HELSINKI —
Finland and
Switzerland offered financial backing to utility companies on Tuesday,
the latest energy firms in Europe to receive state support as gas prices have
spiked since Russia invaded Ukraine.
اضافة اعلان
The conflict has
created a cash crunch for power companies in
Europe, prompting governments in
several countries to open credit lines in recent months.
The Swiss Federal
Energy office said Tuesday that Axpo, a publicly owned Swiss electricity group,
will have access to 4 billion Swiss francs ($4.1 billion) in credit to ensure
liquidity after it requested the temporary aid last week.
“The government
responded favorably to avoid putting Switzerland’s energy supply in jeopardy,”
the office said in a statement, adding that Axpo was an electricity firm of
“systemic importance” for the country.
In Finland,
utility group Fortum said it had agreed on a bridge financing arrangement with
the state — which is also the majority owner — to “ensure access to sufficient
liquidity resources” if power prices continue to rise.
The liquidity
facility gives Fortum access to 2.35 billion euros through state-owned holding
company Solidium, but Fortum said “utilization of the arrangement is a last
resort.”
“The European
energy crisis is a result of Russia’s decision to use energy as a weapon,”
Fortum CEO Markus Rauramo said, adding that this has put his company and other
Nordic energy suppliers “in a difficult situation.”
“There is great
uncertainty in the market and energy prices have been record high,” Rauramo
said.
Gas prices have
soared since Russia invaded Ukraine.
Utilities rely on
futures markets to guarantee a certain price for their supplies. Under the
contracts, they are required to put collateral upfront.
But if prices
rise, a company is required to put up more collateral, creating a potential
cash crunch.
Fortum said the
collateral tied up
Nordic commodities exchange Nasdaq amounted to around 3.5
billion euros as of September 5.
“Regulatory
changes are urgently needed to curb the unreasonably high margining and
collateral requirements,” Rauramo said.
Europe-wide problem
Other governments in Europe have offered billions of euros in loans to
energy firms.
German energy
giant Uniper said last week it would need an additional four billion euros in
state-backed loans after already having used a nine-billion-euro credit line,
following a July deal.
Fortum, which is
the majority owner of Uniper, clarified in its statement that its arrangement
with the Finnish state could not be used to cover Uniper’s needs.
Also last week,
Austria announced a two-billion-euro loan for Wien Energie, the country’s main
electricity provider.
At the weekend,
Sweden said it would provide liquidity guarantees to Nordic and Baltic energy
companies worth up to $23 billion in a bid to prevent a financial crisis
sparked by Europe’s energy crunch.
Independently of
the agreement with Fortum, the Finnish government also proposed Sunday a rescue
package of up to 10 billion euros in loans and guarantees for energy companies
facing insolvency.
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