Energa S.A.

Net Asset Value • Apr 29, 2016

Current report no. 17/2016

Date of preparation: 28 April 2016

Subject: Signing of the Investment Agreement concerning the financialinvestment in Polska Grupa Górnicza Sp. z o.o.

Legal basis: Article 56 section 5 of the Act on Offerings - informationupdate

In reference to current report no. 16/2016 of 26 April 2016 theManagement Board of ENERGA SA ("ENERGA") reports that on 28 April 2016ENERGA Kogeneracja Sp. z o.o. ("ENERGA Kogeneracja"), an indirectsubsidiary of ENERGA SA, signed an Investment Agreement specifying theterms and conditions of the financial investment in Polska GrupaGórnicza Sp. z o.o. ("PGG") ("Investment") ("Agreement").

The parties to this Agreement are ENERGA Kogeneracja, PGE Górnictwo iEnergetyka Konwencjonalna S.A., PGNiG TERMIKA S.A., Węglokoks S.A.("Węglokoks"), Towarzystwo Finansowe "Silesia" Sp. z o.o., FunduszInwestycji Polskich Przedsiębiorstw FIZAN [Polish Corporates MutualFund] (hereinafter jointly referred to as "Investors") and PGG. PGG willconduct its operations on the basis of selected mining assets which itwill acquire from Kompania Węglowa S.A. ("KW") (11 mines, 4establishments and all the support, management and oversight functionsin the KW Head Office will be transferred along with them). PGG'sacquisition of the foregoing assets is slated to transpire on 29 April2016.

The Agreement is to regulate how the investment will be conducted andhow to join PGG, the rules for the operation of PGG and its corporatebodies as well as the rules for the parties to divest their investmentin PGG. This Agreement calls for recapitalization of PGG in 3 stages byall the Investors with a total amount of PLN 2 billion 417 million.

Within the framework of recapitalizing PGG ENERGA Kogeneracja hasundertaken to do the following:

1. To pay PLN 361.1 million for the newly issued shares in PGG duringthe first stage (payable within 4 business days after signing theAgreement). The first stage of recapitalization will enable ENERGAKogeneracja to subscribe for 15.7% of PGG's share capital.

2. To pay PLN 83.3 million for the newly issued shares in PGG during thesecond stage (by 3 November 2016), which (considering recapitalizationby the other investors) will translate into a total stake of 16.6% inPGG's share capital.

3. To pay PLN 55.6 million for the newly issued shares in PGG during thethird stage (by 1 November 2017), which (considering recapitalization bythe other investors) will translate into a total stake of 17.1% in PGG'sshare capital.

The parties assume that upon satisfying the targets included in thebusiness plan forming an appendix to the Agreement PGG may start togenerate positive cash flow for its investors starting in 2017.According to the Company's estimates, the generated cash flow shouldmake it possible to achieve a rate of return exceeding the cost ofcapital employed. The Agreement posits the usage of multiple ratios tomonitor execution of the business plan. In particular, they pertain toprofitability, liquidity, the debt level and PGG's operating efficiency.The Agreement contains clauses pertaining to providing regularinformation to the Investors' representatives on the levels of thevarious ratios prescribed by the Agreement.

The Agreement specifies the rules for appointing Supervisory Boardmembers according to which each shareholder will be entitled to appointone member in the Supervisory Board with a maximum size of eight persons.

Subject to the exceptions contemplated by the Agreement, for 10 yearsafter the date of the first recapitalization of PGG, while if theCompany is transformed into a joint stock company, for 5 years after thedate of registering the transformation, no shares whatsoever may betransferred without the consent of the other shareholders.