Following the letter of Hellenic Capital Market Commission with Protocol number 2337 / 27.10.2020 and taking into consideration the observations of the Commission on the semi-annual financial report of TERNA ENERGY FINANCE S.A. (hereinafter "Company") for the period ended 30/06/2020, we would like to inform the investor community about the following:

The Company, as has been announced in detail in the published financial statements for the six-month period of 30.06.2020, is operationally supported by its sole shareholder TERNA ENERGY SA (hereinafter "the Guarantor"), which fully influences the decisions, the management and its function and exercises control over them. The Company, apart from its investment in Intragroup Bond Loans issued by the Guarantor, has no other business activity, is not active in any market and has no other assets and therefore, its ability to fulfill its contractual obligations under the Common Bond Loan, depends on the ability of the Guarantor to fulfill its contractual obligations to the Company, based on the loan agreement between them (see the relevant reference in the "Introduction" of the management report of the Board of Directors - page 5 - of the published semi-annual financial report for period ended June 30, 2020, as well as in the explanatory notes 1 "General Information about the Company" - page 18 - and 14 "Risk management" - page 29 - of the financial statements for the period).

In the above context, the report on the Main Risks & Uncertainties for the 2nd Half of 2020, as noted in page 6 of the Company's semi-annual financial report, should be read in conjunction with section E of the semi-annual report of the Board of Directors of the parent company, sole shareholder and Guarantor, TERNA ENERGY SA, of the six-month period ending on 30.06.2020, where a detailed reference is made of the risks of the TERNA ENERGY SA (hereinafter "Group").

In particular, relevant reference is made to the main risks and uncertainties for the second half of 2020, financial development & performance, the expected course & development of the second half of 2020, as well as the notifications for the COVID-19 pandemic concerning TERNA ENERGY, are analyzed in pages 13 to 19 of the semi-annual financial statements of TERNA ENERGY SA.

We briefly mention the main inherent risks and uncertainties in the activities of the TERNA ENERGY SA Group, which can be summarized as follows:

Credit risk: All trade receivables of the energy sector relate to the wider Public sector domestically (including DAPEEP and HEDNO) and abroad, while the same applies to most of the receivables coming from the construction sector. The credit risk for cash and other receivables is low, as the counterparties are banks with high quality capital structure, the State or companies of the wider Public sector or strong business groups.

Foreign exchange risk: The Group operates, in addition to Greece, in Eastern Europe and the United States of America and therefore may be exposed to foreign exchange risk that may arise from the exchange rate of the euro against other currencies. This type of risk can only arise from foreign exchange trading, from investing in financial assets in foreign currency, as well as from net investments in foreign entities.

Interest rate risk: The Group's policy is to minimize exposure to interest rate risk in terms of the long-term financing of its operations. The Group is exposed to interest rate risk arising from short-term borrowing and the part of long-term borrowing that is based on a floating interest rate.

Liquidity risk analysis: The Group's liquidity is considered satisfactory, as, in addition to the existing cash reserves, the operating wind farms create continuous, satisfactory and steady cash flows. Net cash flows during the first half of 2020 from operating activities amounted to 134 million Euros compared to 99 million Euros in the corresponding period of 2019.

Other risks and uncertainties: The Group remains exposed to short-term fluctuations in wind and hydrological data, but this does not affect the long-term efficiency of the projects, as the implementation of its investments is preceded by extensive studies concerning the long-term behavior of the above data.

The construction sector of TERNA ENERGY is subject to significant fluctuations, both in terms of turnover and profitability of individual construction projects, as the construction activity, especially of specialized companies such as TERNA ENERGY, is mainly related to renewal of the outstanding balance of construction contracts to third parties, which are mainly Public Sector entities.

The Financial Development & Performance of the Company are inextricably linked to the performance of the TERNA ENERGY Group, as mentioned in the Management Report of the Board of Directors (Section A) of the parent company.

"TERNA ENERGY Group continues to invest significant capital every year, even during major crises, such as the current COVID-19 pandemic. For the first half of 2020, the consolidated sales of the Group amounted to € 166.5 million compared to € 141.6 million in the first half of 2019, increased by 17.6%. The Group's operating profit before depreciation (EBITDA) amounted to € 108.4 million compared to € 88.3 million in the first half of 2019 increased by 22.8%, mainly due to the increase in installed capacity in the USA. Profits before taxes amounted to € 33.1 million, lower by 16.8% compared to the first half of 2019. The net profit for the year attributed to the owners of the parent company amounted to € 25.1 million, posting a drop by 16.4%. The reduction of net profit for the period attributed to the owners of the parent company by € 4.9 million was mainly due to the increase in Financial Expenses as a result of the addition of liabilities to TEI Berkshire Hathaway & TEI BAL & ANTRIM that were initially recognized in the 2nd half of 2019, therefore had no effect on the results of the comparative period 01/01-30/06/2019. Net profit excluding results from financial instruments valued at fair value and income from insurance claims amounted to € 26.6 million, increased by 19.8% compared to the first half of 2019. Finally, operating profit before depreciation and income from insurance claims amounted to € 108.1 million, increased by 26.7% compared to the first half of 2019.

