Energa S.A.

Capital/Financing Update • Nov 28, 2016

Subject: Affirmation of ENERGA's rating by Fitch Ratings

Legal basis: Article 56 Section 1 Item 2 of the Act on Offerings -current and periodic information

The Management Board of ENERGA SA ("Company", "ENERGA") hereby reportsthat, on 28 November 2016, Fitch Ratings ("Agency", "Fitch") affirmedthe Company's long-term foreign and local currency Issuer DefaultRatings (IDRs) at ‘BBB' with a stable outlook and a ‘BBB' rating for thebonds issued by the Company's subsidiary ENERGA Finance AB (publ).

The Agency's affirmation of the rating has been justified by thedominant share of the Distribution Segment in the Group's total plannedcapital expenditures and EBITDA, resulting in low business risk and goodcash flow predictability compared to conventional power generation. Atthe same time, the Agency has taken into account in its assessment thebusiness risk associated with the Ostrołęka C Power Plant project. Fitchindicates that this risk is mitigated, without limitation, by strategicpartnership in the execution of the project and the expectedintroduction of the Capacity Market in Poland.

In its report, Fitch estimates that ENERGA SA's debt is at a moderatelevel with the Company's financial leverage with funds from operations(FFO) at 1.9x, which the Agency projects to increase in 2018-2020 to3.5x, i.e. the maximum permissible level for a rating of ‘BBB'. InFitch's opinion, the increase in debt will be a consequence of theimplementation of the Group's Strategy for 2016-2025 and the capitalexpenditures of PLN 20.6 billion provided for therein.

According to the Agency, ENERGA has some flexibility in allocating thefunds budgeted for capital expenditures. Fitch points out that theCompany's plans provide for further improvements in efficiency and forobtaining financing of EUR 250 million from the European Investment Bankin the form of hybrid bonds. These activities may bring aboutimprovements in credit ratios.

The Agency's full report is available on the Fitch Ratings website.