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Financial Instruments
 12 Months Ended
Dec. 31, 2021
Disclosure of detailed information about financial instruments [abstract]  
Financial Instruments
Note 21 - Financial Instruments
 
  A.
Overview
 
The Company has exposure to the following risks from its use of financial instruments:
 
  ●
Credit risk
  ●
Liquidity risk
  ●
Market risk
 
This note presents quantitative and qualitative information about the Company’s exposure to each of the above risks, and the Company’s objectives, policies and processes for measuring and managing risk.
 
In order to manage these risks and as described hereunder, the Company executes transactions in derivative financial instruments. Presented hereunder is the composition of the derivatives:
 
   
For the year ended December
  
   
2021
    
2020
  
   
€ in thousands
  
Derivatives presented under current assets
            
Currency swap
     639       12  
Forward contracts
     -       66  
      639       78  
                 
Derivatives presented under non-current assets
                
Financial power swap
     -       10,238  
Currency swap
     2,635       -  
      2,635       10,238  
                 
Derivatives presented under current liabilities
                
Swap contracts
     (3,431
)
     (1,378
)
Financial power swap
     (11,352
)
     -  
      (14,783
)
     (1,378
)
                 
Derivatives presented under non-current liabilities
                
Financial power swap
     (9,542
)
     -  
Currency swap
     -       (144
)
Swap contracts
     (565
)
     (8,192
)
      (10,107
)
     (8,336
)
 
The following table sets forth the details of the Company’s Forward and SWAP contracts with banking institutions:

 

   
December 31, 2021
  
   
Currency/
linkage/interest rate
receivable
    
Currency/
Linkage/interest rate
Payable
    
Date of expiration
    
Fair value - € in
thousand
  
                         
Euro 17.6 million interest swap transaction for a period of 18 years, semi-annually.
    
Euribor 6 months
      
Fixed 1%
      
December 20, 2037
       (706 )
The principal of the interest rate swap transaction is based on a pre-determined sculptured repayment schedule in the maximum amount of Euro 131 million. Following the refinance of Talasol Project, there were unwinding of the interest rate SWAP in an amount of €3,290 thousand.
    
Euribor 6 months
      
Fixed 0.9412%
      
September 30, 2031
       (3,290 )
NIS 100 million currency swap transaction Euro/NIS for a period of 4 years, semi-annually.
    
NIS
       Euro      
June 2025
       3,274  
Financial power swap- Electricity price swap fixed for float
    
Electricity price in Spain
      
Fixed price
      
September 30, 2030
       (20,894 )
 
  B.
Risk management framework
 
The Company's management and board of directors have overall responsibility for the establishment and oversight of the Company’s risk management framework.
 
The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management of standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.
 
The Company Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
 

 

  C.
Credit Risk
 
As at December 31, 2021, the Company does not have any significant concentration of credit risk.
 
Cash and short-term deposits
As at December 31, 2021 and 2020, the Company had cash and cash equivalents in the amount of €41,229 thousand and €66,845 thousand, respectively. The Company’s cash and cash equivalents are deposited with financial institutions that received a credit rating (international rating scale). See also Note 4.
 
Marketable securities
As at December 31, 2021 and 2020, the Company invested in a traded Bond in an amount of €1,946 thousand and €1,761 thousand, respectively, with the intention to maintain the value of its liquid resources. See also Note 5.
 
Restricted cash
As at December 31, 2021 and 2020, the Company had a balance of current restricted cash in an amount of €1,000 thousand and €0 thousand, respectively, and a balance of non-current restricted cash of €15,630 thousand and €9,931 thousand, respectively. See also Note 5.
 
Trade and other receivables
As at December 31, 2021 and 2020, the Company had a balance of trade receivables of €598 thousand and €382 thousand, respectively. This balance mainly refers to the balance from the IEC for the PV Plant located in Israel and is due in 30 days. It is also referring to NEXUS or GNERA that represent the PV Plants located in Spain in their dealings with the Spanish National Energy Commission, and are due within 60 days from issuance and trade receivables from Gas sold in market price in The Netherland due within 30 days from issuance.
 
