Today, Jastrzębska Spółka Węglowa successfully finalized several months of work to raise innovative funding. Given the Company's business profile (coal mining), combined with pan-European trends indicating that only the RES sector is eligible to apply for SLL funding, it was not easy.

- SLL financing is an increasingly popular financing instrument offered by banks and used by many companies globally. But only a Polish company, JSW is the first entity from the mining sector in Central and Eastern Europe to be able to boast of raising such a "green" loan - says Tomasz Cudny, President of the JSW Management Board. - In this way JSW and the financial institutions involved in the consortium prove that the coking coal necessary for the production of steel, is not "black" but "green", because without it, it will not be possible to carry out a real climate transition of the entire continent. I would like to thank all the financing parties for their openness to our business and their understanding of the role of coking coal as a strategic raw material in the EU, as well as their courage.

The consortium of banks and other financial institutions that provided the SLL financing includes: Agencja Rozwoju Przemysłu S.A., Alior Bank S.A., Bank Gospodarstwa Krajowego, Bank Polska Kasa Opieki S.A., Powszechna Kasy Oszczędności Bank Polski S.A., PZU S.A., PZU Życie S.A. and Towarzystwo Finansowe “Silesia” sp. z o.o. An additional guarantor is the Polish export credit agency KUKE, which belongs to the Polish Development Fund group.

- We are proud to support Jastrzębska Spółka Węglowa in its ambitious sustainable transition plans. One of the pillars of PKO Bank's 2023-25 strategy is to finance the green economy and offer companies solutions that will help them remain competitive in the face of business and regulatory challenges. Sustainability-Linked Loan financing is the best example of such solutions - says Maciej Brzozowski, Vice-President of the Management Board of PKO Bank Polski, overseeing the Strategic Client and Investment Banking Area. PKO Bank Polski is the arranger, agent and security agent for this transaction.

The unique SLL formula means a form of corporate lending based on ESG goals. It means providing funding based on certain sustainability indicators. The difference between an ordinary loan and a loan under the SLL formula for JSW is of great importance - it shows that sustainable development is a priority for the entire JSW Group, and each area of the business is to pursue ambitious goals, such as:

• reduction of greenhouse gas emissions (compared to 2018) by 27% by 2026 and by 30% by 2030;
• methane capture level >=50% (by 2026);
• utilization of captured methane >95% (by 2026).

These goals were written into the agreement with the consortium of financing institutions and will be reviewed annually by an external entity. They are the same as those adopted in the Environmental Strategy announced by JSW in the fall of 2021 and the environmental investment plan developed. As part of it, the Company has already launched a Commercial Utilization of Methane Program, and also has plans to build its own photovoltaic farms.

- Bank Pekao is a leader in financing Poland's largest companies, and we want to keep strengthening this position. At the same time, we are keen to play as big a role as possible in the green transition of the Polish economy, and we are consistently striving to realize this goal. Supporting JSW in its sustainable development, significant emission reductions and utilization of methane is a natural direction for us, and extremely important for the Polish and European economy in light of shortening supply chains and strengthening local industry. JSW is a leading European producer of coking coal, recognized by the EU as a critical raw material, indispensable to the steel industry - said Jerzy Kwieciński, Vice-President of Bank Pekao S.A., responsible for corporate banking.

- Green transition and ESG are among the priorities of our new strategy “Bank for every day. Bank for the future.” Now we are proud to announce that we are among the pioneers in Central and Eastern Europe providing SLL financing to a company in the mining sector. I am happy that we can support investments that serve the transition of Polish companies. This is especially important in the case of concerns that are crucial to the functioning of the Polish economy, and JSW is one of them - says Grzegorz Olszewski, President of the Management Board of Alior Bank.

