Switzerland And Finland Announce Credit Support For Energy Companies
Switzerland and Finland on Tuesday announced that they will be providing credit facilities to help out energy companies as surging prices for natural gas and slashed Russian deliveries continue to batter the region.
This follows Germany’s Friday announcement that it will extend a rescue package to energy supplier Uniper.
“It was necessary to stabilize Uniper now,” Chancellor Olaf Scholz told reporters in Berlin. “If I remember rightly, about 60% of gas imports in Germany are ultimately organized in a certain way via this distributor. That is a very, very big chunk, so it’s clear you can imagine that there would have been practically no company at the end of these supply chain that wouldn’t be affected.”
The Swiss government said that it will give power plant operator Axpo Holding an urgent credit line of 4 billion Swiss francs, roughly $4.1 billion, as surging energy prices “endanger Switzerland’s energy supply.”
Axpo said that the funds will help cover collateral requirements of long-term supply contracts. Wholesale electricity prices went up tenfold from a year ago and have seen wild fluctuations over the past few days.
Finland, on the other hand, said that it will be providing a 2.35 billion euro ($2.34 billion) bridge loan to state-owned energy company Fortum. The bridge loan comes on top of a 10 billion euro government package of credit for the country’s power industry that Finland announced on Sunday.
“The conditions are harsh if you compare them with the price of financing otherwise and with the arrangements of other countries, but I’m satisfied that this facility exists,” Fortum Chief Executive Markus Rauramo told Reuters. The loan carries a costly 14.2% interest rate. He added that the funds would only be used as a last resort.
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