As at December 31, 2021 and 2020, the Company had a balance of revenue receivables of €3,794 thousand and €3,420 thousand, respectively. This balance refers to amounts to be paid from several entities. In Spain, the amounts to be paid are from NEXUS or GNERA that represent the PV Plants located in Spain in its dealings with the Spanish National Energy Commission. To the extent the facility is eligible to receive incentives (such as the Company’s four Spanish PV facilities that commenced operations prior to 2020), the incentives (consisting of an investment retribution and operational retribution) are paid on a monthly basis (commencing January) based on varying percentages of the accumulated incentives from the beginning of the fiscal year, provided that the entire amount of the incentives is required to be paid to the eligible entity by the end of June of the following fiscal year. In the Netherlands, the amounts to be paid are from Enterprise Agency that is responsible to pay the amount of subsidy for the Biogas installations in the Netherlands. The incentives are paid through equal monthly installments based on the effective production of the previous year for each plant, or if not available, on the basis of the regional forecast. The balance is paid within the end of June of the subsequent year.
 
The Company’s management closely monitors the economic and political environment in which it operates. As per the Company's management estimations there are no significant credit risks assigned to the trade receivables and income receivables as these amounts are due by governmental agencies.
 
As at December 31, 2021 and 2020, the Company had a balance of government authorities' receivables of €1,602 thousand and €3,232 thousand, respectively. This balance refers to VAT and withholding tax receivables in Spain, Italy, Israel and the Netherlands.

 

  D.
Liquidity risk
 
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
 
The cash surpluses held by Company that are not required for financing their current activity, are invested in interest-bearing investment channels such as: short-term deposits and marketable securities. These investment channels are chosen by the Company’ managements based on future forecasts of the cash the Company will require in order to meet their liabilities.
 
Cash flow forecasts are determined on both an individual company basis and a consolidated basis. The Company examines current forecasts of its liquidity requirements so as to make certain that there is sufficient cash for its operating needs, and it is careful at all times to have enough unused credit facilities so that the Company does not exceed its credit limits and is in compliance with its financial covenants. These forecasts take into consideration matters such as the Company’s plan to use debt for financing its activity, compliance with required financial covenants, compliance with certain liquidity ratios, and compliance with external requirements such as laws or regulation.
 
The Company has contractual commitments due to debentures issued, financing agreements and EPC and O&M agreements of its subsidiaries in Spain and in Israel. See also Note 6, Note 11 and Note 12.
 
The following are the contractual maturities of financial liabilities at undiscounted amounts and based on the spot rates at the reporting date, including estimated interest payments. This disclosure excludes the impact of netting agreements:
 
   
December 31, 2021
  
   
Carrying
    
Contractual
    
Less than
                
More than
  
   
amount
    
cash flows
    
1 year
    
2 years
    
3-5 years
    
5 years
  
   
€ in thousands
  
Non-derivative financial liabilities
                                    
                                     
Long term loans, including current maturities
     218,895       240,038       147,127       20,671       18,347       53,892  
                                                 
Debentures
     137,299       150,116       24,244       66,481       59,391       -  
                                                 
Lease liabilities
     20,129       25,825       4,832       2,244       2,201       16,548  
                                                 
Trade payables and other accounts payable
     22,058       22,058       22,058       -       -       -  
      398,381       438,037       198,261       89,396       79,939       70,440  
                                                 
Derivative finance liabilities
                                                
                                                 
Financial power swap
     20,894       20,894       11,352       14,079       1,961       (6,498
)
                                                 
Swap contracts
     3,996       3,996       3,431       234       157       174  
      24,890       24,890       14,783       14,313       2,118       (6,324
)
 
   
December 31, 2020
  
   
Carrying
    
Contractual
    
Less than
                
More than
  
   
amount
    
cash flows
    
1 year
    
2 years
    
3-5 years
    
5 years
  
   
€ in thousands
  
Non-derivative financial liabilities
                                    
                                     
Long term loans, including current maturities
     198,169       263,112       20,896       34,645       32,594       174,977  
                                                 
Debentures
     82,724       91,431       13,502       33,368       44,561       -  
                                                 
Lease liabilities
     17,789       28,910       1,051       1,941       1,799       24,119  
                                                 
Trade payables and other accounts payable
     13,706       13,706       13,706       -       -       -  
      312,388       397,159       49,155       69,954       78,954       199,096  
                                                 
Derivative finance liabilities
                                                
                                                 
Currency swap
     132       132       (12
)
     63       81       -  
                                                 
Swap contracts
     9,570       9,570       1,378       2,490       2,109       3,593  
      9,702       9,702       1,366       2,553       2,190       3,593  

 

  E.
Market risk
 
Market risk is the risk that changes in market prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
 
The principal risks that the Company faces, as assessed by management, are as follows: a change in the regulation applicable to the area of activity, a change in the tariffs as approved by the relevant electricity authorities in the countries in which the Company operates, changes in the situation of the electricity and gas market, political and security events.
 
