Europe props up energy firms amid liquidity crunch
FRANKFURT/OSLO — More European energy companies have secured extra funds from governments and banks as soaring gas and power prices following Russia’s invasion of Ukraine have driven up margin call requirements and burnt up their cash.
Several European governments have announced measures to provide loans and guarantees to cash-strapped companies, while European Union energy ministers were holding emergency talks on Friday on measures to calm the market.
Utilities often sell power in advance but must maintain a “minimum margin” deposit in case of default before supplying the power. This deposit has raced higher with surging power prices, leaving companies struggling to find cash, given many firms face limits on the extent extra costs can be passed to clients.
Here is a chronology of names and numbers:
Sept 9 – VNG, one of Germany’s biggest importers of Russian gas and part of EnBW, asked the government for aid to keep going and absorb accumulating losses.
Sept 8 – The Danish government said it planned to provide 100 billion Danish crowns ($13.6 billion) in guarantees to energy firms.
Sept 8 – British Prime Minister Liz Truss said a 40 billion pound ($46.5 billion) scheme will be launched to ensure energy firms are shielded from liquidity squeezes.
Sept 6 – Norway’s Equinor said in Europe, excluding Britain, total of margin calls probably amounted to more than 1.5 trillion euros ($1.51 trillion).
Sept 6 – Switzerland rushed out a financial safety net for power company Axpo, having readied provisions in April for the purpose. The measures in theory extend to sector peers Alpiq and BKW.
Sept 4 – Finland and Sweden pledged to offer 10 billion euros and 250 billion Swedish crowns ($23.7 billion), respectively, in liquidity guarantees to power companies.
Sept 6 – Finland’s Fortum signed a bridge financing arrangement with government investment company Solidium for 2.35 billion euros to cover collateral needs.
Aug 31 – Austria’s government granted a 2 billion euro credit line to the City of Vienna to help the Wien Energie power company with futures 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 requested more financial help from the German government, raising the bill for bailing out the utility to 19 billion euros. ($1 = 7.3625 Danish crowns) ($1 = 0.8597 pounds) ($1 = 0.9904 euros) ($1 = 10.5333 Swedish crowns) (Reporting by Vera Eckert and Nora Buli; Editing by Miranda Murray and Edmund Blair)