. OPC reports adjusted leverage of 2.9x at year-end 2025 versus 5.2x a year earlier, and the presentation frames that as a robust financial profile with a 53% equity ratio. But the footnotes matter here. In both the adjusted-debt discussion and the cash-flow statement, part of the improvement rests on capital markets access, not only on internally generated cash.

During 2025, OPC recorded NIS 2.057 billion of net proceeds from share issuance and another NIS 495 million from debenture issuance. Operating cash flow was NIS 1.003 billion, but investing cash flow was negative NIS 1.8 billion. Put differently, the balance-sheet improvement arrived together with new outside capital, not instead of it.

The annual report also states explicitly that the headquarters cash balance of about NIS 2.261 billion derives, among other things, from the 2025 equity raises, and that this cash is intended both to finance part of the equity required for Basin Ranch and to support continued business growth and development. That matters for Hadera 2 and Ramat Beka because it means the large cash cushion is not a clean Israel-only reserve waiting for those two projects. Part of it has already been raised against other demands.

So the right question is not whether the balance sheet improved. It did. The right question is how much of that improvement can remain intact after two very expensive Israel projects begin moving in earnest. 2025 gave OPC a bridge. It did not give it a blank check.

Two Projects, Two Funding Logics

The point of this chart is not to suggest that all of this sits on the corporate balance sheet tomorrow morning. It is the opposite. The point is to show why project finance, approval timing, and sequencing matter more here than any one leverage ratio does. Even after the 2025 balance-sheet improvement, these three projects are too large to be read as if they would be funded out of corporate liquidity alone.

Ramat Beka: The Bottleneck Is the Land Payment

The key point in Ramat Beka is not simply that the project is large. That is obvious. The important point is that the first large cash use is already clearly defined. OPC has paid the Israel Land Authority about NIS 275 million, equal to 20% of the consideration for the main land plots. The balance, about NIS 1.2 billion, is expected to be paid within 90 days of final project approval, which the company said it expected to receive in the coming weeks as of the report approval date.

That changes the way the project should be read. Instead of a project that gradually rolls from planning into execution, this is a project with a sharp cash trigger at the start. At the same time, the company had already signed a solar-panel supply agreement in December 2024, signed an EPC agreement for the substation and switching station in January 2026, and was negotiating an additional EPC package for the photovoltaic facilities in an estimated amount of about NIS 500 million. Construction financing itself was still under negotiation with Bank Hapoalim.

That means Ramat Beka is not just waiting for grid connection. It is a project where final approval is supposed to open three parallel tracks almost immediately: the remaining land payment, EPC commitments, and the financing package. If those three tracks do not close almost together, the land payment can turn into an expensive corporate bridge.

There is also a regulatory clock. Under the regulation described in the annual report, renewable facilities with integrated storage can receive tariff approval until June 1, 2027 or until a 2,000 MW quota is exhausted. That does not mean the project is on the edge of losing economic viability. It does mean the company does not have an open-ended path here. A prolonged delay can turn funding into a timing problem as well.

So if we are looking for the first risk that can eat into the leverage improvement, Ramat Beka is at the top of the list. Not because of project size alone, but because its first major cash demand arrives around land before the full financing package is shown as closed.

Hadera 2: The Price of Delay Is Written Into the Regulation

Hadera 2 is a different read. There is no land payment trigger identical to Ramat Beka, but there is another risky combination: a larger project, equipment already contracted, and a regulatory framework that prices delay.

Estimated construction cost is NIS 4.8 to 5.2 billion. The government approved NIP 20B in August 2025, and the company already signed a binding equipment supply agreement with GE representing about 20% of estimated project cost. The annual report adds that some payment dates had already occurred as of the report approval date, and the fourth-quarter cash-flow analysis explicitly ties part of the increase in Israel investments to an advance payment for Hadera 2's main equipment.

So unlike Ramat Beka, money has already started moving in Hadera 2 before financial close. At the same time, OPC is still negotiating construction financing with Bank Leumi, and it is also negotiating with Infinia for acquisition of the rights in the project land and the Hadera power-plant land for an aggregate consideration of about NIS 450 million, with no certainty that the transaction will be completed.

This may be the single most important number in this follow-up. Hadera 2 is not just a project that needs financing. It is a project where the timing of financial close feeds directly into project economics. Reaching financial close by June 2026 means a capacity tariff of 3.31 agorot for 25 years. By December 2026 that falls to 3.18 agorot. By June 2027 it is 3.05 agorot.

That means the company does not have the luxury of stretching the time between equipment ordering, financing negotiations, and land negotiations for too long. In Hadera 2, delay is not only operational inconvenience. It is built-in erosion of project terms.

That is also why Hadera 2 can advance without erasing the leverage improvement only in a fairly specific scenario: equipment, financing, and land all need to move quickly into a project-finance structure that stabilizes future cash generation. If not, the project can spend too long sitting on the corporate balance sheet as a bundle of pre-construction uses.

Why Intel Sits in a Different Bucket

It is easy to throw Intel into the same basket because it is also a large Israel power project and also part of the broader growth story. But the report and presentation make clear that it is still an early-stage development project. There is a non-binding memorandum of understanding from March 2024, negotiations are ongoing for a binding PPA with Intel, and the company estimates that construction would only begin in the second half of 2027.

That is exactly why this continuation stays focused on Hadera 2 and Ramat Beka. Intel can certainly become a meaningful capital consumer later on, but as of the report date it is not yet in the same funding-urgency bucket. Bundling all three projects into the same equation loses the crucial distinction between an immediate liquidity test and a longer-dated strategic option.

Bottom Line

The short answer is yes, but only if both projects move quickly from promise to signed financing. OPC finished 2025 in a much better place: leverage fell, cash increased, and the capital markets already showed they were willing to fund the transition stage. But that comfort is not large enough to absorb, at the same time, a roughly NIS 1.2 billion remaining land payment in Ramat Beka, equipment already ordered for Hadera 2, and a prolonged delay in both financial closes.

Ramat Beka can preserve the leverage improvement if final approval, Bank Hapoalim financing, and the land payment close almost as one package. Hadera 2 can do the same if Bank Leumi, GE, and the land question converge into an early enough financial close to avoid tariff erosion. In that scenario, 2025 will look like a smart preparation year. In a delay scenario, 2025 may look in hindsight like the year the balance sheet merely bought time.