Europe backs energy companies amid cash crunch

FRANKFURT/OSLO – More and more European energy companies have secured additional funds from governments and banks, as soaring gas and electricity prices following Russia’s invasion of Ukraine have pushed up demand for margin call and exhausted their cash.

Several European governments had already announced measures to provide loans and guarantees to cash-strapped companies, before the European Union on Friday tasked Brussels with drafting proposals within days to cap revenues for non-gas energy producers and help electric companies stay afloat.

Utilities often sell electricity in advance but must keep a “minimum margin” deposit in case of default before supplying the electricity. This deposit has increased with soaring electricity prices, leaving companies struggling to find cash, as many companies face limits on how much additional costs can be passed on to customers.

Here is a timeline of names and numbers:

September 9 – VNGone of the largest German importers of Russian gas and part of EnBW, has asked the government for help to continue and absorb the accumulated losses.

September 8 – The Danish government announced plans to provide 100 billion Danish kroner ($13.6 billion) in guarantees to energy companies.

Sep 8 – British Prime Minister Liz Truss says a 40 billion pound ($46.5 billion) program will be launched to ensure energy companies are safe from cash shortages.

Sept. 6 – Norwegian firm Equinor said that in Europe, excluding Britain, total margin calls are likely to be over €1.5 trillion ($1.51 trillion). dollars).

September 6 – Switzerland has set up a financial safety net for the electricity company Axpo, having prepared provisions in April for this purpose. The measures theoretically extend to industry peers Alpiq and BKW.

September 6 – Finland’s Fortum has signed a bridge financing agreement with government investment firm Solidium for 2.35 billion euros ($2.39 billion) to cover collateral needs.

September 5 – Britain’s biggest energy supplier, Centrica Plc, is in talks with banks to secure billions of pounds in additional credit to meet growing demands for guarantees, the Financial Times reported.

September 4 – Finland and Sweden pledged to offer 10 billion euros and 250 billion Swedish kronor ($23.7 billion) respectively in liquidity guarantees to power companies.

September 4 – Czech Industry Minister Jozef Sikela said he had approved the demands of the Czech investment group EPH and Sev.en Energy for loans to cover margin requirements.

September 1 – The Polish PGNiG can tap up to 55 billion zlotys ($11.7 billion) in Polish state guarantees to secure liquidity funding. So far, the gas company has drawn down 10 billion zlotys to guarantee two loans of 4.8 billion zlotys each from state-controlled banks.

The government has also set up a 10 billion zloty fund for PGNiG to compensate for the difference between gas prices on the market and those the company charges to residential customers – who are regulated and have been frozen by the government this year. to protect retail buyers.

August 31 – The Austrian government has granted a €2 billion line of credit to the city of Vienna to help the electricity company Wien Energie with forward margins.

Aug. 29 – Fortum said it was in talks with the Finnish state on how to secure its liquidity needs.

Aug. 29 – Germany’s Uniper has asked the German government for additional financial aid, raising the utility bailout bill to 19 billion euros.

August 11 – RWE said it planned to bear its own losses and not revert to Germany’s provisions to help operators with a gas tax charged to all consumers. It has three syndicated loans totaling €8 billion to secure forward transactions.

July 8 – Czech state-controlled company CEZ said the Prague government would help finance the electricity and gas trade ahead of the peak of the winter season via a credit deal worth up to 3 billion euros.

($1 = 7.3625 Danish kroner)

($1 = 0.8597 pounds)

($1 = 10.5333 Swedish crowns)

($1 = 0.9827 euros)

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