Energy prices are rising and rising – and even healthy businesses could run into trouble when purchasing. The government wants to prevent that.
In view of price jumps, the federal government wants to secure the liquidity of energy companies in order to prevent an unstable supply.
This involves the financing of security payments that have to be made in energy trading. A federal hedging instrument is now starting, the finance and economics ministries announced on Friday. Specifically, there are loans from the state bank KfW, which the federal government secures with guarantees.
According to information from the German Press Agency, the federal government is granting KfW a guarantee of up to 100 billion euros for the implementation of the so-called margining rescue package. The measure is part of an aid package to cushion companies from the consequences of increased energy costs and the Ukraine war. This also includes state subsidies for energy-intensive companies.
Habeck promises support
With regard to the throttling of gas deliveries via the Nord Stream pipeline from Russia to Germany, Economics Minister Robert Habeck said: “The war in Ukraine and the last few days in particular have made it clear once again that we are freeing ourselves from the bracket of Russian imports as quickly as possible . An accelerated energy transition is the be-all and end-all.” Stable energy markets are needed for security of supply, for which companies would be supported. “Otherwise we risk an unstable energy supply.”
Companies that trade gas, electricity and emission certificates on the futures exchanges in order to control and secure their production must provide security (margining). These increase the higher the prices are. “This can become a liquidity problem for companies – in case of doubt, even if they are well positioned overall, they do not have the funds ready to do this margining,” said Habeck.
Finance Minister Christian Lindner explained that the federal government would not leave citizens or companies alone. “We help companies that have run into temporary financing difficulties due to the extreme developments on the energy markets through no fault of their own.”
Criticism came from the municipal utilities. Ingbert Liebing, general manager of the association of municipal companies, said: “That’s not enough.” It is good that the federal government supports the security measures in energy purchases. “However, this KfW program does not go far enough: it only protects the large companies that trade energy on the exchanges.” However, the majority of energy suppliers such as municipal utilities are active in over-the-counter trading, where high levels of security are also required. This could lead to liquidity bottlenecks for municipal suppliers.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
