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Current Report No: 49/2018

Title: Conclusion of a memorandum of understanding concerning capital engagement in the project of preparation, construction and exploitation of the new power unit in Ostrołęka C Power Plant
Date: 2018.04.09
Report no.:  Current Report No: 49/2018

Current Report No: 49/2018

Date of preparation: 4 September 2018

Short name of issuer: ENEA S.A.

Subject: Conclusion of a memorandum of understanding concerning capital engagement in the project of preparation, construction and exploitation of the new power unit in Ostrołęka C Power Plant

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

Content of report:

The Management Board of ENEA S.A. ("Issuer"), in relation to the current report No. 37/2016 of 30 November 2016, hereby informs that on 4 September 2018 a memorandum of understanding was signed between ENEA S.A., Energa S.A., Elektrownia Ostrołęka sp. z o.o. ("Company"), and Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych Energia ("Fund"), concerning the Fund's capital engagement (by acquisition of shares in the Company's share capital) in the project of preparation, construction and exploitation of the new hard coal-fired power unit in Ostrołęka C Power Plant with approx. 1,000 MW gross power output implemented by the Company ("Memorandum of Understanding", "Project").

The Fund's engagement in the Company is subject to and depends on a number of legal, corporate and financial conditions, including on the market situation.

The Memorandum of Understanding is only a commitment to negotiate in good faith a conclusion by the Fund of an investment agreement with ENEA S.A., Energa S.A. and the Company, or the Fund's entry into the existing investment agreement, the conclusion of which was reported by the Issuer in the current report No. 42/2016 of 8 December 2016. The Memorandum of Understanding is effective from the date of its conclusion until 30 November 2018.

The Memorandum of Understanding sets out the preliminary structure of the Project's financing, whereby in total PLN 2 billion is the share capital contributed to the Company by ENEA S.A. and Energa S.A. (holding a share of PLN 1 billion each), whereby in this amount are included the funds contributed by ENEA S.A. and Energa S.A. before the date of conclusion of a potential investment agreement with the Fund, and maximum PLN 1 billion is the share capital contributed to the Company by the Fund, and the remaining amount will be contributed by other forms of financing.

The Memorandum of Understanding was concluded in connection with the procedure for obtaining a conditional certificate authorising the Company to participate in the main auction within the capacity market and may for that purpose be presented to PSE S.A.

The Issuer will inform about the conclusion of an agreement concerning the financing of the Project in a separate current report.

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.