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Current Report No.: 32/2016

Title: Information on termination/withdrawal by Enea S.A. from proprietary interest purchase agreements
Date: 2016.28.10
Report no.:  Current Report No.: 32/2016

Current Report No.: 32/2016

Date of preparation: 28.10.2016

Short name of issuer: Enea S.A.

Subject: Information on termination/withdrawal by Enea S.A. from proprietary interest purchase agreements

Legal basis: Article 17 item 1 of MAR - confidential information

Content of report:

The Management Board of Enea S.A. ("Company") informs that on 28 October 2016 the Company made representations (depending on the agreement): (i) on termination; or (ii) on withdrawal from long-term agreements on purchase of proprietary interests by the Company stemming from energy certificates of origin from renewable sources (so-called green certificates) ("Agreements").

The Agreements were concluded during 2006-2014 with the below-mentioned contractors holding installations generating energy from renewable sources ("Contractors"):

- Farma Wiatrowa Krzęcin sp. z o.o. seated in Warsaw;

- Megawind Polska sp. z o.o. seated in Szczecin;

- PGE Górnictwo i Energetyka Konwencjonalna S.A. seated in Bełchatów;

- PGE Energia Odnawialna S.A. seated in Warsaw;

- PGE Energia Natury PEW sp. z o.o. seated in Warsaw;

- "PSW" sp. z o.o. seated in Warsaw;

- in.ventus sp. z o.o. EW Śniatowo sp.k. seated in Poznań;

- Golice Wind Farm sp. z o.o. seated in Warsaw.

The Company anticipates that the Agreements should be terminated, as a rule, until the end of November 2016. The exact date of terminating individual Agreements depends on the contractual terms.

The reason for termination/withdrawal from particular Agreements by the Company was exhausting the possibilities of restoring the contract balance and equivalence of performance by the parties resulting from law amendments.

The financial result stemming from the termination of the Agreements will be avoidance by the Company of a loss being the difference between contractual prices and the market price of green certificates.

The estimated total value of Enea's contractual liabilities amounted to around PLN 1,187 million net. The above value was calculated according to the price formulas adopted in the Agreements for the period from the publication of this Report until the end of the originally anticipated terms of the Agreements.

Law amendments occurring after the execution dates of the above mentioned Agreements, in particular:

- the regulation of the Minister of Economy dated 18 October 2012 regarding the detailed scope of obligations to obtain certificates of origin and submit them for redemption, make the compensatory payment, purchase electricity and heat generated in renewable energy sources and obligation to confirm the data relating to the volume of electricity generated in a renewable energy source (J. L. of 2012 item 1229);

- the act of 20 February 2015 on renewable energy sources (J. L. of 2015 item 478) and related successive amendments and announced draft amendments to laws, i.e. in particular:

• the act of 22 June 2016 on amending the act on renewable energy sources and some other acts (J. L. of 2016 item 925); and

• draft regulation of the Minister of Energy relating to the quantitative share of the sum of electricity resulting from redeemed certificates of origin confirming electricity generation in renewable energy sources which is to be published based on the authorisation resulting from Article 12 item 5 of the act of 22 June 2016 on amending the act on renewable energy sources and some other acts,

resulted in the objective lack of a possibility of developing reliable models forecasting the prices of green certificates.

In relation to the above, in the Company's assessment, as at the date of publication of the Report, it is not possible to determine the future market value of green certificates which the Company would be obliged to acquire until the originally foreseen expiry of the Agreements' term.

The Company informs that some of its key Contractors also pointed to the fact that: (i) the amendments to law had and have some impact on the prices of green certificates; and (ii) led to the disturbance in the contract balance and equivalence of provision in long-term agreements for sale of green certificates.

Having in mind the diverse and international nature of Enea SA's shareholding, and also the provisions of the Best Practices of WSE Listed Companies, Enea SA guarantees the availability of its website also in English. In case of any interpretation doubts and discrepancies between the Polish and English versions, the Polish version shall prevail.