Pulawy Power Plant – joint project with the PGE

| Prospects & Investment |

Pulawy Power Plant is an energy project carried on in cooperation with PGE. Together we plan to build and operate the natural gas fueled power plant with a capacity of 800 – 900 MW. It will be located in our Company’s neighbourhood, in the municipality of Pulawy.

Power plant will reduce the electricity deficit in the province of Lublin, which also means improving the country’s energy security and increasing economic development of our region. The estimated value of this investment exceeds PLN 3 billion.

Currently we are at the stage of a tender, which will appoint a consortium that will work on the project. Requests to participate in a tender procedure has been reported by ten companies, both domestic and foreign.

Following companies are interested in the project:

* Abener Energia Inc / Teyma / Mitsubishi Heavy Industries, Ltd.

* Alstom consortium of companies

* Budimex SA / Tecnicas Reunidas SA / GAMA

* China Gezhouba Group Company Ltd / Guangdong Electric Power Design Institute

* Cobra Instalaciones y Servicios SA

* Duro Felguera SA

* General Electric International Inc. / Iberdrola

* Mostostal Warszawa / Ansaldo Energia SpA

* Siemens Sp. z o.o. / Ostrich Siemens / Siemens Switzerland

* SNC-Lavalin Polska Sp. z oo / SNC – Lavalin Inc. / SNC-Lavalin Constructors Inc.

The task of the company whose tender offer wins will be building in Pulawy a complete gas and steam double unit, producing power of net value ranging from 800 MW to 900 MW together with related facilities and auxiliary. The net efficiency value of the unit in the condensation work should not fall under 57 percent.

Power station will be built in the immediate neighbourhood of our company and will have two tasks. It will drain power to the National Power System, but also provide process steam and heating water for our Plant.

A tender will be conducted according to the negotiation procedures. The contractor that wins the tender will have 36 months to complete the project.

In order to ensure the implementation of the project and the future operation of the plant, we have concluded agreements that determine the ownership structure, details of the project financing and contract on energy and heat deliveries to our Plant until 2018.