Energa S.A.

Legal Proceedings Report • Sep 11, 2017

Title of the report: Initiation by the ENERGA Group of court andarbitration proceedings concerning framework agreements on sales ofproperty rights arising from the certificates of origin.

Date:11.09.2017

Number of the report: 37/2017

Legal grounds: Article 17 Section 1 of the Market Abuse Regulation -confidential information

The Management Board of ENERGA SA ("Issuer") hereby reports that theManagement Board of ENERGA-Obrót SA ("Subsidiary Company") on 11.09.2017adopted a resolution on initiation of court and arbitration proceedings,which subject-matter is to be determination of the non-existence of thelegal relationships that were to be arisen as a result of concluding bythe Subsidiary Company with electricity producers which use renewableenergy sources, twenty-two framework agreements on sale of propertyrights arising from the certificates of origin ("Agreements").

The Management Board of the Subsidiary Company, the sole shareholder ofwhich is the Issuer, has made a decision to cease to perform theAgreements and to initiate court and arbitration proceedings (bringactions) against contractors, i.e. entities producing electricity andselling the property rights to the Subsidiary Company, and banks -transferees.

The subject-matter of the abovementioned proceedings will be thedetermination of the non-existence of the legal relationships that wereto be created as a result of concluding the Agreements. The ManagementBoard of the Subsidiary Company took a position that the Agreements arevoid given the circumstance that they obliged to conclude agreements onsales of property rights without applying the procurement proceduredetermined in the Act of 29 January 2004 - Public Procurement Law(consolidated text: Journal of Laws of 2017 item 1579 with furtheramendments), which results in a high probability of the Agreements beingvoid. In the opinion of the Management Board of the Subsidiary Company,cessation of performance of the Agreements is a consequence of theAgreements being void as obliging to act in breach of law (procurementprocedure).

According to the current state of knowledge, the Issuer estimates thepositive impact of cessation to perform the Agreements to be about 110million PLN in 2018. At the same time, as a result of entry into forceof the Act of 20 July 2017 on amendments to the Renewable Energy SourcesAct (Journal of Laws of 2017, item 1593) and in connection with takingup the actions described in this current report, the positive impact onthe Issuer during the remaining period of validity of the Agreements isestimated to be about 2.1 billion PLN. The above calculations are basedon the assumption of the volume of retail sales to be at the level ofyear 2016 (19 TWh) and the level of the unit substitution fee to be 43PLN/MWh during the whole period of validity of the Agreements.

The above calculations do not constitute a forecast of the ENERGAGroup's future performance.