Mr. Marc Murnaghan reports

POLARIS RENEWABLE ENERGY ANNOUNCES APPROVAL OF SO1 AGREEMENT BY FOMB

On May 8, 2026, the Financial Oversight and Management Board of Puerto Rico (FOMB) approved the battery energy storage system (BESS) standard offer agreement (SO1 agreement).

The approval of the FOMB completes the three-step approval process for the SO1 agreement, following prior regulatory approvals obtained from the Puerto Rico Energy Bureau (PREB) and the governing board of the Puerto Rico Electric Power Authority (PREPA). The SO1 agreement is intended to be executed between PREPA and Polaris Power U.S. Inc. (PPUS), a wholly owned subsidiary of Polaris.

The SO1 agreement forms part of the Puerto Rico Accelerated Storage Addition Program (ASAP), a strategic initiative aimed at strengthening grid reliability across the island through the deployment of utility-scale BESS co-located with existing generation facilities.

Under this framework, PPUS will act as the resource provider responsible for the installation and operation of the BESS, while Punta Lima Wind Farm LLC (PLWF), another subsidiary of Polaris, will continue to serve as the generation facility owner for the Punta Lima site where the storage system will be located.

Once the BESS project is constructed and fully operational, the resource provider will be entitled to receive monthly fixed and performance-based payments from PREPA in exchange for providing energy storage services, including capacity and grid support. The SO1 agreement contemplates a BESS capacity of 71.4 megawatts (35.7 MW by two). The storage capability payment price (SCPP) applicable to each billing period is $16,000 per MW per month of tested storage capability, with no price escalation during the term. The SCPP would increase to $20,600 per MW per month if PPUS does not qualify for eligible ITCs. However, pursuant to conditions included in the FOMB approval, the lower SCPP of $16,000 per MW per month would continue to apply if ITC eligibility is not achieved due to FEOC-related sourcing or procurement decisions. The term of the SO1 agreement is 20 years from the commercial operation date (COD).

Polaris is actively advancing its procurement and sourcing strategy with the objective of achieving compliance with applicable FEOC requirements and preserving ITC eligibility for the project. The company expects to provide updated estimates for capital expenditure and COD timing within approximately one month.

Marc Murnaghan, chief executive officer of Polaris, commented:

"The FOMB's approval represents the final major regulatory milestone for the SO1 agreement and an important step toward the execution and development of our battery energy storage project in Puerto Rico. We are pleased to continue advancing this strategic initiative, which is expected to support grid reliability and resilience in Puerto Rico while further enhancing the long-term value of our Punta Lima asset."

Polaris remains committed to delivering long-term, sustainable energy solutions across Latin America and the Caribbean, and looks forward to working with all stakeholders throughout the approval and implementation process.

About Polaris Renewable Energy Inc.

Polaris Renewable Energy is a Canadian publicly traded company engaged in the acquisition, development and operation of renewable energy projects in Latin America and the Caribbean. The company is a high performing and financially sound contributor to the energy transition.

The company's portfolio includes a geothermal plant (approximately 82 MW), four run-of river hydroelectric plants (approximately 39 MW), three solar (photovoltaic) projects (approximately 35 MW) and an onshore wind park (approximately 26 MW).

We seek Safe Harbor.