MAKING A DECISION ON THE CONTINUATION OF THE RESEARCH AND DEVELOPMENT PROJECT

With reference to current report No. 30/2022 of September 23, 2022 on concluding an agreement with the National Center for Research and Development (“NCBiR”) for co-financing the project called H2 HUB Nowa Sarzyna: Green Hydrogen Storage as part of the New technologies in the field of energy I (“Project”) (“Co-financing Agreement”), the Management Board of the company under the name Polenergia S.A. (“Issuer”) informs about the decision, after evaluating the Project and obtaining the required corporate consents, to continue the Project and commence the implementation of its second phase.

The Co-financing agreement was concluded on September 23, 2022 by the Issuer, as the consortium leader, the Issuer’s subsidiary – Polenergia Elektrociepłownia Nowa Sarzyna Sp. z o.o. (“ENS”) and Wrocław University of Science and Technology (“Consortium”). Project implementation is divided into three phases. The first one, which the Issuer informed about in current report No. 30/2022, has been completed – NCBR decided to recommend the Project for the transition from phase one to phase two.

At the date of this report, the Consortium assumes that the expected total cost of expenses incurred under the second phase of the Project will be approximately PLN 14.2 mln (the amount will come from the amount of funding applied for under the second phase of the Project and the Polenergia Group’s own funds). In accordance with the application for funding, which constitutes an integral part of the Financing Agreement, the subsidy in the second phase concerns the costs planned to be incurred by ENS and Wrocław University of Science and Technology. The final value of funding in the second phase will depend on the actual costs incurred in connection with the implementation of the Project. The planned completion date for phase two of the Project is October 31, 2025.

The right to further obtain funding under the Financing Agreement (in connection with the implementation of the third phase of the Project) depends on obtaining a positive result in the selection process after verification of the second phase of the Project and approval of payment applications.

The Issuer stipulates that after the completion of the second phase of the Project, it will evaluate the Project and decide on its further implementation in the third phase and the method of financing, which may require obtaining appropriate corporate consents.

The detailed terms of the Co-financing Agreement were presented in current report No. 30/2022 and remain unchanged.

Legal basis: art. 17 section 1 of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 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, p. 1)