PROJECT COMPANIES IMPLEMENTING OFFSHORE WIND FARM CONSTRUCTION PROJECTS CONCLUDED AGREEMENTS FOR THE SUPPLY OF KEY COMPONENTS OF WIND FARMS AND KEY CONSTRUCTION PHASE AGREEMENTS

The Management Board of Polenergia S.A. (“Issuer“) hereby informs that the project companies MFW Bałtyk II Sp. z o.o. and MFW Bałtyk III Sp. z o.o. (“Project Companies“), in which the Issuer holds 50% of shares, developing – as part of a joint venture of the Issuer and Equinor Wind Power AS – projects for the construction of two offshore wind farms, i.e., MFW Bałtyk II and MFW Bałtyk III (“Projects“), on  August 30^th, 2024 concluded (each Project Company separately):

(1) an offshore wind turbine transition element manufacturing agreement with a consortium of Smulders Project Belgium NV and Sif Netherlands BV (“Smulders Project and Sif“) (the “Transition Element Agreements“). The conclusion of the Agreements for Transitional Elements was preceded by the signing of reservation agreements, about which the Issuer informed in current report No. 34/2024 of June 28^th, 2024;

2) onshore export cable installation contracts with Enprom Sp. z o.o. with its registered office in Warsaw (“Enprom“) (“Cable Installation Agreements“);

3) a turnkey design and construction agreement for offshore transformer stations with Iemants NV with its registered office in Arendonk, Belgium (“Iemants“) (“Offshore Transformer Stations Agreements“). The conclusion of the Offshore Transformer Stations Agreements was preceded by the signing of reservation agreements, about which the Issuer informed in current report No. 25/2024 of May 14^th, 2024,

jointly as: “Agreements“, and each separately as “Agreement“.

Smulders Project and Sif, Enprom and Iemants are collectively referred to as the “Contractors” and each individually as the “Contractor“.

Transitional Element Agreements

Under the Transition Element Agreements, 100 transition elements connecting the foundation (monopile) with the wind turbine tower together with the equipment will be manufactured, 50 for each of the Projects, with the transport and installation of transition elements being provided by Heerema Marine Contractors Nederland SE, under a separate contract, as reported by the Issuer in current report No. 35/2024 of July 2^nd, 2024. According to the adopted schedule, the start of production is planned for the first half of 2025 and completion in mid-2026.

The Contractor’s remuneration is based on rates indexed to the inflation rate for materials and services (e.g., steel) used for production. At the time of conclusion of the Agreements, it was estimated at approximately EUR 328 million. The remuneration may also increase in the event of the launch of an optional scope of works by the Project Companies

The Agreements guarantee the Project Companies the right to terminate them at any time, subject to the obligation to pay to the Contractor fees for termination of the Agreement (from 15% to 25% of the unpaid remuneration provided for in the Agreement). The Agreements provide for a claw back mechanism, reducing the costs of possible resignation of the Project Companies from the implementation of the Projects in the event of the Contractor obtaining orders for a comparable project (reimbursement of costs up to 75% of the value of the termination fee).

Cable Installation Agreements

The Cable Installation Agreements cover the construction of a cable corridor and the installation of onshore export cables for both Projects. According to the adopted schedule, the commencement of works is planned for the last quarter of 2024, and the completion of construction works is planned for July 2026. The work schedule will be adjusted to the work schedule provided for in the Land Cable Agreements. The total remuneration of the Contractor under both Contracts (i.e., for both Projects) has been initially determined – as of the date of signing the Agreements – at approx. PLN 172.6 million. This amount is not final and may be increased during the term of the Agreements through additional works initiated at the request of the Project Companies. The remuneration is not subject to indexation.

The Agreements guarantee the Project Companies the right to terminate them also without giving the reason, in which case the Contractor is entitled to compensation for the work performed before the termination of the Agreement, if they were completed to the satisfaction of the Project Company.

Offshore Transformer Stations Agreements

The scope of work of the Agreements includes the design, purchase of materials and construction on a turnkey basis (EPC) of two offshore transformer stations, one for each of the Projects, with the transport and installation of the transformer stations being provided by Heerema Marine Contractors Nederland SE, under a separate contract, as announced by the Issuer in current report No. 35/2024 of July 2^nd, 2024. According to the adopted schedule, the first design works began in February 2024 based on the concluded reservation agreements, while the completion of the works is planned for October 2026 for MFW Bałtyk II and April 2027 for MFW Bałtyk III.

The total remuneration of the Contractor under both Contracts (i.e., for both Projects) was determined – as of the date of signing the Agreements – at approx. EUR 350 million. The remuneration is based on rates indexed with the price inflation index for materials used in the production of underwater structures and surface modules of the transformer station.

The fee for possible early termination of the Contracts by the Project Companies is directly proportional to the costs of the Contractor’s production work and the balance of completed orders, in accordance with the cost growth curve provided for in the Agreements.

Securing payments to Contractors

The Transitional Element Agreements and the Offshore Transformer Station Agreements are conditional. Their entry into force depends on the delivery of guarantees (Parent Company Guarantee) by the parties obliged to issue them. The Issuer will be obliged to provide guarantees for liabilities arising in the period until the financial institutions confirm the granting of financing for the Projects (the Companies reach financial close). As at the date of publication of this report, the maximum amount of guarantee liabilities on the Issuer’s side for both Projects in total is estimated:

– in the case of Agreements for Transitional Element– for approx. EUR 100 million;

– in the case of Agreements for Offshore Transformer Stations – for approx. EUR 51 million.

General provisions of the Agreements

The Agreements contain similar substantive provisions, standard for this type of contracts, including those concerning the detailed specification of the scope and schedule of works, the rules for terminating the Agreements, the rules of liability, including contractual penalties, as well as the guarantees of proper performance of the Contracts and the warranties for the work performed by the Contractor. The differences between the Agreements reflect the specific nature of the contract execution (marine works / land works). The content of the Agreements for both Project Companies is identical, considering the design differences of each Project.

The contracts are concluded under English law.

The conclusion of the Agreements is associated with the need for the Project Companies to incur significant capital expenditures (capex) before making the final investment decision (FID) for the Projects and before the financial institutions confirm the granting of financing for the Projects (reaching the financial close by the Companies), which is in progress.

The conclusion of the Agreements allows for the implementation of the Projects in accordance with the current schedule and maintaining interfaces with other contractors working on the Projects.

legal basis: Article 17(1) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council on market abuse and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L of 2014 No. 173, p. 1, as amended).