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Current Report No. 11/2020

23.03.2020 16:45

Signing of the memorandum of understanding on the preliminary terms of cooperation between TAURON and PFR with respect to investments in renewable energy sources

​TAURON Polska Energia S.A. ("TAURON") announces that on March 23, 2020 a memorandum of understanding was signed between TAURON and closed-end investment funds, a part of whose investment portfolio is managed by Polski Fundusz Rozwoju S.A. (Polish Development Fund) ("PFR"), which sets out the preliminary terms of cooperation under consideration between TAURON and PFR ("Parties") with respect to investments in renewable energy sources ("RES", "Memorandum of Understanding"). The Parties have agreed that potential investments in RES will be carried out as joint investments in companies with assets in the RES segment ("Direct Investments"), and have also allowed for investments in companies operating in the cleantech area.

The signed Memorandum of Understanding sets out the general conditions for conducting Direct Investments, with the minimum level of each PFR investment in a company 100 percent owned by TAURON ("Holding Company"), which owns a portfolio of investment projects of an appropriate size at the stage of readiness for construction ("Project Assets"), in terms of the total ultimate capital expenditures of such company, amounting to not less than PLN 50 million and will be implemented through successive capital injections for the purpose of implementing the capex projects. In addition, the Parties will be subject to a period of limitation in the disposal of shares in the Holding Companies of between 5 and 7 years from the moment PFR acquires shares in the given Holding Company ("Lock-Up Period"). The recapitalizations will each time take place in the form and proportions ensuring TAURON's ultimate share of at least 50 percent + 1 share, and PFR’s share of no more than 50 percent - 1 share.

The primary goal of the investment will target on-shore wind farm projects and photovoltaic farm projects located in Poland. The Parties envisage the possibility of acquiring an additional partner by selling shares thereto or have it join the Holding Company.

The final terms of the cooperation between the Parties with respect to the Direct Investments will each time be agreed in the transaction documentation regarding the specific investments.

The Memorandum of Understanding is intentional in its nature and does not constitute a binding commitment of the Parties, does not give rise to financial obligations, does not oblige or guarantee any of the Parties' exclusivity with respect to RES investments, nor does it preclude the possibility of their independent investments or cooperation with third parties.

The potential implementation of the goal described in the Memorandum of Understanding is in line with the update of the strategic directions announced on May 27, 2019, that complemented TAURON Group’s Strategy for 2016-2025, which provides for a significant increase in the share of low- and zero-emission sources in the structure of TAURON Group’s installed generation capacity.

Art. 17 sec 1 of MAR – inside information

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