Energa S.A.

Legal Proceedings Report • Jun 2, 2020

Current Report No. 51/2020

Date: 2 June 2020

Subject: Information on analyses conducted and on the conclusion of anadditional trilateral agreement relating to the Ostrołęka C Projectimplementation

Legal basis: Article 17 (1) of MAR - inside information

With reference to current reports No. 8/2020 of 13 February 2020, No.11/2020 of 23 February 2020 and No. 38/2020 of 7 May 2020, theManagement Board of Energa SA ("Company") informs that on 2 June 2020 itaccepted the final report on analyses conducted in collaboration withENEA S.A. (ENEA), notably on analyses concerning technical,technological, economic, organizational and legal aspects, and onfurther financing of the project for the construction of a newcoal-fired unit - the planned Ostrołęka C power plant in Ostrołęka withthe capacity of approx. 1,000 MW ("Project").

The conclusions from the analyses do not justify continuation of theProject in its existing form, i.e. the project to construct a powerplant generating electricity in the process of hard coal combustion. Thefollowing aspects have, among other things, influenced the aboveevaluation:

(i) regulatory changes at the level of the European Union and creditpolicy of individual financial institutions, indicating a significantlyhigher availability of financing for energy projects based on gascombustion than coal projects;

and

(ii) takeover of control over the company by PKN ORLEN S.A. ("PKNORLEN"), whose strategy does not envisage any investment projects in theproduction of energy based on coal combustion.

At the same time, the technical analysis confirmed that a power plantproducing energy as part of natural gas combustion ("Gas Project") maybe built in the existing location of the coal-fired power plant beingbuilt.

As a consequence, the Management Board of the Company took a decisionintending to continue the construction of the generating unit inOstrołęka, upon accounting for the change in the fuel source from coalto gas.

On 2 June 2020, Energa SA, ENEA and PKN ORLEN entered into a trilateralagreement setting out the following main terms of cooperation under theGas Project:

- subject to the below restrictions, the Company will continue tocooperate with ENEA as part of the existing special-purpose vehicle,that is the company Elektrownia Ostrołęka Sp. z o.o. ("ElektrowniaOstrołęka") and will settle with ENEA the Project-related costs as wellas will settle with the Project contractors, according to the existingrules.

- accounting for the role, if any, of PKN ORLEN in the Gas Project as anew partner,

- the participation of ENEA in the Project as a minority shareholderwith a limit on the exposure amount; as a consequence, ENEA will nothave joint control over Elektrownia Ostrołęka,

- subject to obtaining the necessary corporate approvals, entering intoa new shareholders' agreement on the implementation of the Gas Project,upon accounting for the above terms of cooperation,

- the Company together with PKN ORLEN taking actions to obtain fundingfor the Gas Project.

The Company will inform about the conclusion of a new shareholders'agreement regarding the implementation of the Gas Project, uponaccounting for the above principles of cooperation, in a separatecurrent report.