TERNA ENERGY

Industrial Commercial Technical Societe Anonyme

85 Mesogeion Ave., 115 26 Athens, Greece

Societe Anonyme Reg. No. 318/06/ Β /86/28

GENERAL COMMERCIAL REGISTER (GEMI) No. 000312701000

ANNUAL FINANCIAL REPORT

for the year

1 January to 31 December 2023

According to article 4 of Law 3556/2007 and relevant executive decisions of Hellenic Market Commission Board of Directors

Annual Financial Report for the Year 2023

(Amounts in thousands of Euros unless mentioned otherwise)

Annual Financial Report for the Year 2023

(Amounts in thousands of Euros unless mentioned otherwise)

(according to article 4, par. 2, Law 3556/2007)

The following representatives:

• George Peristeris, Chairman of the Board of Directors

• Emmanuel Maragoudakis, Chief Executive Officer

• George Spyrou, Executive Member of the Board of Directors

WE HEREBY DECLARE AND CERTIFY

To the best of our knowledge that:

i) The hereby annual separate and consolidated financial statements of the Company TERNA ENERGY S.A. of the annual period from January 1 st , 2023, to December 31 st , 2023, that has been prepared according to the applicable international accounting standards, reflect truly and fairly assets and liabilities, equity, and the financial results of the Company as well as the companies that has been included in the consolidation in aggregate, and

ii) The attached BoD Report provides a true and fair view of the Company’s evolution, performance, and position, as well as of the companies included in the consolidation in aggregate, including the description of the main risks and uncertainties to which they are exposed is also encompassed in the Report.

Athens , 29/04/2024

The Certifiers

Annual Financial Report for the Year 2023

(Amounts in thousands of Euros unless mentioned otherwise)

Dear Shareholders,

According to the provisions of Law 4548/2018 as well as Law 3556/2007 Article 4 par. 2(c), 6,7 & 8 and the decisions issued by the Hellenic Capital Market Commission under No. 8/754/14.4.2016 Article 2 and the Company’s Articles of Association, we are hereby presenting the annual management report of the Board of Directors for the financial year from 01/01/2023 to 31/12/2023.

This report includes the financial and non-financial report of TERNA ENERGY Group for the financial year 2023 and describes the most significant events that occurred before and after the reporting date of the financial statements. Furthermore, it provides a description of the main risks and uncertainties that the Group may face in 2024 and lists the significant transactions entered between the Company and its related parties.

A) Financial Highlights and Performance for the financial year 2023

Despite the ongoing geopolitical uncertainties, high inflation and the subsequent tight monetary policy, the Greek economy maintained in 2023 a significant part of the growth momentum of the previous year but at a slower pace compared to the post-pandemic period of the previous year. As a result, according to ELSTAT, GDP in 2023 strengthened by 2.0% year-on-year (compared to 5.9% in 2022), well above the European average (estimated growth of 0.6%). It is worth noting that the growth rate exceeds the initial estimates for 2023, which set the bar at 1.7%, indicative of the resilience and dynamism of the economy. At the component level, GDP growth is supported by consumption (contributing around 70% of GDP), which strengthened by 1.8% due to the increase in disposable income following wage/pension increases and the decline in unemployment. Still investment made a significant contribution to growth in 2023, with its growth (Gross Fixed Capital Formation) amounting to 4.0%. Finally, the growth rate of exports (+3.7%) exceeded that of imports (+2.1%) supported by the strong performance of tourism and leading to an improvement in the trade balance.

At the inflation forefront, the downward trend that started at the end of 2022 continued mainly as a consequence of the decline in international energy prices. Thus, annual inflation for 2023 stood at 3.5% based on ELSTAT data, compared with 9.6% for 2022.

In the budgetary sector, the country is expected to achieve a primary surplus of 1.1% of GDP in 2023 (compared to 0.1% in 2022 and initial estimates of 0.7% for 2023) following the robust GDP dynamics that led to both revenue growth and a reduction in expenditures related to supporting households and businesses during the 2022 energy crisis. For 2024, the target is for a primary surplus of 2.1% of GDP.

An important achievement for the Greek economy was the upgrade of the country's credit rating in 2023, which returned to investment grade after 13 years in the second half of the year since Scope (BBB), DBRS (BBB low), S&P (BBB-) and Fitch (BBB-) upgraded the Greek government's credit rating to investment grade. Consequently, Greek government bond yields as well as the spread against other government bonds have decreased (indicatively, the spread against the German bond decreased during 2023 by 84bps to 119bps).

