Energa S.A.

Report Publication Announcement • May 22, 2017

Current Report No. 22/2017

Date of preparation: 22 May 2017

Subject: ENERGA SA Management Board's recommendation on the dividendpayment

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

The Management Board of ENERGA SA ("Company") reports that on 22 May2017 it adopted a resolution on the distribution of net profit for the2016 financial year.

The Company's Management Board recommends to the Shareholder Meeting thefollowing distribution of net profit for 2016 in the amount of PLN783,542,643.96:

1)payment of a dividend to shareholders in the amount of PLN78,672,751.66, i.e. PLN 0.19 per share (10% of profit),

2)designation of profit in the amount of PLN 704,869,892.30 tosupplementary capital (90% of profit).

The above proposal regarding dividend payment results from an analysisof the Company's financial standing, observation of the changing marketand regulatory environment and taking into consideration the ENERGAGroup's current and planned investments. In the Company's opinion, thepayment of the dividend will not exert negative influence on the ENERGAGroup's financial and liquidity position, its ability to execute itscurrent investment plans and the ENERGA Group's growth strategy inaccordance with its assumptions.

According to Article 396 § 1 of the Commercial Companies Code, theCompany is obligated to form supplementary capital and allocate at least8% of its profit for a given financial year until such time that itbecomes equal to one-third of share capital (that means the amount ofPLN 1,507,204,294.96 for ENERGA SA). As at 31 December 2016, it is PLN728,047,318.80, i.e.16.1% of share capital, while upon incorporating theproposed distribution of profit, it will be 1,432,917,211.10, or 31.7%of share capital (i.e. 95.1% of the required amount).