Energa S.A.

Business and Financial Review • Jul 26, 2019

Currentreport:24/2019

Date:26th of July 2019

Subject:Information on theimpairment loss on the value of assets held in Ostrołęka Power Plant B

Legalbasis:Article17(1) MAR - inside information

TheManagement Board of Energa SA hereby reports that due to certain changesin the legislative environment ie. in connection with the promulgationof EU Regulation 2019/943 of 5thof June 2019 regardinginternal electricity market, introducing, among others, the limitationon the support the power market mechanism for existing units fired withfossil fuels, which emit more than 550g CO2/kWh of electric energy andabove 350 kg of CO2 average on a yearly basis per kWe of installedcapacity,premiseshave been identified which result in the recognition of impairment losson assets in Ostrołęka Power Plant B.

Theimpairment test carried out in 1 half of 2019 revealed a decrease in therecoverable amount of assets in Ostrołęka Power Plant B. On 26 July2019, a decision was taken to recognize impairment loss on the assets inthe total amount of PLN 269,9 million. The estimated effect of theimpairment loss on the consolidated net result of the Energa Group for 1half of 2019 is PLN 218,6 million. No cash flows will be involved. Thiswill deteriorate the operating result of the Energa Group withoutaffecting its EBITDA.

Adjustedfor the impairment loss, the carrying amount of Ostrołęka Power Plant Bin the consolidated balance sheet of the Energa Group amounts to PLN566,1 million.

Thepresented financial data are estimates and will be audited therefore itmay be changed. The final outcome of the test and the amount of theimpairment loss will be presented in the consolidated financialstatements of the Energa Group for 1 half of 2019.

TheOstrołęka B power plant has a 5-year power contract for 2021-2025.