Current Report No. 10/2018

Prepared on: 21 March 2018

Subject: Fitch Ratings affirms Energa's rating

Legal basis: Article 56 section 1 point 2 of the Act on public offering- current and periodic information

The Management Board of Energa SA (‘Company', ‘Energa') announces thaton 21 March 2018, Fitch Ratings (‘Agency', ‘Fitch') affirmed theCompany's Long-Term foreign- and local-currency Issuer Default Ratings(IDRs) at 'BBB' with a Stable Outlook, a ‘BBB' rating for the bondsissued by the Company's subsidiary Energa Finance AB (publ), and a ‘BB+'rating for Energa's hybrid bonds.

The Agency justified its decision by the dominant share of theDistribution Business Line in total planned capital expenditures and inthe Group's EBITDA, which mitigates business risks and ensurespredictability of cash flows compared to conventional production. At thesame time, the Agency factored in the business risk associated with theElektrownia Ostrołęka C project. Fitch pointed out that this risk wasmitigated by, amongst others, strategic partnership in the project'simplementation, participation of additional investors in its financingand emergence of the Power Market in Poland.

In its report, Fitch estimates that Energa SA's debt is at a moderatelevel, with a FFO-adjusted net leverage of 1.7 for 2017. The Agencyexpects this ratio to increase to 3 in 2018-2022, there still being somemargin left in relation to the maximum level of 3.5 allowed under theBBB rating.

The Agency's full report is available on the Fitch Ratings website.