Execution of credit agreement by Company’s Subsidiary

Polish Energy Partners Spółka Akcyjna (“Company”) hereby informs that on August 27, 2009, Saturn Management Spółka z ograniczoną odpowiedzialnością i Wspólnicy, Spółka Komandytowa (“SM”), the Company’s subsidiary, and (i) BRE Bank Spółka Akcyjna (“BRE”), (ii) Bank PeKaO S.A. (“PeKaO) and (iii) European Bank for Reconstruction and Development (“EBRD”) – as lenders and (iv) Kreditanstalt fuer Wiederaufbau (“KFW”) – as the refinanced bank, executed Annex 9 to Credit Facility Agreement No. 17/010/02/D/IK dated April 10, 2002, pursuant to which the amount of credit facility available to SM will be increased by the amount of EUR 33,600,000.00, and, additionally, KFW will be refinanced by PeKaO.  The amount of the new tranche of the credit facility will be allocated for the financing of projects implemented by SM, namely Titan Project and the Modernization of EC Saturn.

As a result of executing the aforementioned annex and rendering the funds available, SM will secure full financing for the completion of Titan Project (construction of bio fuel boiler) and the Modernization Project (modernization of EC Saturn). It will make it possible to return to PEP Group the funds invested by PEP Group in the implementation of the aforementioned projects in the amount of approx. PLN 55 million. The funds will be allocated for the implementation of other renewable energy projects and the reduction of short term debt.

The completion of the two projects by SM will allow to (i) increase the profit of PEP Group generated in the Saturn Project (including, without limitation, the increase of profit generated from the production of the so-called green energy), (ii) increase the energy security of Mondi Świecie S.A. and secure the supply of process steam necessary for the proper operation of a new paper mill, (iii) reduce CO2 emissions as well as (iv) reduce energy costs for Mondi Świecie S.A.

Additionally, the Company, SM and Saturn Management Spółka z ograniczoną odpowiedzialnością (“SM Sp. z o.o.”) established security on the following assets in favour of the Lenders:

– PEP shares in SM Sp. z o.o.;
– movable property of SM;
– real property of SM;
– the rights vested in PEP as the Limited Partner of SM;
– the rights vested in SM Sp. z o.o. as the General Partner of SM; and
– bank accounts of SM.

In connection with the execution of the aforementioned annex by SM, PEP and BRE, as the security agent, executed an annex to the subordination agreement and credit support agreement.

The credit facility drawdown is contingent upon SM fulfilling certain conditions that are standard ones for the transactions of that type, as stipulated in the Credit Facility Agreement.

Due to the fact that the agreement value exceeds 10% of the Company’s equity, the agreement has been considered to be a material one.