Conclusion of a material agreement

The Management Board of PGE Polska Grupa Energetyczna S.A. (the “Company”, “PGE”) discloses that PGE and PGE’s subsidiaries, during the last 12 months, concluded a number of agreements with Powszechna Kasa Oszczędności Bank Polski S.A. („PKO BP”), that jointly meet the criteria of a material agreement. The aggregate value of the mentioned agreements amounts to approximately PLN 3.1 billion. The agreements are considered as material, since their aggregate value exceeds value of 10% of PGE’s equity.

The agreement with the largest value is the one concluded on January 20, 2014 (the “Agreement”) between PGE, PGE Górnictwo i Energetyka Konwencjonalna S.A. („PGE GiEK”), a PGE’s subsidiary, with PKO BP. Subject matter of the Agreement is the establishment by PKO BP of a guarantee limit for PGE GiEK to a maximum value of PLN 2,548,607,358. The beneficiary of the guarantee will be the general contractor of works associated with the construction of power units No. 5 and 6 in Opole Power Plant (investment being executed by PGE GiEK).

The Agreement provides for the award on behalf of PGE GiEK:

- guarantee of payment to a maximum value of PLN 1,300,309,875 (PGE GiEK is obliged to submit to the general contractor of units 5 and 6 at the Opole power plant guarantees of payment representing 15% of the total price of the construction of units - a guarantee from PKO BP will fulfill 75% of the obligation, the remaining amount of the payment guarantee has been provided through arrangements with other banks);

- guarantee of payment for construction works up to 100% of the guarantee line.

The Agreement is valid for a period of 67 months from the date of its conclusion.

The agreement provides securities in form of:

- a guarantee by PGE to 120% of the current amount of the guarantee;

- a statement of execution by PGE GiEK (up to 120% of the guarantee limit) and a statement of execution by PGE, as a guarantor (up to 120% of the current amount of the guarantee).

Interest resulting from a possible default liability due to guarantee will be based on WIBOR plus the bank’s margin.

The agreement does not provide for contractual penalties.

Legal ground: § 9 in connection with § 5 section 1 point 3 of the Regulation of the Minister of Finance dated February 19, 2009 on current and periodic information published by issuers of securities and on conditions under which such information may be recognized as being equivalent to information required by the regulations of law of a state which is not a member state. (Dziennik Ustaw of 2009, No. 33, item 259, as amended).