PROJECT COMPANIES IMPLEMENTING OFFSHORE WIND FARM CONSTRUCTION PROJECTS CONCLUDED AGREEMENTS FOR THE ENGINEERING, PROCUREMENT, CONSTRUCTION AND DELIVERY OF ONSHORE CABLES AND FOR THE LANDFALL HDD DRILLINGS

The Management Board of Polenergia S.A. (the “Issuer“) hereby informs that the project companies MFW Bałtyk II sp. z o.o. and MFW Bałtyk III sp. z o.o. (jointly: the “Project Companies“), in which the Issuer holds 50% of shares, developing – as part of a joint venture of the Issuer and Equinor Wind Power AS – projects for the construction of two offshore wind farms, i.e. MFW Bałtyk II and MFW Bałtyk III (jointly:  “Projects“), on September 11^th,  2024 concluded (each Project Company separately):

• An agreement for the engineering, procurement, construction and delivery of land cables with Tele-Fonika Kable S.A. with its registered office in Myślenice (“Tele-Fonika Kable“) (“Onshore Cables Agreements“); and
• An agreement for the Landfall HDD drillings with Visser & Smit Hanab B.V. with its registered office in Papendrecht (the Netherlands) (“Visser & Smit Hanab“) (“Landfall HDD Drillings Agreements“),

jointly as: “Agreements“, and each separately as “Agreement“.

Tele-Fonika Kable and Visser & Smit Hanab are collectively referred to as the “Contractors” and each individually as the “Contractor“.

Onshore Cables Agreements

The scope of the Onshore Cables Agreements includes the engineering, procurement, construction and delivery of onshore export cables, interconnection cables and fibre optic onshore cables, including all works related to jointing, earthing and termination of the cable line for both Projects. According to the adopted schedule, the completion of the works is planned for the first quarter of 2027 – in the case of MFW Bałtyk II and in the second quarter of 2027 – in the case of MFW Bałtyk III.

The total remuneration of the Contractor under both Onshore Cables Agreements (i.e., for both Projects) was initially determined – as of the date of signing the Agreements – at approximately PLN 139.5 million. The amount of the Contractor’s remuneration may change – in particular as a result of applying current prices of materials used to perform the Agreements, such as copper and aluminium.

The Onshore Cables Agreements guarantee the Project Companies the right to terminate them also without specifying a reason, and termination of the Agreements in this manner will involve the obligation to pay the Contractor a fee equal to 3% of the remaining remuneration and documented costs and remuneration of subcontractors related to the resignation.

In connection with the conclusion of the Onshore Cables Agreements, the Issuer will be obliged to issue guarantees for the liabilities of the Project Companies towards the Contractor arising in the period until the Companies reach financial closure. As at the date of publication of this report, the maximum amount of net liabilities guaranteed by the Issuer for both Projects under the Onshore Cables Agreements is estimated at approx. PLN 36 million in total.

Landfall HDD Drillings Agreements

As a part of the Landfall HDD Drillings Agreements, the Contractor agreed to perform four horizontal directional drillings (HDD) and install four cable ducts in the landfall area. The drillings will enable the pulling of export cables from the sea part to land. According to the adopted schedule, the works are scheduled to start in the last quarter of 2024 and be completed by the end of 2026.

The total remuneration of the Contactor under both Landfall HDD Drillings Agreements (i.e., for both Projects) was initially determined – as at the date of signing the Agreements – at approximately EUR 31 million. The final remuneration will depend on, among others: on weather conditions and possible downtime if these conditions are unfavourable.

The Landfall HDD Drillings Agreements guarantee the Project Companies the right to terminate them also without specifying a reason, and termination of the Agreements in this manner will involve the obligation to pay the Contractor a fee equal to 1% of the remaining remuneration. The Contractor is entitled to remuneration for work performed before the termination of the Agreement, if it was completed to the satisfaction of the Project Companies.

General provisions of the Agreements

The Agreements contain similar substantive provisions, standard for this type of contracts, including those concerning the detailed specification of the scope and schedule of works, the rules for terminating the Agreements, the rules of liability, including contractual penalties, as well as the guarantees of proper performance of the Agreements and the warranties for the work performed by the Contractor. The differences between the Agreements reflect the specific nature of the contract execution (marine works / land works). The content of the Agreements for both Project Companies is identical, taking into account the design differences of each Project.

The Agreements are concluded under English law.

The conclusion of the Agreements is associated with the need for the Project Companies to incur significant capital expenditures (capex) before making the final investment decision (FID) for the Projects and before the financial institutions confirm the granting of financing for the Projects (reaching the financial close by the Companies), which is in progress.

The conclusion of the Agreements allows for the implementation of the Projects in accordance with the current schedule and maintaining interfaces with other contractors working on the Projects.

Links to other contracts

The Onshore Cables Agreements and the Landfall HDD Drillings Agreements are among the last significant Agreements that complete the securing of supplies and installation of the power output infrastructure from the Projects. The Issuer informed about the conclusion of other key agreements in this regard in previous current reports: No. 42/2024 of August 30^th, 2024, No. 44/2023 of October 24^th, 2024, No. 42/2023 of October 5^th, 2023, No. 43/2022 of December 30^th, 2022.

legal basis: Article 17(1) of Regulation (EU) No. 596/2014 of the European Parliament and of the Council 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 (OJ L of 2014 No. 173, p. 1, as amended).