Finland regions

Finland launches €10 billion support program for energy companies

“According to our estimate, this [loan and guarantee scheme] would concern some thirty electricity-producing companies. It is not a question of handing out free money to businesses, but of loans granted to them under very strict conditions,” Finance Minister Annika Saarikko said in a statement on Sunday.

The proposed scheme – due to be presented to Parliament today for approval – was meant to be a ‘last resort’ financing option for companies with a generation capacity of over 100MW that would otherwise risk being insolvent, with the aim of securing Finnish security of supply.

Tripling of prices?
The Economy Ministry estimated that national energy companies had guarantees worth around 5 billion euros at the end of August and that the 10 billion euro program – which should be in place until at the end of next year – would help cover a tripling of electricity prices.

“It is great that the Finnish and Swedish governments are working quickly to stabilize the Nordic electricity derivatives market and support energy companies in this difficult time,” Finnish utility Fortum said in a statement after the move. , with Sweden also announcing a similar multi-billion euro support package.

Other Nordic countries, Norway and Denmark, had not yet launched similar measures, but government officials in both countries said they were monitoring the situation closely.

Meanwhile, several of Finland’s largest municipal utilities – Helen, Vantaan Energia and Tampereen Sahkolaitos – have told local media that they currently see no need for emergency funding.

“We are not going to ask for guarantees from the public treasury under any circumstances,” Jussi Laitinen, CEO of Tampereen Sahkolaitos, told Finnish daily Aamulehti.

“We do not see the need for emergency funding from the state at the moment. We operate in the electricity market both as a seller and a buyer, which stabilizes our situation” , Helen CFO Timo Rajala told Finnish daily Helsingin Sanomat.

Deepening of the crisis
Utilities across Europe are struggling to maintain supply as winter approaches due to soaring prices as Russia’s main supplier cut gas production due to tensions with the West in the about the war in Ukraine, compounded by its announcement on Friday of a complete shutdown of the vital Nord Stream 1 pipeline.

The current situation has seen many suppliers go bankrupt in the region, with German utility Uniper – majority-owned by Fortum – having recently received €9 billion in government support and demanding another €4 billion.

Other countries are also reacting to the crisis, with Germany announcing a support plan of 65 billion euros.