Enea S.A. — M&A Activity 2020

Jun 2, 2020

Current Report No.: 21/2020

Date of Preparation: 2 June 2020

Issuer's Abbreviated Name: ENEA S.A.

Subject: Information on the completion of analyses and the signing of anadditional tripartite agreement in connection with the execution of theOstrołęka C project

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

Body of the report:

With reference to Current Report No. 4/2020 of 13 February 2020, theManagement Board of ENEA S.A. ("Company") hereby reports that on 2 June2020 it accepted the final report on analyses conducted in cooperationwith Energa S.A. ("Energa") regarding technical, technological,economic, organizational and legal aspects and potential continuation offunding for the project involving the construction of a new coal-firedunit in the form of the planned Ostrołęka C power plant in Ostrołękawith a capacity of approx. 1,000 MW (Project).

The conclusions drawn from the analyses do not justify the continuationof the Project in its current form, that is as a project aimed at theconstruction of a power plant that would generate electricity in a hardcoal firing process. The factors leading to the said conclusions include:

(i) regulatory changes at the level of the European Union and lendingpolicies adopted by a number of financial institutions, resulting in asignificantly greater availability of funding for energy projects basedon the firing of natural gas rather than coal;

and

(ii) acquisition of control over Energa by Polski Koncern Naftowy ORLENS.A. ("PKN ORLEN") whose strategy does not provide for investing inelectricity generation projects based on the firing of coal.

At the same time, the technical analysis confirmed the feasibility of anoptional construction of a power plant that would generate electricityin a natural gas firing process ("Gas Project") at the current site ofthe coal-fired unit being constructed.

Accordingly, the Company's Management Board made a decision to continuethe construction of the generating unit in Ostrołęka based on theassumption of changing the generating process from the firing of coal tothe firing of natural gas.

On 2 June 2020, a trilateral agreement was entered into by and betweenthe Company, Energa and PKN ORLEN, whereby the following key principlesof cooperation in the Gas Project were defined:

- with the reservations referred to below, continuation of cooperationbetween the Company and Energa within the framework of the existingspecial purpose vehicle, namely Elektrownia Ostrołęka sp. z o.o.("Elektrownia Ostrołęka"), along with settlement, between the Companyand Energa, of costs related to the Project and settlements with thecontractors involved in the execution of the Project, in accordance withexisting rules,

- inclusion of PKN ORLEN in the Gas Project as a new partner potentiallyplaying a role therein,

- participation of ENEA S.A. in the Gas Project as a minority partnerwith limited financial exposure, as a result of which the Company willnot be included in the pool of parties exercising joint control overElektrownia Ostrołęka,

- subject to obtaining the necessary corporate approvals, signing of anew partners' agreement on the execution of the Gas Project inaccordance with the foregoing principles of cooperation,

- taking steps to obtain funding for the Gas Project by Energa incooperation with PKN ORLEN.

The signing of the new partners' agreement on the execution of the GasProject in accordance with the foregoing principles of cooperation willbe announced by the Company in a separate current report.