- Green transition is a strategic challenge for the Polish economy. Especially the mining sector is in need of innovative solutions and innovative financing instruments. I am pleased that we can continue to support Jastrzębska Spółka Węglowa in the new SLL formula, partnering with 7 other entities. JSW's development plans are in line with the assumptions of the Responsible Development Strategy, which, in turn, sets the goals of the Industrial Development Agency’s activities for the coming years - says President of Agencja Rozwoju Przemysłu S.A. Cezariusz Lesisz.“ARP S.A. has been working for Polish business for more than three decades, but cooperation within such a broad consortium is extremely rare and therefore so rewarding. The consolidation of Polish capital around Polish-led projects is a guarantee that the climate transition will be fair, and that the gains that come from it will strengthen the entire Polish economy - adds the ARP S.A. president.

- Towarzystwo Finansowe "Silesia" sp. z o.o. has joined the ranks of the financial institutions involved in financing JSW. Its innovative formula is in line with the changes aimed at environmental, social and economic sustainability - said Jadwiga Dyktus, President of the TFS Management Board. “SLL is a form of financing in which the margin depends in part on the agreed progress in achieving sustainability goals by the financed entity. Financial institutions play a key role in correlating the financing with ESG indicators. These financing deals, which are still unique, will become increasingly common in the years to come - she adds.

In order to raise financing under the SLL formula until 2030 and, at the same time, maintain optimal interest rates for its service, JSW, together with the consortium of financing institutions, included KUKE in the entire process. Under a program earmarked for exporters seeking financing to implement investments in Poland, KUKE can strengthen the level of collateral for the financing and reduce the associated capital requirements by issuing guarantees of up to 80% of the value of the financing - which is expected to be the case here.

- Our instruments allow us to support the expansion and development of Polish exporters both in Poland and abroad. Thanks to KUKE's guarantees, it is possible for an exporter to raise much more funds and on better terms than without them. We are particularly keen on enabling Polish companies to access financing that is used to modernize their operations toward greater competitiveness in the international market, but also to reduce their environmental impact, and such investments are being made and planned by JSW, a giant in the sale of coking coal in Europe. We believe that the investments and innovative financing made will further strengthen the Company in global supply chains and give impetus to further sustainable growth - said Katarzyna Kowalska, KUKE vice-president.

As part of JSW's financing structure, KUKE’s guarantee is dedicated specifically under the so-called environmental limit, under which the Company will make specific investments to support its climate transition.

The new SLL financing structure developed by JSW is characterized by more favorable terms compared to the loan taken for previous years, through, among other things, lower margins or debt service costs. At the same time, the granted funding amount of PLN 1.65 billion, which can be used by the Company (e.g. at the time of a market downturn beyond its control), is more than twice as high as before, with the same level of collateral. It guarantees the security of JSW's ongoing operations and its development, including the implementation of its own green transition.

- JSW should think about its future not only in the perspective of one year, but also the next 2, 3 or 5 years. Acting responsibly, the Company must be secure when it comes to its day-to-day operations. At the same time, it must undergo a process of change, making ambitious new environmental investments, which we have included in our Environmental Strategy until 2030. The attainment of all these goals will be possible precisely thanks to the SLL financing raised today - comments Robert Ostrowski, JSW's Vice-President of the Management Board for Financial Matters.

The consortium's total commitment to JSW's financing will amount to approx. PLN 1,650 million. This amount, in addition to loans in PLN, includes a term loan denominated in USD and EUR for a total equivalent to PLN 480 million. With significant revenues coming from coal and coke sales precisely in these currencies, this will reduce the cost of servicing. The final date for repayment of the last liabilities to the consortium, as stipulated in the agreements, is scheduled for 28 December 2030.

By raising SLL financing, JSW is the first Polish entity in the mining sector to confirm that by mining coking coal and coke, it is possible to strive for its own climate neutrality while providing a strategic raw material for steel production, which itself is a very important part of the overall climate transition (e.g. each windmill needs 140 tons of steel). JSW is currently the largest producer of coking coal in the European Union, and will be the only one after the closure of the mines in the Czech Republic. Therefore, the role and development of JSW are crucial in this regard.