PGNiG: Agreement on the conditions for further implementation of the ‘Construction of a CCGT Unit in Stalowa Wola’ project and annexes thereto have taken effect

Further to Current Report No. 99/2016 of October 27th 2016 on the execution of an agreement on the conditions for further implementation of the ‘Construction of a CCGT Unit in Stalowa Wola’ project (the “Project”) and annexes thereto, the Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (“PGNiG”) announces that on March 31st 2017 Elektrociepłownia Stalowa Wola S.A. (“ECSW”) repaid all liabilities towards all the financial institutions which have financed ECSW to date (i.e. the European Investment Bank, the European Bank for Reconstruction and Development, and Bank Polska Kasa Opieki S.A.) (the “Financial Institutions”) in amount of PLN 581.4m and one the payment is confirmed by the Financial Institutions the conditions precedent will be met and thus the documents referred to in Current Report No. 99/2016 and listed below will take effect:
a) agreement concerning determination of key preconditions for the Project restructuring, between PGNiG, TAURON Polska Energia S.A. (“TAURON”) and ECSW;
b) annex to the power purchase agreement of March 11th between PGNiG, TAURON and ECSW;
c) annex to the gas fuel supply agreement of March 11th 2011 between PGNiG and ECSW.
ECSW raised funds for repayment of the credit facilities under loan agreements concluded with PGNiG and TAURON (the “Sponsors”); under these loan agreements, each of the Sponsors advanced a loan of PLN 290.7m.
As the Standstill Agreement referred to in Current Report No. 99/2016 has been performed, the aforementioned financial institutions are obliged to release all the legal security interests both in ECSW’s assets and the Sponsors’ claims, and in particular to return the bank guarantees received from the Sponsors for an aggregate amount of about PLN 629m, of which PLN 314.5m represents the aggregate amount of the bank guarantees provided by PGNiG.
Notwithstanding the above, the Sponsors and ECSW are continuing their joint efforts to secure new funds for financing the construction of a CCGT Unit in Stalowa Wola project, on the terms and with a structure more favourable than those under the previous agreements.