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

The Management Board of the company under the name Polenergia S.A. (the “Issuer”) informs that on October 5, 2023, 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. OWF Bałtyk II and OWF Bałtyk III, respectively (collectively “Projects”), have concluded agreements for the design, production, testing, transport, installation and protection of export cables on the section from the offshore transformer station to the point of energy discharge on land (each individually “Agreement” or collectively the “Agreements”), although MFW Bałtyk II Sp. z o.o. concluded an Agreement with Jan De Nul Luxemburg SA Hellenic Cables S.A. Consortium Baltyk 2 general partnership, and MFW Bałtyk III Sp. z o.o. – with the company Jan De Nul Luxemburg SA Hellenic Cables S.A. Consortium Baltyk 3 general partnership (“Contractors”).

The Contractors’ Companies were established for the purposes of implementing the Agreements as a joint venture of: (i) an assembly company – Jan De Nul Luxembourg SA and (ii) a cabling manufacturer – Hellenic Cables SA Hellenic Cable Industry Single Member Societe Anonyme.

The total remuneration of the Contractors under both Agreements (i.e. for both Projects) was initially determined – as of the date of signing the Agreements – at approximately EUR 372 million. It partly includes flat rates, and partly – rates depending on the indexation of raw material prices, fuel prices and the actual workload of Contractors and the resources involved. The Contractors’ remuneration determined in this way also takes into account the optional scope of work provided for in the Agreements. The final remuneration of the Contractors will be determined in accordance with the provisions of the Agreements, based on the ultimately completed scope of work and taking into account factors depending on the market situation.

Both Agreements contain identical substantive provisions, standard for this type of contracts, including detailed definition of the scope and schedule of work, rules for terminating the Agreements, principles of liability, including contractual penalties, guarantees for proper performance of the Agreements and guarantees for the work performed. The differences between the Agreements reflect the differences of each Project.

Pursuant to the Agreements, the Issuer will be obliged to provide payment security in the form of a corporate guarantee (“PCG”). PCG issued by the Issuer will concern 50% of the value of the existing liabilities of the Project Companies towards the Contractors. The maximum expected amount of the Issuer’s liabilities under PCG is (for both Agreements jointly): (i) EUR 36 million until October 1, 2024 (purchase of raw materials), and (ii) in the further period until financial closure confirmed by the financing institution: EUR 156.5 million. The agreements provide for the need to increase the required warranty limit if the Project Companies use the additional, optional scope of work of the Contractors.

Legal basis: art. 17 section 1 Regulation (EU) No 596/2014 of the European Parliament and Council on market abuse and repealing Directive 2003/6/EC of the European Parliament and 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).