The Company uses hedging instruments in an attempt to manage interest rate, currency and other market-related risks. The majority of the Company's derivative contracts are OTC derivatives, i.e., derivative contracts that are not transacted on an exchange. These derivatives are entered into under ISDA Master Agreements. If counterparty defaults on these contracts, the underlying exposure would no longer be effectively hedged, which could result in losses. Disruptions such as market crises and economic recessions may put a strain on the availability and effectiveness of hedging instruments. For example, although the Company estimates the expected transition away from Libor and Euribor, as addressed by the Amendments to IAS 39, Financial Instruments, Interest Rate Benchmark Reform – Phase 2, not to have a material effect on the Company's financial statements, similar benchmark rates may have a different impact on the hedged item and the hedging instrument, which could cause some of the Company hedge to become ineffective, resulting in potential losses.
 
  (1)
Foreign currency risk
 
As a result of the Company’s operations and presentation currency, the Company is exposed to the impact of exchange rate fluctuations of the Euro/USD and NIS/Euro on the Company’s balance sheet and profit and loss.
 
In order to manage the currency risk resulting from the Series B Debentures, which are denominated in NIS, the Company executed currency swap transactions in April 2017. The Company exchanged Series B Debentures NIS denominated notional principal in the aggregate amount of NIS 83,232 thousand with a euro notional principal. Such currency swap transactions qualified for hedge accounting. Following the repayment of the Series B Debentures, the Company realized the currency swap in the amount of €246 thousand.
 
In order to manage the currency risk resulting from the Series C Debentures, which are denominated in NIS, the Company executed currency swap transactions in March 2021. The Company exchanged Series C Debentures NIS denominated notional principal in the aggregate amount of NIS 100,000 thousand with a euro notional principal. Such currency swap transactions qualify for hedge accounting.
 
  (a)
The exposure to linkage and foreign currency risk
 
The Company's exposure to linkage and foreign currency risk was as follow:
 
   
December 31, 2021
  
   
Non-monetary/ Non finance
    
 
NIS(*)
    
 
Unlinked
    
 
EURO
    
 
Total
  
   
€ in thousands
  
                               
Current assets:
                              
Cash and cash equivalents
     -       30,405       1,090       9,734       41,229  
Marketable securities
     -       -       1,946       -       1,946  
Short term deposits
     -       28,410       -       -       28,410  
Restricted cash
     -       -       -       1,000       1,000  
Receivable from concession project
     -       1,784       -       -       1,784  
Trade and other receivables
     1,020       739       -       7,728       9,487  
Non-current assets:
                                        
Investments in equity accounted investees
     25,534       8,495       -       -       34,029  
Advances on account of investments
     1,554       -       -       -       1,554  
Receivable from concession project
     -       26,909       -       -       26,909  
Fixed assets
     340,065       -       -       -       340,065  
Right-of-use asset
     23,367       -       -       -       23,367  
Intangible asset
     4,762       -       -       -       4,762  
Restricted cash and deposits
     -       6,630       -       9,000       15,630  
Deferred tax
     12,952       -       -       -       12,952  
Long term receivables
     1,928       1,272       -       2,188       5,388  
Derivatives
     -       -       -       2,635       2,635  
Current liabilities:
                                        
Current maturities of long term bank loans
     -       (2,024
)
     -       (124,156
)
     (126,180
)
Current maturities of long term loans
     -       -       -       (16,401
)
     (16,401
)
Current maturities of debentures
     -       (19,806
)
     -       -       (19,806
)
Trade payables
     -       (218
)
     -       (2,686
)
     (2,904
)
Other payables
     -       (6,882
)
     (527
)
     (13,397
)
     (20,806
)
Current maturities of derivatives
     -       -       -       (14,783
)
     (14,783
)
Current maturities of lease liabilities
             (3,782
)
     -       (547
)
     (4,329
)
Non-current liabilities:
                                        
