Signing of the agreement for construction of the power unit in Rybnik

The Management Board of PGE Polska Grupa Energetyczna S.A. (”PGE") discloses that on February 9, 2023 Rybnik 2050 sp. z o.o., a subsidiary of PGE, signed an agreement (the ”Agreement”) with consortium of: Polimex Mostostal S.A. (consortium leader), Siemens Energy Sp. z o.o. (consortium member), Siemens Energy Global GmbH & Co. KG (consortium member) (jointly later referred to as the “Contractor").

The subject matter of the Agreement is the performance of construction and assembly works and other works by the Contractor, in order to build a gas and steam unit in Rybnik with a gross capacity of 882 MWe. The unit will be constructed in CCGT technology in two-stage system. According to the provisions of the Agreement, the commissioning of the unit will take place by December 31, 2026.

The value of the Agreement amounts to PLN 3 050 000 000.00 net. In connection with the Agreement, a service agreement was also signed with regard to gas turbine for the period of at least 12 years starting from the commissioning date of the unit. The value of the service agreement amounts to PLN 762 484 777.60 net. Total value of all signed agreements amounts to PLN 3 812 484 777.60 net.

The Agreement provides for contractual penalties for the Contractor related to, among others, failure to meet the deadline for commissioning of the unit, failure to comply with the guaranteed net rated capacity, failure to deliver the guaranteed level of availability and failure to meet guaranteed net efficiency of the unit.

The total sum of contractual penalties resulting from all failures cannot exceed 20% of the net value of the Agreement.

In case of withdrawal from the Agreement in full or in the scope of the unfulfilled part for reasons for which one of the parties is liable under the Agreement the other party is entitled to charge the responsible party with a contractual penalty in the amount of 10% of the value of the Agreement.

The Agreement also includes an indexation clause which takes into account potential increase of the Contractor’s remuneration by half of the cumulative increase in the prices of construction and assembly production which are published on the website of the Central Statistical Office of Poland. The maximum indexation of the remuneration due to the above cannot exceed 15% of the Agreement’s value.