Energa S.A.

Share Issue/Capital Change • Mar 31, 2017

Current Report No.: 19/2017

Date of preparation: 31 March 2017

Subject: Entering into an investment agreement on recapitalization of PGG

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

In reference to Current Report No. 18/2017 of 29 March 2017, theManagement Board of ENERGA SA reports that on 31 March 2017 ENERGA SA'ssubsidiary ENERGA Kogeneracja Sp. z o.o. ("ENERGA Kogeneracja","company") signed an investment agreement specifying the terms andconditions of the financial investment in Polska Grupa Górnicza Sp. zo.o. ("PGG") ("Transaction", "Investment") ("Agreement", "InvestmentAgreement").

The parties to the Investment Agreement are ENERGA Kogeneracja, EneaS.A., PGE Górnictwo i Energetyka Konwencjonalna S.A., PGNiG TERMIKAS.A., Węglokoks S.A., Towarzystwo Finansowe "Silesia" Sp. z o.o.,Fundusz Inwestycji Polskich Przedsiębiorstw Fundusz InwestycyjnyZamknięty Aktywów Niepublicznych [Polish Corporates Mutual Fund](hereinafter jointly referred to as "Investors") and PGG.

The new Investment Agreement amends and supplements the terms andconditions of execution of the investment of the existing PGGshareholders specified in the first investment agreement entered intobetween the existing shareholders and the company on 28 April 2016.

The Transaction assumes recapitalization of PGG by the Investors(excluding Węglokoks S.A. and Fundusz Inwestycji PolskichPrzedsiębiorstw) for the total amount of PLN 1 billion in 3 tranches.

As part of the investment in PGG, ENERGA Kogeneracja has undertaken tosubscribe for new shares with the total par value of PLN 100 million inreturn of a cash contribution of PLN 100 million, in 3 tranches:

1)in the first tranche in April 2017 the company will subscribe forPGG's shares in return for a cash contribution of PLN 50 million,

2)in the second tranche in June 2017 the company will subscribe forPGG's shares in return for a cash contribution of PLN 20 million,

3)in the third tranche in Q1 2018 the company will subscribe for PGG'sshares in return for a cash contribution of PLN 30 million.

After the last recapitalization the company will have a 15.32% stake inPGG's share capital.

The purpose of the investment was to raise funds for PGG to finance theacquisition of the enterprise of Katowicki Holding Węglowy S.A. andPGG's planned capital expenditures.

The Agreement also regulates the rules for PGG's functioning andappointing Supervisory Board members according to which each Investorand State Treasury will be entitled to appoint one member in theSupervisory Board with a maximum size of 8 persons.