Kenon Holdings Ltd.'s subsidiary OPC Energy Ltd. has announced the commencement by OPC's subsidiary CPV Group LP of construction of a solar power project with a capacity of 170 MW in Maryland, United States, in the PJM market, also called the Backbone project. An Engineering, Procurement and Construction contract has been signed with the Project's contractor. With the commencement of the Project's construction, CPV Group's renewable energy activity is comprised of approximately 230 MW of operational wind projects, approximately 400 MW of solar projects in construction, and approximately 3 GW of projects in development.

The Project is located on a former coal mine and is therefore eligible for tax benefits under the IRA legislation, and when built is expected to be the solar project in western Maryland. The Project's overall cost is estimated to be $330 million ($277 million net of the estimated development fee payable to CPV Group). CPV Group intends to enter into an investment agreement with a tax equity partner for approximately 40% of the cost of the Project and to take advantage of tax benefits available for the Project (subject to regulatory arrangements), such that the net investment cost for CPV Group is estimated to be approximately $150 million.

In addition, CPV Group is working to obtain a short term revolving financing facility for part of the remainder of the Project cost. The Project's commercial operation date, subject to completion of construction, is expected to be in the third quarter of 2025. CPV Group intends to purchase the solar panels for the Project through its existing framework agreement for the acquisition of solar panels.

The Project has entered into a power purchase agreement ("PPA") with a global e-commerce company for 90% of the electricity to be produced for a period of 10 years from the Project's commercial operation date. This will be the second PPA executed with the same global e-commerce company.