Energa S.A.

Related Party Transaction • Dec 8, 2016

Current Report No. 49/2016

Date of preparation: 8 December 2016

Subject: Signing of an Investment Agreement with Enea S.A. regardinginvolvement in pre-construction work and in the construction andoperation of a new power unit at the Ostrołęka Power Plant

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

In reference to Current Report No. 44/2016 dated 30 November 2016, theManagement Board of ENERGA SA ("Company", "ENERGA") hereby reports thaton 8 December 2016 the Company entered into an Investment Agreement("Agreement") with Enea S.A. and Elektrownia Ostrołęka SA ("Parties")regarding the execution of the Ostrołęka C project ("Project","Investment", "Ostrołęka C"). The subject matter of the Agreement is thepreparation, construction and operation of a 1,000 MW-class coal-firedpower unit.

According to the signed Agreement, in principle, the cooperation will bestructured around three stages: Development Stage - until an instructionis issued to the general contractor to commence the work; ConstructionStage - until Ostrołęka C is commissioned for commercial operations; andOperation Stage - commercial operation of Ostrołęka C. Upon completionof the Development Stage the Parties are obligated to participate in theConstruction Stage provided that the Project is profitable and theProject funding does not breach the Parties' covenants.

It is estimated that Energa's capital expenditures until the end of theDevelopment Stage will total approx. PLN 27 million.

In order to execute the Investment Project, Energa SA will dispose ofthe shares in Elektrownia Ostrołęka SA, constituting 50% in the sharecapital, to Enea SA, in the amount of approx. PLN 101 million. Thecondition precedent for entry of the Investment Agreement into effect isthe approval of UOKiK's President for the concentration involvingacquisition of the shares of the special purpose vehicle for executionof the Project.

Based on specific assumptions (including appropriate participation ofEnerga, Enea and Financial Investors, if any) and assuming that theCapacity Market or other support mechanisms are introduced, ElektrowniaOstrołęka SA will be able to undertake the comprehensive execution ofthe Project.

The rules of cooperation adopted after signing the Investment Agreementshould contribute to announcement of the tender to select the generalcontractor for the power unit before the end of 2016 in order tocomplete the Investment Project in the second half of 2023.