Energa S.A.

Regulatory Filings • Nov 30, 2016

Current Report No. 44/2016

Date of preparation: 30 November 2016

Subject: Consent given by the Energa SA Supervisory Board forinvolvement in preparation for construction, construction and operationof a new power unit in the Ostrołęka Power Plant jointly with Enea SA

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

In reference to current report no. 33/2016 dated 19 September 2016, theManagement Board of Energa SA ("Company", "Energa") reports that on 30November 2016 the Company's Supervisory Board gave consent to Energa SAto enter into an Investment Agreement with Enea SA and ElektrowniaOstrołęka SA ("Parties") and dispose of 50% of Energa SA's shares in theshare capital of Elektrownia Ostrołęka SA to Enea and, as a consequence,giving consent for cooperation of Enea SA and Energa SA on execution ofthe Ostrołęka C project aimed at preparation, construction and operationof a class 1.000 MW hard coal-fired power unit ("Project", "InvestmentProject", "Ostrołęka C").

In principle, the cooperation will be structured around three stages:Development Stage - until an instruction is issued to the generalcontractor to commence the work; Construction Stage - until Ostrołęka Cis commissioned for commercial operations; and Operation Stage -commercial operation of Ostrołęka C. Upon completion of the DevelopmentStage the Parties are obligated to participate in the Construction Stageprovided that the Project is profitable and the Project funding does notbreach 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 next step will involve execution of the Investment Agreement byEnerga SA, Enea SA and Elektrownia Ostrołęka SA. The rules ofcooperation adopted after signing the Investment Agreement shouldcontribute 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.