Long-term lease liabilities
     -       (5,154
)
     -       (10,646
)
     (15,800
)
Long-term loans
     -       (15,803
)
     -       (23,290
)
     (39,093
)
Other long-term bank loans
     -       (6,898
)
     -       (30,323
)
     (37,221
)
Debentures
     -       (117,493
)
     -       -       (117,493
)
Deferred tax
     (8,836
)
     -       -       -       (8,836
)
Derivatives
     -       -       -       (10,107
)
     (10,107
)
Other long-term liabilities
     -       (3,905
)
     -       -       (3,905
)
Total exposure in statement
                                        
of financial position in
                                        
respect of financial assets
                                        
and financial liabilities
     402,346       (77,321
)
     2,509       (214,051
)
     113,483  
 
(*) Including items linked to the Israeli CPI
 
   
December 31, 2020
  
   
Non-monetary/ Non finance
    
 
NIS(*)
    
 
Unlinked
    
 
EURO
    
 
Total
  
   
€ in thousands
  
                               
Current assets:
                              
Cash and cash equivalents
     -       50,195       952       15,698       66,845  
Marketable securities
     -       -       1,761       -       1,761  
Short term deposits
     -       8,113       -       -       8,113  
Restricted cash
     -       1,491       -       -       1,491  
Receivable from concession project
     380       3,155       384       5,906       9,825  
Non-current assets:
                                        
Investments in equity accounted investees
     23,489       8,745       -       -       32,234  
Advances on account of investments
     2,423       -       -       -       2,423  
Receivable from concession project
     -       25,036       -       -       25,036  
Fixed assets
     264,095       -       -       -       264,095  
Right-of-use asset
     17,209       -       -       -       17,209  
Intangible asset
     4,604       -       -       -       4,604  
Restricted cash and deposits
     -       5,882       -       4,049       9,931  
Deferred tax
     3,605       -       -       -       3,605  
Long term receivables
     2,593       30       -       139       2,762  
Derivatives
     -       -       -       10,238       10,238  
Current liabilities:
                                        
Current maturities of long term bank loans
     -       (1,762
)
     -       (8,470
)
     (10,232
)
Current maturities of long term loans
     -       -       -       (4,021
)
     (4,021
)
Current maturities of debentures
     -       (10,600
)
     -       -       (10,600
)
Trade payables
     -       (221
)
     -       (12,166
)
     (12,387
)
Other payables
     -       (974
)
     (666
)
     (1,953
)
     (3,593
)
Current maturities of derivatives
     -       -       -       (1,378
)
     (1,378
)
Current maturities of lease liabilities
     -       (77
)
     -       (413
)
     (490
)
Non-current liabilities:
                                        
Long-term lease liabilities
     -       (1,436
)
     -       (15,863
)
     (17,299
)
Long-term loans
     -       (15,520
)
     -       (119,000
)
     (134,520
)
Other long-term bank loans
     -       (5,102
)
     -       (44,294
)
     (49,396
)
Debentures
     -       (72,124
)
     -       -       (72,124
)
Deferred tax
     (7,806
)
     -       -       -       (7,806
)
Derivatives
     -       -       -       (8,336
)
     (8,336
)
Other long-term liabilities
     -       (2,478
)
     (486
)
     -       (2,964
)
Total exposure in statement
                                        
of financial position in
                                        
respect of financial assets
                                        
and financial liabilities
     310,592       (7,647
)
     1,945       (179,864
)
     125,026  
 
(*) Including items linked to CPI
Information regarding significant exchange rates:
 
   
For the year ended December 31
  
   
Rate of
          
Rate of
        
   
Change
          
Change
        
   
%
    
Dollar
    
%
    
NIS
  
1 Euro in 2021
     (7.7
)
     1.132       (10.8
)
     3.520  
1 Euro in 2020
     9.3       1.227       1.7       3.944  
 
  (b)
Sensitivity analysis
 
A change as at December 31 in the exchange rates of the following euro against the USD and euro against the NIS, as indicated below would have increased (decreased) equity by the amounts shown below (after tax). This analysis is based on foreign currency exchange rate that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other variables, in particular interest rates, remain constant.
 
