Energa S.A.

M&A Activity • Mar 26, 2018

Current Report No.: 12/2018

Date of preparation: 26 March 2018

Short name of Issuer: ENERGA SA

Legal basis: Art. 17 section 1 of MAR - confidential information

Subject: Signing of an Annex to the Investment Agreement regardinginvolvement in the preparation for construction, construction andoperation of a new power unit at Ostrołęka Power Plant and sale ofshares in Elektrownia Ostrołęka sp. o.o.

Content of report:

The Management Board of ENERGA SA ("Issuer"), in relation to the CurrentReport No. 49/2016 of 8 December 2016 and the Current Report No. 3/2017of 17 December 2017, hereby informs that on 26 March 2018 the Issueconcluded Annex No. 1 ("Annex") to the Investment Agreement with thecompanies ENEA S.A. and Elektrownia Ostrołęka Sp. z o.o. ("Company","Ordering party") concerning the execution of the Ostrołęka C project.

In accordance with the concluded Annex, the parties have increased theestimate total capital expenditure arising from their obligations to beundertaken at the Development Stage of the Ostrołęka C project, that isuntil a notice to proceed (NTP) is issued to the General Contractor. Thecapital expenditure attributable to the Issuer shall amount to PLN 226,5million.

The capital expenditure has been increased in order to provide theresources, amongst others, for organisational works which will resultfrom the contract with the General Contractor, related investments andthe operations of the Company.

Moreover, the Issuer hereby informs that in the course of performance ofthe Investment Agreement the Issuer sold on 23 March 2018 to the benefitof ENEA S.A. a stake of 1,201,036 shares in the Company for approx. PLN58 million. As a result of this operation, the Issuer's sharesconstitute in total 50% Company's share capital.

The conclusion of the said Annex is not equivalent to:

-the decision being taken by the Company's Management Board to selectthe General Contractor, hence it does not mean the conclusion of thepublic contract awarding procedure under the name of "Construction ofOstrołęka Power Plant with approx. 1,000 MW power output" by theOrdering Party;

-the consent given to enter into a contract with the General Contractor- in order to give such a consent it is necessary to obtain the requiredcorporate approvals, including the consent of the Issuer's SupervisoryBoard;

-the agreement to issue a notice to proceed (NTP) - the issue of NTPrequires, among others, prior consent of the Issuer's Supervisory Boardand prior qualified consent of the Issuer's General Meeting to commencethe Construction Stage.

It is estimated that the capital expenditure related to the conclusionof the agreement between the Ordering party and the General Contractoruntil the NTP is issued will not exceed the equivalent of 4% of theprice under the contract.