Commencement of negotiations with EDF Investment SAS

The Management Board of PGE Polska Grupa Energetyczna S.A. (the “Company”), with reference to current reports no. 55/2016 dated September 16, 2016 and no. 68/2016 dated November 30, 2016 on submission of the offer with partners for acquisition of assets of EDF Investment SAS (“EDF”) in Poland, discloses that on January 27, 2017 the Company jointly with ENEA S.A., Energa S.A. oraz PGNiG Termika S.A. (the “Business Partners”) has signed an agreement (the Memorandum of Understanding) with EDF concerning the negotiations on the purchase of EDF assets in Poland (the “Transaction”) and due diligence regarding this case.

The Transaction includes:

(i) acquisition of all shares of EDF in EDF Polska S.A., which is the owner of in particular: 4 CHPs i.e. Kraków, Gdańsk, Gdynia and Toruń, district heating network in Toruń, Rybnik power plant, and

(ii) acquisition of all shares of EDF in Zespół Elektrociepłowni Wrocławskich Kogeneracja S.A., which is the owner of 4 CHPs i.e. Wrocław, Zielona Góra, Czechnica and Zawidawie and district heating network in Zielona Góra, Siechnica and Zawidawie.

Business Partners agreed that the submission of the potential binding offer shall be possible after the completion of the due diligence, which will be the basis for the further decisions about the Transaction.

The Company will inform in a separate current report on the conclusion of a legally binding documentation relating to the Transaction or the completion of negotiations on the Transaction in another way.