Enea S.A. — M&A Activity 2016

Nov 30, 2016

Current Report No.: 37/2016

Date of preparation: 30.11.2016

Short name of issuer: Enea S.A.

Subject: Approval by Enea S.A.'s Supervisory Board of the jointengagement with Energa S.A. in the preparation for construction,construction and exploitation of the new power unit in Ostrołęka PowerPlant

Legal basis: Article 17 item 1 of MAR - confidential information

Content of report:

The Management Board of Enea S.A. ("Company"), in relation to thecurrent report of 19 September 2016 No. 28/2016 informs that on 30November 2016 the Company's Supervisory Board approved the conclusion ofthe Investment Contract by Enea S.A. with Energa S.A. and ElektrowniaOstrołęka S.A. and acquisition by Enea S.A. of 50% of shares held byEnerga S.A. in the share capital of Elektrownia Ostrołęka S.A., and as aconsequence, approval of the cooperation of Enea S.A. and Energa S.A. inrelation to the implementation of Ostrołęka C project, whose goal ispreparation, construction and exploitation of a 1,000 MW bituminous coalfired power unit ("Project", "Investment", "Ostrołęka C").

The cooperation, as a rule, will be organised in three stages:Development Stage - until the instruction to commence works for thegeneral contractor; Construction Stage - until the commissioning ofOstrołęka C for commercial exploitation and Exploitation Stage -commercial exploitation of Ostrołęka C. After the Development Stage EneaS.A. is obliged to participate in the Construction Stage with theassumption that the Project profitability condition is satisfied, andProject financing will not infringe upon the Company's bank covenants.

It is estimated that Enea S.A.'s total capital expenditures until thecompletion of the Development Stage will amount to ca. PLN 128 million.

For the implementation of the Investment Energa S.A. will dispose of theshares held in Elektrownia Ostrołęka S.A., constituting 50% in the sharecapital, to Enea S.A., in the amount of ca. PLN 101 million. A conditionprecedent suspending the Investment Contract's entry into force isobtaining the consent of the President of the Office of Competition andConsumer Protection to perform the consolidation being the acquisitionof the shares in the special purpose vehicle to implement the Project.

Elektrownia Ostrołęka S.A. on the realisation of specific assumptions(with a relevant share of Enea S.A., Energa S.A. and potential FinancialInvestors) and assuming the introduction of the Capacity Market or othersupport mechanisms, will be able to undertake a comprehensiveimplementation of the Project.

Another step is conclusion of the Investment Contract by Energa S.A.,Enea S.A. and Elektrownia Ostrołęka S.A. The terms of cooperation agreedupon following the execution of the Investment Contract shouldcontribute to the announcement of a tender for the selection of ageneral contractor for the power unit until the end of 2016, with theaim of completing the Investment in the second half of 2023.