Current Report No. 7/2019

Current Report No. 7/2019

Date of Preparation: 30 April 2019

Subject: Financing of the construction of the Ostrołęka C power plant

Legal Basis: Article 17 Section 1 of the Market Abuse Regulation – confidential information

With reference to current report No. 55/2018 dated 29 December 2018, the Management Board of Energa S.A. (“Issuer”) advises that the Issuer and Enea S.A. (“Enea”) concluded an agreement for the financing of the construction of the Ostrołęka C power plant in Ostrołęka with a capacity of 1,000 MW (“Project”) (“Agreement”) on 30 April 2019. The purpose of the Agreement is to further define the rules for financing the Project in order to enable its implementation to be continued without delays.

According to the Agreement, without prejudice to the arrangements made between the parties to date, the Issuer has undertaken to Enea and Elektrownia Ostrołęka Sp. z o.o. (“Company”) to ensure financial resources of no less than PLN 819 million for the Company to implement the Project in accordance with the investment project time schedule, and ENEA has undertaken to the Issuer and the Company to ensure financial resources of PLN 819 million for the Company to implement the Project in accordance with the investment project time schedule.

These amounts correspond to the financial commitment declared in the agreement signed on December 28, 2018, referred to in the current report No. 55/2018, i.e. not less than PLN 1 billion for the Issuer, including funds already transferred to the Company by the Issuer for the purposes of advance payment for the general contractor of the block, in the amount of approximately PLN 181 million. The intention of the Issuer and Enea is to implement the Project in the form of joint control.

Energa will carry out its obligations starting from the date of execution of the Agreement, in the years 2019 and 2020 and in subsequent years, whereas ENEA will carry out its obligations starting from January 2021.

At the same time, the Issuer and Enea have undertaken to negotiate in good faith target rules for cooperation in the shareholders’ agreement / investment agreement which is to define, on a comprehensive basis, the structure and form of the financing of the Project. In case if they have not been determined by December 31, 2020, Enea will be obliged to repay the Issuer half of the financial resources ensured to the Company by the Issuer itself at this time, save that the total amount that Enea may be obliged to repay may not exceed PLN 819 million.

The Issuer will advise about the conclusion of a further Project financing agreement or agreements in a separate current report.