Enlight Renewable Energy Ltd.

 

January 7, 2026

 

New Rating

 

‘ilA’ Issuer Rating Assigned, Outlook Stable;

‘ilA’ Rating Assigned To Unsecured Bonds,

‘ilA+’ Rating Assigned to Secured Private Loan

 

Primary Credit Analyst:

 

Evgeni Silishtian 972-3-7539733 evgeni.silishtian@spglobal.com

 

Secondary Contact:

 

Ayelet Matzov 972-3-7539712 ayelet.matzov@spglobal.com

 

Table of Contents

 

Rating Action Overview	2
Rating Action Rationale	3
Outlook	5
Upside Scenario	5
Downside Scenario	6
Company Description	6
Base Case Scenario	6
Liquidity	7
Covenant Analysis	7
Modifiers	8
Environmental, Social, And Governance	8
Recovery Analysis	8
Key Factors	8
Simulated Default Assumptions	8
Simplified Waterfall	9
Related Criteria And Research	10
Ratings List	11

Rating Action Overview

 

 

 

 

 

 

Rating Action Rationale

 

Enlight posted significant growth in operations in recent years, and given its backlog of projects in development and planning stages, we believe this trend will continue. At the end of Q3 2025, the Company’s income-producing projects under construction and nearing construction amounted to a production capacity of about 6.2 GW (of which about 2.5 GW in commercial operation) and a storage capacity of about 11.8 GWh (of which about 2 GWh in commercial operation), compared to about 6.1 GWh (of which about 2.5 GWh in commercial operation) and about 8.6 GWh (of which about 1.9 GWh in commercial operation) at year-end 2024. The increase in production capacity led to improved operating performance, reflected in an increase in revenue to about $430 million in the first nine months of 2025, compared to about $399 million in 2024, and an increase in adjusted EBITDA to about $300 million in this period, compared to about $283 million in 2024 as a whole.

 

In the coming years, we expect the Company to continue significantly growing its operations while increasing production capacity, supported by a backlog of projects in advanced stages of construction and development. Inter alia, we believe that the Quail Ranch and Roadrunner projects in the U.S., with an aggregate capacity of about 418 MW of production and about 1,340 MWh of storage, are expected to start commercial operation by early 2026 and contribute about $70 million - $80 million in revenue in a full year of operation (excluding tax benefits). In addition, the Snowflake A project in the U.S., with a capacity of about 600 MW of production and about 1,900 MWh of storage, is expected to start commercial operation in 2027 and contribute about $120 million - $130 million in revenue in a full year of operation (excluding tax benefits). These projects, alongside other projects the development of which was recently completed, support our assessment of Enlight's ability to successfully implement its growth strategy.

 

The substantial scope of the projects in various stages of development exposes the Company to development risks. In addition, the Company operates in an environment with increasing competition, low barriers to entry and exposure to changes in policy and regulation in some of its regions of operation. However, we estimate that the projects’ relatively short construction period and lack of engineering complexity, alongside the geographical spread of the Company’s operatoins and a revenue model largely based on long-term contracts, contribute to mitigating these risks. Enlight also benefits from a high level of control over the value chain of its operations, which includes all stages of project development, planning, financing, construction and operation. This model provides operational flexibility, cost control and value creation throughout the project’s life.

 

We believe that successful implementation of Enlight’s growth strategy will support continuously larger geographic spread and solidify Enlight's competitive position in light of growing demand for electricity. In the first nine months of 2025, about 40% of the Company's revenue originated in Israel, about 35% in Europe and about 25% in the U.S. We believe the geographic spread reduces dependence on a single market and exposes operations to markets with different demand and regulatory characteristics, contributing to revenue and cash flow stability. The Company operates in a supportive regulatory environment in most of its regions of operation, including markets with incentive mechanisms for renewable energy, policies to encourage private electricity production and long-term emission reduction plans. We believe that Enlight's operations will be positively impacted by growing demand for electricity, including from tech companies and data centers, which will support demand for large-scale generation and storage solutions, on which the Company focuses. We expect revenue from U.S. projects to continue growing, based on the Company’s backlog of projects in various stages of development, and considering the Company’s compliance with criteria that qualify these projects as “Safe Harbors”, which guarantess the Company’s eligibility for tax benefits under the IRA law. The expected growth in the Company's U.S. commercial portfolio will increase its share of total revenue, supporting its competitive position, in our view. According to the information provided by the Company, as of Q3 2025 all income-generating projects, projects under construction and projects nearing construction in the U.S. have secured their eligibility to qualify as “Safe Harbors”, in addition to about 45% of projects in advanced development stages and about 6% of projects in development.

Enlight's revenue model is largely based on long-term electricity sale contracts that support revenue stability and cash flow visibility. As of the end of Q3 2025, about 65% of existing capacity and additional capacity to be connected by 2028 are based on fixed-price PPAs, about 8% on linked contracts, about 10% on sales at a regulated rate in Israel, and about 17% of the revenues are exposed to market prices. In our opinion, this mix provides a balance between a substantial component of stable revenues and some exposure to electricity prices, which on the one hand increases volatility risk, but on the other hand allows the Company to benefit from an expected increase in electricity prices in existing contracts and not only in new projects. In addition, the Company benefits from adequate customer and supplier diversification, which contributes to reducing operating and supply risks.

