EXECUTION OF CREDIT FACILITY AGREEMENT BY THE COMPANY’S SUBSIDIARY

Polish Energy Partners Spółka Akcyjna (‘Company’) hereby informs that on 10th October 2011 Grupa PEP – Biomasa Energetyczna Wschód Spółka z ograniczoną odpowiedzialnością (‘GPBEW’) – the Company’s subsidiary, and Bank PEKAO Spółka Akcyjna (‘PEKAO’) executed three credit agreements, pursuant to which GPBEW would be granted credit facility in the total amount of PLN 24 856 000 (all the tranches). The credit interest rate is variable and different for each tranche. The interest rate is equal to WIBOR plus bank margins.

The credit collateral is standard for the transaction of that type and includes in particular a pledge on GPBEW assets and shares, mortgage on GPBEW real estate, assignment of rights of the essential agreements. The documentation concerning the credit collateral will be concluded soon.
The credit facility drawdown shall be contingent upon GPBEW fulfillment of the conditions that are standard for the transaction of that type, as stipulated in the given credit agreement.

Since the credit agreements value does not exceed 10% of the Company’s equities, they were not classified as a material agreement.

The information on execution of the credit agreements shall be confidential due to the fact that the credit facility granted to GPBEW on the basis of the credit agreements shall be allocated for financing of construction and start-up of a plant for processing of straw into pellets in Zamość. The start-up of Zamość plant is planned for 2nd quarter 2012. Pellets shall be delivered as energetic biomass to Połaniec power plant (Grupa GDF Energia Polska) on the basis of the long-term contract, as described in detail in Current Report No. 38/2009. After starting up the plant in Sępólno Krajeńskie in 2009 and after starting up the plant in Ząbkowice Śląskie in 2010, it shall be the third entity of Grupa PEP manufacturing this product. Construction of the plant in Zamość is the implementation of PEP S.A. strategy for achieving a leading position in terms of energetic biomass supply to large Polish system power plants.