The financial position of the Group remained satisfactory, as the cash and cash equivalents amounted to € 266.0 million, while the debt liabilities amounted to € 1,097.4 million, resulting in a net debt position (bank liabilities minus cash and minus blocked deposits) at the level of € 789.4 million".

Finally, regarding the Projected Course & Development for the 2nd Half of 2020, we encourage the investor community to refer to section D of the Management Report of the Board of Directors, of the financial statements of TERNA ENERGY SA (page 13). It is noted that the prospects of TERNA ENERGY Group for the second half of 2020 are positive, given that:

1.      New investments are maturing in terms of licensing and financing, which are expected to enter into a construction phase soon, allowing the Group's growth trajectory to be maintained according to its business plan.
2.      The Group, despite the current health and financial crisis, at the reporting date of the semi-annual Consolidated Financial Statements maintains satisfactory capital adequacy, profitability and liquidity and continues to be fully consistent with its liabilities to suppliers, public sector, insurance organizations and other creditors. Also, the Management considers that during the second half of 2020, the credit risk regarding the receivables from the energy sector for both the Parent Company and the other Greek companies of the Group, is limited.
3.      The Group remains exposed to short-term fluctuations in wind and hydrological data, without this affecting the long-term efficiency of its projects, as the implementation of its investments is preceded by extensive studies concerning the long-term behavior of the above factors.
4.      Management's position is that it is not possible to accurately predict what will be the developments in the Greek economy due to the pandemic and to determine those that will have the greatest impact on the operation, financial performance, cash flows and financial position of the Group. However, taking into consideration all the above, the Management ensures the maintenance of its proper operation in the Greek territory by applying procedures for continuous identification and evaluation of all risks that may arise in the near future."

In direct, continuous and systematic cooperation with the executives of the Group, the Management plans and implements measures to deal with any identified risk, in order to limit its negative effects to the minimum possible degree. TERNA ENERGY, with the consistency and the high sense of corporate social responsibility that distinguishes it, will remain a pioneer in the field of investments and will seek to maintain the growth rate of the Group according to its business plan, despite the adverse conditions that have worsened unexpectedly due to the outbreak of the COVID-19 coronavirus pandemic."

Regarding the effects of coronavirus COVID-19, a detailed report is provided in the semi-annual financial report of the Company, and particularly in the risk management section (page 30). A more detailed reference to the effects of the pandemic, as well as the measures taken by the Group is provided in section 3 "Risk Management" (page 46 of the semi-annual financial report of the period ended June 30, 2020 of TERNA ENERGY SA.). It is pointed out that no revision of assumptions and estimates by the Management was required in relation to those that were applied in the annual financial statements of TERNA ENERGY SA Group for the year 2019, due to the pandemic.

"Especially for the global health crisis due to the coronavirus pandemic (COVID ‐ 19) we note the following:

TERNA ENERGY Group holds a leading position in the field of renewable energy sources. Management's position is that the Group operates in sectors that are more defensive during the different phases of the business cycle and which investors recognize as "safe havens" that provide stable recurring cash flows even in times of turmoil and uncertainty, such as the existing one. Furthermore, the Group has already proven during the Greek financial crisis (i.e. the most difficult and longest financial crisis in Europe), its ability to grow and strengthen its market position. The public policy measures that have been taken and / or will be taken by the Greek government in order to limit the spread of COVID ‐ 19 disease, are not expected to lead to any disruption of the Group's activity.

Although the expectations regarding the impact of the pandemic on the global and Greek economy vary, Management estimates that the Group's operations, financial performance, cash flows and financial position will not be significantly affected. In any case, the Management ensures the maintenance of the smooth operation both in the Greek territory and in the other countries where the Group operates, applying procedures of continuous identification and evaluation of all risks that may arise in the near future. In direct, continuous and systematic collaboration with the Risk Managers and the executives of the Group, the Management plans and implements measures to deal with any identified risk in order to limit its negative effects to the minimum possible extent. The organizational efficiency of the Group and the continuous efforts of the Management to deploy its executives on project by project basis and special issue, depending on the required ability and experience, and regardless of the company to which these executives officially belong, have created a proven ability, flexible and effective mechanism for dealing with any possible crisis in any company of the Group where a crisis event might occur. This basic principle guidelines the immediate reaction of the Management and establishes the above mechanism for dealing with the epidemic crisis with prudence, calm and strategic perspective.

In terms of its financial position, the Group despite the current financial crisis, at the reporting date of the semi-annual condensed Consolidated Financial Statements but even today, maintains satisfactory capital adequacy, profitability and liquidity and continues to be fully consistent with its liabilities to suppliers, public sector, insurance companies, etc. creditors. In addition, it implements its ambitious investment plan and creates conditions for further development of its activities in Greece and in other foreign markets. Also, the Management considers that in 2021, the credit risk, regarding the requirements of the energy sector both for the Parent Company TERNA ENERGY SA and for the other Greek companies of the Group, is limited."