PGE Polska Grupa Energetyczna S.A.

Legal Proceedings Report • Feb 25, 2021

Signing of the settlement agreement regarding the agreement fordesigning and construction of power unit in Turów power plant

With reference to the current report no. 23/2020 dated July 28, 2020,the Management Board of PGE Polska Grupa Energetyczna S.A. ("PGE")discloses that on February 25, 2021 PGE Górnictwo i EnergetykaKonwencjonalna S.A. (PGE's subsidiary), after detailed analysis of theConsortium's proposal for change in the schedule and price of thecontract with regard to methodic accuracy of assumptions taken, reasonsfor delay and planned methods of further management of the projectexecution, concluded a settlement agreement in front of the mediatorthat concerns designing and turn-key construction of power unit in Turówpower plant (the "Agreement"), being realized by consortium includingcompanies: Mitsubishi Hitachi Power System GmbH (Consortium leader),Tecnicas Reunidas S.A. and Budimex S.A. (the "Consortium").

The main conditions of the settlement agreement are presented below.

The value of the Agreement was increased by approx. PLN 108 million net,i.e. to PLN 3 755 million net.

The commissioning date of the unit was postponed by 6 months i.e. untilApril 30, 2021 what is in line with the earlier proposal of theConsortium, about which PGE informed in the above mentioned currentreport.

At the request of the parties, the settlement agreement shall besubmitted to the court for approval.

Other material terms of the Agreement remain unchanged.