CONCLUSION OF CORPORATE POWER PURCHASE AGREEMENT (CPPA)

The Management Board of the company under the name Polenergia S.A. (“Issuer“), announces that on September 14, 2023, the Issuer’s subsidiary Polenergia Obrót S.A. (“POLO“) entered into the Power Purchase and Guarantee of Origin for electricity from renewable energy sources Agreement (“cPPA Agreement“) with Northvolt Systems Poland sp. z o.o., based in Gdansk (“Northvolt“). The cPPA relates to the sale of electricity and guarantee of origin of energy produced by the Szymankowo wind farm with an installed capacity of 38 MW (the “Farm“).

The cPPA Agreement was concluded for a period of 51 months. The total planned volume of electricity sales under the cPPA Agreement relates to a part of the volume projected to be produced by the Farm, which is a dedicated generation source for Northvolt, during this period. The estimated sales volume in the subsequent years of the cPPA Agreement will be an 10,500 MWh (with the possibility of an increase to 15,000 MWh). The produced energy will be sold at a fixed price. Total estimated revenues from energy sales during the term of the Agreement may amount to between PLN 26.8 million and PLN 36.7 million.

The Parties to the cPPA Agreement have been adequately indemnified, including in the event of failure to deliver energy by POLO (POLO has the right to substitute another wind farm to deliver Northvolt the amount of electricity as forecast), as well as failure to pay for energy delivered by POLO. Collaterals for the execution of the cPPA Agreement guaranteeing payment for the purchase of energy will be established within 30 days from the date of execution of the cPPA Agreement.

In the event of early termination of the cPPA Agreement (as a result of the circumstances provided for in the cPPA Agreement), the entitled party is due a termination fee in the maximum amount of PLN 10.9 million for the entire term of the cPPA Agreement, which decreases in each subsequent year of its duration.

At the same time, the Parties entered into an additional agreement that comprehensively provides for and defines the terms and conditions for commercial balancing of Northvolt’s consumption needs.

Other terms and conditions of the cPPA Agreement do not differ from standard provisions commonly used in such agreements.

Signing a multi-year power sales agreement with a customer with a stable financial position is an action that is in line with Polenergia Group’s long-term strategy of commercialization of generation sources. Such a model secures the stream of revenues realized in the Polenergia Group and makes them independent of price fluctuations in the energy market that may occur.

legal basis: Article 17(1) of the 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 EU. L. of 2014 No. 173, p. 1 as amended).