   
December 31, 2021
  
   
Increase
    
Decrease
  
   
Equity
    
Equity
  
   
€ thousands
  
Change in the exchange rate of:
            
5% in the USD
     111       (111
)
5% in NIS
     (1,098
)
     1,098  
 
   
December 31, 2020
  
   
Increase
    
Increase
  
   
Equity
    
Equity
  
   
€ thousands
  
Change in the exchange rate of:
            
5% in the USD
     79       (79
)
5% in NIS
     290       (290
)
 
  (2)
Interest rate risk
 
The Company is exposed to changes in fair value, as a result of changes in interest rate in connection with its loans and borrowings. The debt instruments of the Company bear interest at variable rates.
 
The Company entered into various project finance agreements that are based on EURIBOR rate and therefore it may be affected by adverse movements in interest rates. The Company utilizes interest rate swap derivatives to convert certain floating-rate debt to fixed-rate debt. The Company’s interest rate swap derivatives involve an agreement to pay a fixed-rate interest and receive a floating-rate interest, at specified intervals, calculated on an agreed notional amount that matches the amount of the original loan and paid on the same installments and maturity dates.
 
Sensitivity analysis
 
A change in interest rate would have increased (decreased) profit or loss by the amounts shown below:
 
   
December 31,
  
   
2021
    
2020
  
   
Profit or loss
    
Profit or loss
  
   
€ in thousands
  
Increase of 1%
     2,446       803  
Increase of 3%
     7,368       2,444  
Decrease of 1%
     (2,474
)
     (836
)
Decrease of 3%
     (7,396
)
     (2,477
)
 
  (3)
Electricity market prices risk
 
As a result of the Company’s operations in the electricity market, the Company is exposed to the impact of changes in the electricity prices.
 
In June 2018, Talasol executed the PPA. The power produced by the Talasol Project is expected to be sold by Talasol in the open market for the then current market power price and the PPA is expected to hedge the risks associated with fluctuating electricity market prices by allowing Talasol to secure a certain level of income for the power production included under the PPA. The hedge transaction becomes effective on Talasol requesting that the counter party will fix the fixed price pursuant to the price adjustment mechanism. The PPA became effective in March 2019.
 
The fair value of the PPA is measured by discounting the future fixed and assessed cash flows, over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks. The future prices are assessed the electricity field.
 
  F.
Fair value
 
  (1)
Fair values versus carrying amounts
 
The carrying amounts of certain financial assets and liabilities, including cash and cash equivalents, other accounts receivables, pledged deposits, financial derivatives credit from banks and trade payables and other accounts payables are the same or proximate to their fair value.
 
The fair values of the other financial liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:
 
   
December 31, 2021
         
Fair value
        
   
Carrying
                    
Valuation techniques for
  
Inputs used to
   
amount
    
Level 1
    
Level 2
    
Level 3
  
determining fair value
  
determine fair value
   
€ in thousands
        
Non-current liabilities:
                              
Debentures
     137,299       140,293       -       -        
Loans from banks and others (including current maturities)
     218,895       -       223,287       -  
Discounting future cash flows by the market interest rate on the date of measurement.
  
Discount rate of Euribor+ 1.76%- 2.75% with a zero floor, Euribor+ 5.27%, fix rate for 5 years 2.9%-3.55% and 4.65% Linkage to Consumer price index in Israel
                                       
      356,194       140,293       223,287       -        
 
   
December 31, 2020
         
Fair value
        
   
Carrying
                    
Valuation techniques for
  
Inputs used to
   
amount
    
Level 1
    
Level 2
    
Level 3
  
determining fair value
  
determine fair value
   
€ in thousands
        
Non-current liabilities:
                              
Debentures
     82,724       84,814       -       -        
Loans from banks and others (including current maturities)
     198,169       -       209,005       -  
Discounting future cash flows by the market interest rate on the date of measurement.
  
