Agreement with PGG for hard coal supplies

The Management Board of PGE Polska Grupa Energetyczna S.A. (“PGE”, the “Company”) discloses that on December 13, 2023 PGE has signed the agreement for supplies of hard coal (the “Agreement”) with Polska Grupa Górnicza S.A. (“PGG”).

Under the Agreement, the parties estimated the volume of hard coal supplies for PGE Górnictwo i Energetyka Konwencjonalna S.A. (“PGE GiEK”), KOGENERACJA S.A. and PGE Energia Ciepła S.A. for years 2023-2028. Total value of hard coal supplies for years 2023-2028 is estimated at PLN 13.5 billion.The price for 2024 has been agreed through negotiation and does not deviate from the conditions prevailing in the domestic market and is comparable to international market quotations (API2 index). The price conditions for subsequent years of supply will be determined by negotiation by the end of the preceding year.

As of the date of signature of the Agreement, existing contracts are terminated, i.e. a multi-year agreement, about which the Company reported in current report no. 36/2018, and agreement for units 5 and 6 at Opole Power Plant, about which the Company reported in current reports no. 82/2013 and 38/2018.

In the event of carve-out from the PGE Capital Group of conventional coal power generation assets located in PGE GiEK, PGE shall be entitled to transfer the rights and obligations under the Agreement to the entities resulting from the demerger, merger, transformation of PGE GiEK or its subsidiaries.