For years to come, however, the Greek economy is expected to maintain a growth rate higher than the European average, with the latest estimates from the Bank of Greece targeting GDP growth for 2024 of 2.3% (2.9% based on the government) and 2.5% for 2025 (vs. 0.8%-1.5% for the Eurozone respectively according to the ECB). The

Annual Financial Report for the Year 2023

(Amounts in thousands of Euros unless mentioned otherwise)

Trends in the Energy Market in Greece during the year 2023

From the beginning of the year and the partial easing of geopolitical pressures, the energy market has entered a phase of normalization, with many parameters remaining volatile, however, affecting visibility in the medium term. This combined with lower demand, as a result of high prices, but also milder temperatures prevailing during the winter period, led to a continued deceleration in energy prices observed during the end of 2022 and a further decline during 2023. Indicatively, gas prices (TTF) fell from 2022 levels (average 133.7 EUR/MWh) to 44.3 EUR/MWh for 2023. In a similar pattern, the electricity price on the wholesale market showed an average price of 132.2 EUR/MWh for the year compared to 306.6 EUR/MWh for 2022.

Electricity demand in 2023 recorded a 2.3% year-on-year decline, influenced mainly by the unseasonably high temperatures that prevailed in the first months of the year (and compared to particularly low temperatures for the corresponding months of 2022) and by the measures to limit consumption by households and businesses. It is notable that in the second half of the year demand increased by 4.0%.

The reduced demand, combined with increased production from RES, led to a drop in production from thermal stations in the interconnected system (19.2% decrease in lignite production, 18.5% decrease in gas production), while hydroelectric production, marginally increased by 1.1%. Renewable Energy production increased by 8.8% in line with the increase in installed capacity, while net imports also increased, covering 9.9% of total demand (compared to 6.8% for 2022). Overall, renewables covered 43.2% of demand (historical high) compared to 38.8% for the same period in 2022. It is worth noting that including generation from large hydropower plants, total green energy production in the country met 51.3% of demand in 2023 (vs. 46.7% for 2022).

In the renewable energy sector and more especially in wind power, the installed capacity of the market at the end of 2023 amounted to 5,226 MW showing an increase of 542.8 MW (+11.6%) compared to the end of 2022. The acceleration of growth is attributed to the gradual completion of large wind investments such as the Kafirea wind farm (327MW) by TERNA Energy. In terms of market shares, according to ELETAEN data, for 2023 in Greece, TERNA Energy held 19.7% of installed wind capacity, with the second and third producers holding 14.6% and 7.8% respectively.

According to the same source, at the end of 2023, over 850 MW of new wind farms were under construction or contracted in the Greek territory, of which over 300 MW are expected to be connected to the grid within the next 12 months. To these are added a further 400 MW that have been selected in tenders or have submitted performance guarantees but do not belong to any of the above categories. Thus, total wind capacity is expected to approach 6.5 GW within the next three years.

Regarding photovoltaics, according to the latest data for the whole country (HELAPCO-FEB 2024), 2023 was a record year with 1,574 MW of new photovoltaics added to the system compared to the end of 2022 (compared to 1,397 MW added for 2022), bringing the interconnected capacity to around 7,087 MW at the end of 2023. It is worth noting, however, that only 40.2% of new installations involved projects above 1.0 MW. According to market estimates, a similar number of new PV plants are expected to be interconnected in 2023 through 2024.

Annual Financial Report for the Year 2023

(Amounts in thousands of Euros unless mentioned otherwise)

Throughout 2023, TERNA ENERGY Group continued the implementation of its investment plan with the construction of mature projects and the strengthening of its portfolio with the further maturation of projects from the existing portfolio and the addition of new projects in various stages. As part of this plan, the grid connection of the wind farm cluster at Kafirea with a total capacity of 327 MW was completed during the year, with the project now fully operational at the date of publication of the financial statements.

Moreover, for the long-duration storage project with pumped storage technology in the area of Amphilochia (680 MW), which had already started by the end of 2022, construction works are ongoing and expected to be completed within approximately three years.

As of 31/12/2023, TERNA ENERGY Group owns almost 2.500 MW of RES power plants, in operation, under construction or ready for construction in Greece, Central and Eastern Europe. Including projects in various stages of maturity, the Group's portfolio is approaching 12 GW.

Specifically, the Group's total installed capacity in Greece and abroad amounts to 1.223,8 MW.

Particularly:

a) In the energy sector the installed capacity settled as follows:

b) In the Sector of Waste Management, the Group with the company "AEIFORIKI EPIRIOUS SPSA" operates the Waste Treatment Plant of Epirus Region by implementing the Public Private Sector Partnership (PPP) project "Integrated Waste Management of Epirus Region" and with the company “Perivallontiki of Peloponnese S.A.” implements in the Peloponnese Region Public Private Sector Partnership (PPP) project "Integrated Waste Management of the Peloponnese Region" where in 2023 started its commercial operation the Integrated Waste Management Unit of Arcadia , the Waste Transfer Stations of Argolida and Corinthia and the Transitional Management Units of Messinia and Laconia, while the construction of the MSW Management Units of Messinia and Laconia is in progress, and expected to be completed within 2024. The high added value projects are implemented with the objective of providing modern waste management services, aiming at environmental protection, ensuring public health, and providing multiple benefits to