Additional Information on the Arrangement

TransAlta owns 160,398,217 RNW Shares, representing approximately 60.1% of the outstanding RNW Shares. As a result of the Arrangement, TransAlta would issue an estimated 46,441,779 TransAlta Shares, representing approximately 15% of the total number of outstanding TransAlta Shares after giving effect to the Arrangement.

RNW Shareholder Approval Requirements

The Arrangement is subject to the approval by:

• 66 2/3% of the votes cast by RNW Shareholders present in person or by proxy at a special meeting of RNW Shareholders (the “RNW Meeting”) called to consider the Arrangement; and
• a majority of the votes cast by RNW Shareholders present in person or by proxy at the RNW Meeting after excluding the votes attached to RNW Shares that, to the knowledge of RNW and its directors and senior officers, after reasonable inquiry, are beneficially owned or over which control or direction is exercised by TransAlta, the directors and senior officers of TransAlta, any TransAlta Shareholder holding more than 10% of the issued and outstanding TransAlta Shares and any other person who is an “interested party” or a “related party” of an “interested party” in relation to RNW with respect to the Arrangement within the meaning of Canadian securities laws.

Other Required Approvals

In addition to the required approvals of RNW Shareholders, closing of the Arrangement is also subject to obtaining the approval of the Court of King's Bench of Alberta, required regulatory approvals and other customary closing conditions.

Tax Treatment of RNW Shares

The exchange of RNW Shares for TransAlta Shares will generally be tax deferred, while the exchange of RNW Shares for cash will generally be a taxable disposition, in each case, for Canadian income tax purposes.

Any RNW Shareholder who receives a combination of TransAlta Shares and cash for its RNW Shares will be able to file a joint tax election that may, depending on the RNW Shareholders' own circumstances, allow for the exchange of its RNW Shares to occur on a fully tax-deferred basis for Canadian income tax purposes.

Termination Right

The Agreement provides for, among other things, a non-solicitation covenant of RNW, subject to a customary “fiduciary out” provision that entitles RNW to consider and accept a superior proposal if TransAlta does not match the superior proposal within a five-business day period. If the Agreement is terminated in certain circumstances, including if RNW enters into an agreement with respect to a superior proposal, TransAlta is entitled to a termination payment of $95,403,787.

Access to Additional Information

Copies of the Agreement will be filed by TransAlta with the U.S. Securities and Exchange Commission and the Canadian securities regulators, and will be available for viewing at www.sec.gov and www.sedar.com. The Circular, as well as other filings containing information about the Arrangement including the Agreement, will also be available for viewing under RNW's profile on www.sedar.com. All RNW shareholders are urged to read the Circular once available as it will contain additional important information concerning the Arrangement.

RNW Independent Review Process

The Arrangement is the result of an independent and comprehensive review process. The Board of Directors of RNW (the “RNW Board”) delegated to a special committee consisting solely of independent directors of RNW (the “RNW Special Committee”) the authority to, among other things, review, evaluate and negotiate the Arrangement on behalf of RNW. National Bank Financial Inc. (“NBF”) and TD Securities Inc. (“TD”), acting as independent financial advisors to the RNW Special Committee, have each provided their verbal opinions to the RNW Special Committee (subject to certain assumptions and qualifications) that the Arrangement is fair from a financial point of view to the RNW Shareholders (the “RNW Opinions”), without consideration to TransAlta and any affiliate thereof. NBF has also prepared a formal valuation of the RNW Shares (the “Formal Valuation”), and based upon their analysis and subject to the various assumptions, qualifications, and limitations to be set forth in its written valuation report, in addition to other factors that it considered relevant, the fair market value of a RNW Share as of July 10, 2023, was in the range of $12.25 and $13.60.

The RNW Special Committee, after considering the terms of the Arrangement, the RNW Opinions, the Formal Valuation, advice of its independent financial and legal advisors and other relevant matters, recommended to the RNW Board that it determine that the Arrangement is in the best interests of RNW and fair to RNW Shareholders (without consideration to TransAlta and any affiliate thereof), approve the execution and delivery of the Agreement and recommend that RNW Shareholders vote in favour of the Arrangement.

After considering, among other things, the recommendation of the RNW Special Committee and its receipt of the RNW Opinions and the Formal Valuation, the RNW Board (with four directors who are not independent abstaining) unanimously determined that the Arrangement is in the best interests of RNW and is fair to the RNW shareholders (without consideration to TransAlta and any affiliate thereof), approved the execution and delivery of the Agreement and unanimously recommends that RNW Shareholders vote in favour of the Arrangement.

TransAlta Review Process

RBC Dominion Securities Inc. (“RBC Capital Markets”), acting as financial advisor to TransAlta, provided a verbal opinion, as of July 10, 2023, to the Board of Directors of TransAlta (subject to assumptions and qualifications) that the consideration to be paid by TransAlta pursuant to the Arrangement is fair from a financial point of view to TransAlta (the “TransAlta Fairness Opinion”). After considering, among other things, the TransAlta Fairness Opinion, the TransAlta Board determined that the Arrangement is in the best interests of TransAlta and approved the execution and delivery of the Agreement.

Advisors

RBC Capital Markets is acting as financial advisor to TransAlta. Norton Rose Fulbright Canada LLP is acting as legal advisor to TransAlta.

National Bank Financial and TD Securities are acting as financial advisors to the RNW Special Committee. Stikeman Elliott LLP is acting as legal advisor to the RNW Special Committee.