The European Commission approved Germany’s plan to nationalize Gazprom-owned energy giant SEFE Securing Energy for Europe, in an effort to alleviate the region’s natural gas supply woes.
Germany will take a 100% ownership in SEFE— a former supply unit of Gazprom previously known as Gazprom Germania, announced the country’s Economy Ministry on Monday. The European Commission granted Germany €225.6 million in aid to take over the company, as well as increase its loan size to €13.8 billion. This will bring the government’s total equity injection into SEFE to €7.7 billion, which will be distributed via a debt for equity swap.
According to the Economy Ministry, the move was crucial in preventing a forthcoming insolvency due to SEFE’s surmounting indebtedness, which threatened to “endanger the security of supply in Germany.” The EU’s biggest economy is up against a possible collapse of its energy complex, after Moscow curtailed gas shipments into the EU following the war in Ukraine. Gazprom ultimately axed the SEFE unit in April, putting the company under German trusteeship.
SEFE is now the second major gas player Germany nationalized over the past two months. Back in September, Chancellor Olaf Scholz approved a €13 billion rescue package for gas importer Uniper SE, cementing its ownership stake to 99%. The move was in response to an accumulation of €8 billion in losses for the utility company, ultimately marking the biggest bailout in Germany’s history.
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