Discount rate of Euribor+ 2.53%, fix rate for 5 years 2.9%-3.1% and 4.65% Linkage to Consumer price index in Israel
                                       
      280,893       84,814       209,005       -        
 
  F.
Fair value (cont’d)
 
  (2)
Interest rates used for determining fair value
 
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread, and were as follows:
 
 
December 31
 
2021
  
2020
 
%
Non-current liabilities:
      
Loans from banks
Euribor+ 1.76%- 2.75% with a zero floor
  
Euribor+ 1.76%- 2.75% with a zero floor
Loans from banks
4.65% Linkage to Consumer price index in Israel
  
4.65% Linkage to Consumer price index in Israel
Loans from banks
fix rate for 5 years 2.9% - 3.55%
  
fix rate for 5 years 2.9% - 3.55%
Loans from others
Euribor+ 5.27%
  
Euribor+ 5.27%
Loans from others
7% Linkage to Consumer price index in Israel and fixed rate of 5.5%
  
3%
 
  (3)
Fair values hierarchy
 
The financial instruments presented at fair value are grouped into classes with similar characteristics using the following fair value hierarchy which is determined based on the source of data used in the measurement:
 
Level 1
-
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
-
Inputs other than quoted prices included within Level 1 that are observable either directly or indirectly.
Level 3
-
Inputs that are not based on observable market data (unobservable inputs).

 

   
December 31, 2021
   
Level 1
    
Level 2
    
Level 3
    
Total
  
Valuation techniques for
   
€ in thousands
  
determining fair value
Marketable securities
     1,946       -       -       1,946  
Market price
Swap contracts
     -       (3,996
)
     -       (3,996
)
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Currency swap
     -       3,274       -       3,274  
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Dori Energy loan
     -       -       8,495       8,495  
The fair value is measured by discounting the expected future loan repayments and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. The discounting rate was estimated at approximately 10% and the expected yearly change of Israeli Consumer Price Index, during the expected lifetime of the loan, was estimated at approximately 1%.
Financial power swap
     -       -       (20,894
)
     (20,894
)
Fair value is measured by discounting the future fixed and assessed cash flows, over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks.

 

   
December 31, 2020
   
Level 1
    
Level 2
    
Level 3
    
Total
  
Valuation techniques for
   
€ in thousands
  
determining fair value
Marketable securities
    
1,761
      
-
      
-
      
1,761
  
Market price
Forward contracts
    
-
      
66
 
    
-
      
66
 
Fair value measured on the basis of discounting the difference between the forward price in the contract and the current forward price for the residual period until redemption using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Swap contracts
    
-
      
(9,570
)
    
-
      
(9,570
)
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Currency swap
    
-
      
(132
 )    
-
      
(132
 )
Fair value is measured by discounting the future cash flows, over the period of the contract and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks.
Dori Energy loan
    
-
      
-
      
8,745
      
8,745
  
The fair value is measured by discounting the expected future loan repayments and using market interest rates appropriate for similar instruments, including the adjustment required for the parties’ credit risks. The discounting rate was estimated at approximately 10% and the expected yearly change of Israeli Consumer Price Index, during the expected lifetime of the loan, was estimated at approximately 1%.
Financial power swap
    
-
      
-
      
10,238
      
10,238
  
Fair value is measured by discounting the future fixed and assessed cash flows, over the period of the contract and using market interest rates appropriate for similar instruments. The value is adjusted for the parties’ credit risks.

 

 
(4)
Level 3 financial instruments carried at fair value
 
The table hereunder presents reconciliation from the beginning balance to the ending balance of financial instruments carried at fair value in level 3 of the fair value hierarchy:
 
   
Financial assets
  
   
Dori Energy loan
  
   
€ in thousands
  
       
Balance as at December 31, 2019
     10,595  
         
Total income recognized in profit or loss
     758  
Repayment
     (2,378
)
Foreign Currency translation adjustments
     (230
)
         
Balance as at December 31, 2020
     8,745  
         
Total income recognized in profit or loss
     799  
Grant of loan
     335  
Repayment
     (2,259
)
Foreign Currency translation adjustments
     875  
         
Balance as at December 31, 2021
    
8,495
  
 
   
Financial assets
  
   
Financial power swap
  
   
€ in thousands
  
       
Balance as at December 31, 2019
     4,967  
         
Total income recognized in other comprehensive income
     5,271  
         
Balance as at December 31, 2020
     10,238  
         
Total income is recognized in other comprehensive income
     (31,132 )
         
Balance as at December 31, 2021
    
(20,894
)