Tauron Polska Energia S.A.

Business and Financial Review • May 27, 2019

Current report no. 23/2019

Adopted update of the strategic directions of TAURON Group's Strategy

TAURON Polska Energia S.A. ("Company") informs that on May 27, 2019 theCompany's Management Board adopted, and the Supervisory Board issued apositive opinion, on the update of the strategic directions that are anaddendum to TAURON Group's 2016-2025 Strategy. The Strategy was thesubject of current report no. 34/2016 of September 2, 2016.

The updated strategic directions take into account changes of market andregulatory environment in which TAURON Capital Group ("TAURON Group","Group") operates.

In accordance with the Strategy in force and the adopted update of thestrategic directions the growth of the Group's value will primarily bebased on:

- regulated and stable Distribution segment,

- development of low emission and zero emission sources,

- conventional assets eligible for support,

- sales of energy and energy related products and services tailored tocustomers' needs.

As a result of implementing the actions planned it will be possible toraise the share of low emission and zero emission sources in TAURONGroup's generation fleet from 10 percent in 2018 to almost 30 percent in2025 and more than 65 percent in 2030.

Taking into account the need for the Group's energy transition,optimization of the investment portfolio and maintaining financialstability the decision on conducting a market verification of thefollowing strategic options has been taken:

- development of low emission and zero emission power generation,primarily through investments in renewable energy sources. By 2025 theGroup plans to invest in on-shore wind farms (additional 900 MW),photovoltaic farms (additional 300 MW) and commencing the process ofengaging in the construction of off-shore wind farms. The growth of theGroup's renewable sources' capacity may take place under variousbusiness models. In the case of some of the projects planned it isassumed that financial partners will be recruited and investmentprojects will be carried out with an approx. 20 percent equity share ofTAURON Group and the Group being able to manage such assets;

- enhanced flexibility of the Group's asset portfolio by aligning themining assets with the Group's planned demand for fuel, reorganizing theGeneration segment and equity investments portfolio. As part of thatoption, a market verification of the divestment of Janina Coal Mine andTAURON Ciepło subsidiary, as well as a sale of the shares in:Elektrociepłownia Stalowa Wola and PGE EJ 1, are taken intoconsideration. With respect to conventional power generation, permanentdecommissioning of the 120 MW units and, after 2025 - the 200 MW units,is planned.

The implementation of the above options will enable a sustainabletransition of TAURON Group and it will increase investment potential forthe development of renewable energy sources.

The individual strategic options will be implemented solely if theprofitability of the solutions adopted is confirmed, taking into accountthe Group's financial capabilities.

At the current stage the update of the strategic directions does notinvolve a change of the objectives defined in TAURON Group's 2016-2025Strategy.

Legal basis:

Art. 17 sec. 1 of MAR - inside information