 

Enlight's financial risk profile reflects its growth strategy and financial policy, which include large investments taken alongside equity issuances. The Company’s leverage decreased in recent years, such that its adjusted debt-to-EBITDA ratio was about 10x in 2024 compared with about 13x in 2023. Given the growth in operating performance in the first three quarters of 2025, the Company's annual investment budget and the ~$300 million equity issuance completed in August, we believe that the Company’s leverage will continue to decline, and its adjusted debt-to-EBITDA ratio will be about 8.5x-9.5x in 2025-2026. We believe that the continued implementation of the extensive investment plan in projects in advanced stages of construction and development is expected to lead to a continued increase in debt, but, given the Company's financial policy and its ability to finance part of the growth through equity issuances, supports our financial risk assessment.

Chart 1: Growth in the mature portfolio alongside lower leverage

The Company’s EBITDA interest coverage was about 2.2x in 2024, and about 1.9x in the first three quarters of 2025. We believe Enlight will post an adjusted coverage ratio above 2.0x in the next two years, which supports the rating. Our assessment is based, among other things, on the expectation that the Company’s EBITDA will grow faster that the growth in interest expense due to the expected increase in debt.

 

Outlook

 

The stable outlook reflects our assessment that in the next 12 months Enlight will maintain its competitive position and its geographical spread, while implementing its growth strategy in accordance with our base case scenario. Given the current and expected mix and scope of operations, we believe that an adjusted debt-to-EBITDA ratio of about 9x and adjusted EBITDA interest coverage of about 2.0x on average are commensurate with the rating.

 

Upside Scenario

 

We will consider a positive rating action if Enlight substantially increases the scope of its operations, while gradually transitioning to a more mature activity profile that relies on a higher share of income- producing assets and reducing the relative share of development activity, alongside establishing a competitive position in core markets. We will also consider a positive rating action in the event of a significant improvement in the Company’s financial risk profile, to be reflected in a decrease in adjusted debt-to-EBITDA towards 5x over time and as part of financial policy.

Downside Scenario

 

We may take a negative rating action in case of a material deviation from our base case scenario, such that adjusted debt-to-EBITDA exceeds 10x over time. Such a scenario may materialize, for example, in the event of an unexpected increase in investments, without adequate equity issuances, which would lead to significantly higher debt and, accordingly, to higher leverage. Downside pressure on the rating may also occur if the Company’s operating performance weakens, if the regulatory environment in material regions in which the Company operates is not supportive, or in the event of significant delays in projects in development and construction.

Company Description

 

Enlight Renewable Energy Ltd. is a public company engaged in the development, financing, construction and operation of facilities for power production from solar energy and wind energy and for energy storage, and the sale of electricity produced in these facilities. The Company has over 100 income-generating projects in Israel, the U.S. and several European countries (some of them in clusters), with aggregate production capacity of 2.5 GW and aggregate storage capacity of about 2 GWh as of September 30, 2025. The Company was founded in Israel in 2008, and has been traded on the Tel Aviv Stock Exchange since 2010 and on NASDAQ since 2023. The Company's ownership structure is decentralized with no controlling shareholder. About 45.1% of the Company’s shares are held by the public, about 53.6% by institutional investors and hedge funds and about 1.3% by stakeholders.

 

Base Case Scenario

 

Our base case scenario is underpinned by the following assumptions:

 

 

 

 

Under our base case scenario, the expected adjusted ratios in 2025-2026 are as follows:

 

 

Liquidity

 

We assess the Company’s liquidity as “adequate”. We expect the ratio between the Company's sources and uses to exceed 1.2x in the 12 months starting October 1, 2025. Our assessment is supported by Enlight's access to a variety of financing sources, including working with a large number of financing entities in Israel, Europe and the U.S., and its track record of completing large-scale project financial closings, e.g. a project financing agreement of about $1.4 billion for the Snowflake A project, alongside the signing of significant tax partnerships and large bond and equity issuances that the Company completed in the past year.

 

Following are the Company’s main sources and uses for the 12 months starting October 1, 2025:

 

 

Covenant Analysis

 

The Company has several covenants vis-à-vis bond holders, banks and financial institutions. We understand that, as of September 30, 2025, the Company has sufficient headroom on its financial covenants, and we estimate that it will maintain sufficient headroom in the short term.

Modifiers

 

Diversification/portfolio effect: Neutral (no impact)

Capital structure: Neutral (no impact)

Liquidity: Adequate (no impact)

Financial policy: Neutral (no impact)

Management and governance: Neutral (no impact)

Comparable ratings analysis: Positive (positive impact)

 

Environmental, Social, And Governance

 

ESG factors are an overall neutral consideration in our credit rating analysis of Enlight Renewable Energy Ltd. The Company operates in the renewable energy sector, and is well positioned compared to companies in the conventional energy sector in terms of its environmental impact and social perception.

 

Recovery Analysis

 

Key Factors

 

 

Simulated Default Assumptions

 

 

Simplified Waterfall

 

 

 

 

 

 

 

 

 

All debt amounts include six months' prepetition interest.

 

 

Recovery ratings are capped in certain countries to adjust for reduced creditor recovery prospects in these jurisdictions. Recovery ratings on unsecured debt issues are generally also subject to caps (see Step 6, paragraphs 90-98 of Recovery Rating Criteria For Speculative-Grade Corporate Issuers, December 7, 2016, for further detail). ICR--Issuer credit rating.

Related Criteria And Research

 

 

 

 

 

 

 

 

Ratings List

 

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