Energa S.A.

Capital/Financing Update • Sep 4, 2017

Current Report No. 36/2017

Report Title: Signing of hybrid financing agreements with EuropeanInvestment Bank

Date: 04.09.2017

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

The Management Board of ENERGA SA ("Company") reports that on 4September 2017 the Company and European Investment Bank ("EIB") signedthe following agreements:

(i)project agreement, defining the detailed requirements regarding thefinancing of an investment project,

(ii)subscription agreement ("Subscription Agreement"), constituting thebasis for issuing hybrid bonds for EUR 250 million ("Bonds").

The said financing will be slated for execution of an investment programin the Distribution segment, consisting in modernization and expansionof the ENERGA Group's distribution assets in 2017-2019. The plannedinvestments are aimed at increasing the security of electricity supplieswhile simultaneously reducing grid losses and improving service quality.The estimate qualified expenditures in this period will amount toapprox. EUR 814 million.

The Bonds are subordinated, unsecured, coupon bearer securities to besubscribed for by EIB under the European Fund for Strategic Investmentslaunched by EIB jointly with the European Commission to execute theso-called Juncker Plan. The date of the Bond issue has been set for 12September 2017.

In accordance with the Subscription Agreement, the Bonds will be issuedin two tranches with the total nominal value of:

(i)EUR 125 million, maturing in 16 years, with the first financingperiod set for 6 years from the issue date,

(ii)EUR 125 million, maturing in 20 years, with the first financingperiod set for 10 years from the issue date.

Bonds will bear interest at a fixed interest rate estimated according tothe formula specified in the terms of issue.

In accordance with the characteristics of hybrid financing, in the firstfinancing period the Company will not be able to redeem the Bonds earlyand EIB will not be able to sell the Bonds early to third parties (inboth cases, subject to certain exceptions specified in the Agreement).In the same period the Company may, at its sole discretion, opt to deferall or part of the Interest payments.

The Bond issue will have positive impact on the Group's financialstability and diversification of its financing sources.