Participation by Polenergia Group in the Development Program Implemented Between BROOKFIELD POWER US HOLDING AMERICA CO. and MICROSOFT CORPORATION

The Management Board of Polenergia S.A. (the “Issuer” or the “Company”) hereby informs that on 9 October, 2024, the Issuer decided that Polenergia Group would join the Development Program established under the Framework Agreement concerning electricity (“REFA”) concluded between Brookfield Power US Holding America Co. („Brookfield”) and Microsoft Corporation („Microsoft”) on April 29, 2024, and subsequently amended on July 9, 2024 (the “Development Program”).

In connection with the above, the Issuer’s subsidiary – Polenergia Obrót S.A. („POLO”) – on 10 October, 2024, entered into a Back-to-Back Agreement with Brookfield, under which it committed to offer Microsoft, in cooperation with Brookfield, renewable projects with a total installed capacity of 100 MW (the “Projects”) (the “Back-to-Back Agreement”) in region Poland in 2026. POLO may propose offering additional Projects, which will require further consent from the counterparty. As a result, the financial settlement agreement of energy purchase (virtual power purchase agreement, “vPPA”) will be concluded with Microsoft, involving companies belonging to the Polenergia Group developing projects related to the generation of energy from renewable sources.

The Back-to-Back Agreement is the result of the Brookfield’s commitment to Microsoft under the REFA. The purpose of REFA is to establish the Development Program, under which Microsoft will purchase, among other things, all or part of the production of the Projects in accordance with the terms specified in the vPPA to be concluded under the aforementioned Program.

Under the provisions of the Back-to-Back Agreement, POLO is liable for shortfall damages in the event that it fails to fulfill its obligation to offer Microsoft Projects at least 85% of the agreed volume. POLO’s maximum liability is limited to USD 1,500,000. Based on the Back-to-Back Agreement between the Issuer and POLO, the above liability has been transferred to the Issuer. The Back-to-Back Agreement was entered into for the term of the REFA (i.e., until December 31, 2030) and is terminated if there is an early termination of the REFA or can be terminated by POLO after 31 December 2027.

The Back-to-Back agreement is made under New York State law, with the arbitration located in London.