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Germany seeks huge financial boost for ailing energy companies

Germany wants to boost the state loans available to struggling energy companies by drawing on credit authorisations, already created for a relief fund during the COVID-19 pandemic, the Finance Ministry stated on Tuesday.

Some EUR 67 billion in credit authorisations are to be transferred from the WSF (Economic Stabilisation Fund) to state development bank KfW, Handelsblatt business daily reported, citing government sources.

This will bolster KfW’s ability to provide guarantees and liquidity assistance to energy companies hit by drastic reductions in gas imports from Russia, the finance ministry said.

The German cabinet is expected to approve draft legislation for the boosted credit funds on Wednesday, which will then be put to parliament.

The ministry said the WSF’s long-term borrowing authorisation suited the current situation as it was unclear how long the country’s energy woes would last.

Last week, VNG, one of Germany’s biggest importers of Russian natural gas, became the latest energy firm to ask the government for aid to stay afloat.

Like Uniper, which in July secured a government bailout, now totalling EUR 19 billion, VNG has been hit by a sharp drop in Russian gas deliveries, forcing it to fill the gap in the spot market at much higher prices.

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