In response to Russia’s move to keep the Nord Stream 1 pipeline closed, Swedish Prime Minister Magdalena Andersson said on Saturday that her government plans to offer hundreds of billions of kroner to extend emergency liquidity support to electricity producers.
As energy prices soar–with European benchmark gas price jumping over 30% following Gazprom’s announcement of keeping the pipeline offline indefinitely due to an alleged leakage–local producers are struggling to put up with the ballooning amount of collateral to match the exchanges.
The Russian state-owned producer announced the pipeline halt on Friday after closing bell, as it was scheduled to reopen the next day at the end of its sudden three-day routine maintenance.
“Yesterday’s announcement not only risks leading to a ‘war winter’ but also threatens our financial stability,” Andersson said.
Finland also plans to follow suit, with the country’s finance minister Annika Saarikko saying that “similar preparations are already well under way.”
“Today, under the leadership of the government’s economic policy ministerial committee, we made a decision on the guarantee and loan program for electricity companies operating in the derivatives market,” Saarikko tweeted on Sunday.
The 10-billion euro program set to be valid until 2023 is said to be discretionary and “targeted to operators with production exceeding approximately 100 MW,” who the finance minister regarded as “central to the functioning of the electricity market.”
The countries’ support programs come on the heels of the European Union announcing plans to discuss measures to address soaring energy prices, including price caps and an “urgent” credit line support for producers facing high margin calls.
Information for this briefing was found via Financial Times and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.