Sweden, Finland to offer liquidity guarantees to energy companies
After Russia’s Gazprom shut down the Nord Stream 1 gas pipeline, exacerbating Europe’s energy crisis, Finland and Sweden announced plans on Sunday (September 4) to grant billions of euros in liquidity guarantees to energy companies in their countries.
Sweden intends to provide 250 billion Swedish kronor ($32 billion) in liquidity guarantees, while Finland aims to provide 10 billion euros ($14 billion).
In addition to covering all Nordic and Baltic countries for the next two weeks, the insurance in Sweden extends until March of the following year, according to Sweden’s Finance Minister Mikael Damberg.
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Electricity producers may have experienced “technical bankruptcy” on Monday in the absence of government guarantees, according to Damberg.
Lower gas supplies from Russia both before and after the invasion of Ukraine in February have already pushed up prices in Europe by around 400% over the past year, driving up energy prices.
Energy companies have experienced paper losses on their electricity futures contracts as a result of the sharp increase in electricity prices, forcing them to find money to post additional collateral in the markets.
(With input from agencies)
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