CONCLUSION OF IMPORTANT AGREEMENTS BY PROJECT COMPANIES IMPLEMENTING OFFSHORE WIND FARM CONSTRUCTION PROJECTS

The Management Board of the company under the name Polenergia S.A. (“Issuer”), with reference to report No. 39/2023 of September 29, 2023 and 1/2024 of January 12, 2024, informs that on February 16, 2024, 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 offshore wind farm construction projects as part of a joint venture of the Issuer and Equinor Wind Power AS, i.e. MFW Bałtyk II and MFW Bałtyk III, respectively (collectively “Projects”), have concluded the agreements for the production and delivery of foundation structures for monopile wind turbines (collectively, the “Agreements”) with SIF Netherlands B.V. based in Roermond (Netherlands) (“Contractor”).

Important provisions of the Agreements

Under the Agreements, 100 monopiles will be produced, 50 for each Project, on which the wind turbines will be mounted. According to the adopted schedule, the start of production works is planned for the second quarter of 2025, and the production of the last monopiles is planned to be completed in the first quarter of 2026.

The Contractor’s total remuneration under both Agreements (i.e. for both Projects) was initially determined – as of the date of signing the Agreements – at approximately EUR 440 mln. The remuneration is based on rates indexed with the price inflation index for materials and services used in production. It may also be adjusted in connection with possible changes in the design of the foundations.

The agreements contain identical substantive provisions, standard for this type of agreements, including detailed definition of the scope and schedule of work, rules for terminating the Agreements, rules of liability, including contractual penalties, as well as guarantees provided by the Contractor for the proper performance of the Agreements and guarantees for the work performed. The fee for early termination of the Agreements by the Project Companies is directly proportional to the costs of the Contractor’s production work and the balance of completed and unpaid orders, in accordance with the cost growth curve provided for in the Agreements. The agreements provide for a clawback mechanism, reducing the costs of cancellation if the Contractor obtains orders for the same production slot.

The agreements are conditional. Their entry into force depends on the parties mutually providing sureties of the parent companies for the obligations covered by the Agreement (PCG). The conclusion of the Agreements allows for the implementation of Projects in accordance with the current schedule.

The agreements are concluded under English law.

Securing payments to the Contractor

In connection with the conclusion of the Agreements, the Issuer will be obliged to issue sureties for the liabilities of the Project Companies, including the payment of 50% of the Contractor’s costs incurred in connection with the early termination of the Agreements. As at the date of publication of this report, the maximum amount of the Issuer’s guarantee liabilities for both Projects in total is estimated at approximately EUR 170 mln, and in each case the expiry date of the Issuer’s guarantees will be the achievement of financial closure confirmed by the financing institution (loan agent).

legal basis: art. 17 section 1 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 (Journal of Laws EU L. of 2014, No. 173, page 1, as amended).