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11/27/2020 1:38:47 AM

Current Report No. 46/2020

05.10.2020 19:35

Commencement of activities aimed at issuing bonds and the conclusion of a framework (master) agreement with the European Bank for Reconstruction and Development.

TAURON Polska Energia S.A. ("Issuer") informs of a commencement of the activities aimed at issuing bonds under the bond issue program (”Bond Program”), which was disclosed by the Issuer in the current report (regulatory filing) no. 3/2020 of February 6, 2020. This will be the first issue of bonds under the Bond Program, and its assumed nominal value may reach approx. PLN 1 000 000 000. The decision on the final amount of the issue will be made by the Issuer during the book building process.

In connection with the above, on October 5, 2020, the Issuer and the European Bank for Reconstruction and Development ("EBRD") concluded a framework (master) agreement ("Framework Agreement") defining the principles of the cooperation between the Issuer and the EBRD regarding the potential purchase by the EBRD of the bonds that the Issuer is planning to issue. Under the Framework Agreement, the Issuer has undertaken to act in accordance with the standards indicated by the EBRD, including the ones with respect to the environmental and social policy, as well as the EBRD anti-corruption guidelines, and to use the proceeds obtained from the issue of the bonds to finance the investment projects in the distribution line of business indicated in the Framework Agreement.

The Issuer has undertaken to take steps that are in line with the announced strategic directions of the TAURON Group (current report no. 23/2019 of May 27, 2019), in which, among others, the following assumptions were made: a gradual decommissioning of the coal-fired units (120 MW and 200 MW units), an expansion of the renewable energy sources ("RES") portfolio and, as a result, a significant increase in the share of RES capacity and the reduction of the CO2 emissions, as well as the mitigation of the social costs stemming from the implementation of the above measures.

The conclusion of the Framework Agreement shall not constitute an obligation for the EBRD to purchase the bonds that may be issued by the Issuer. The Issuer shall also not be bound by any obligation towards the EBRD to issue the bonds.

Art. 17, section 1 of the MAR Regulation – inside information.

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