UPDATE ON RECENT BUSINESS ACTIVITIES AND SOLIS BOND POSITION

01 Mar 2023 14:01 CET

Dublin, 1 March 2023,

International Renewable Independent Power Producer (IPP) Alternus Energy Group
Plc (OSE: ALT) (“Alternus” or the “Company”) today updates on recent business
activities and following release of its compliance report for its wholly owned
subsidiary, Solis Bond Company DAC (“Solis”) for the year ended December 31,
2022.

On December 22, 2022 Alternus announced that the preliminary share purchase
agreement (“PSPA”) with Projekt Solartechnik Fund Fundusz Inwestycyjny Zamknięty
(the "Seller") to acquire 100 % of the shares in 32 Project Companies holding a
portfolio of 184 MW solar farms projects in Poland had been terminated. The
parties had agreed to negotiate new terms suitable to both parties for a sale of
part or all of the portfolio, in good faith, on a non-exclusive best efforts
basis, suitable to both parties for a sale of part or all of the portfolio as
soon as possible. Despite best efforts on both sides since then to consummate a
transaction it has proven too challenging to complete within the timeframes
available to both parties and this transaction will now not continue.

As part of this transaction, Solis entered into a contract to acquire the
operational portion of the Seller’s portfolio within the transaction. Under the
terms, and as permitted within the Bond terms, Solis paid deposits to the Seller
and incurred certain legal costs totaling €5.1 million.

As a result of the Company’s decision not to continue with the transaction, the
Company and certain subsidiaries including Solis will be subject to a claim from
the Seller for a contractual breakup fee to an amount of PLN 25m (approximately
EUR 5 million) under the previously terminated agreement. The Company expects
that the Seller will commence an arbitration process relating to this claim
which the Company intends to defend against.

As a result of the failure to complete the aforementioned Polish acquisition
coupled with some delays to the sale of green certificates and higher power
consumption costs in Romania due to energy market uncertainty during Q4 last
year, Solis is now in breach of all three financial covenants under the Bond
terms.

Management clearly takes this position very seriously and had fully expected
that the covenants would already be cured following completion of the above
transaction. The Company is now working to correct the position as soon as
possible. Solis intends to seek temporary waivers of the financial covenants in
its Bond terms to allow Solis to correct the position from existing operational
cashflow within 3-6 months and/or additional equity injection from Alternus.
Solis will continue to meet its payment obligations in full, and nothing in the
proposed waivers will prevent Solis from operating its business as planned,
including servicing its indebtedness going forward.

Notwithstanding the above, Alternus continues to grow and develop its sizable
owned development portfolio, which now equates to 879 MWp across Spain, Italy
and the Netherlands. The first of these projects are anticipated to reach ready
to build status by Q4, 2023 and can be funded from the existing committed and
accordion construction warehouse facility in place.

Forward Looking Statements: Certain information contained in this letter,
including any information on the Company’s plans or future financial or
operating performance and other statements that express the Company’s
management’s expectations or estimates of future performance, constitute
forward-looking statements. When used in this press release, words such as
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,”
“may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,”
“would” and similar expressions, as they relate to us or our management team,
identify forward-looking statements. Such forward-looking statements are based
on the beliefs of management, as well as assumptions made by, and information
currently available to, the Company’s management. Such statements are based on a
number of estimates and assumptions that are subject to significant business,
economic and competitive uncertainties, many of which are beyond the control of
the Company. The Company cautions that such forward-looking statements involve
known and unknown risks and other factors that may cause the actual financial
results, performance or achievements of the Company could differ materially from
the Company’s estimated future results, performance or achievements expressed or
implied by the forward-looking statements. The Company undertakes no obligation
to update these statements for revisions or changes after the date of this
release, except as required by law.

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