EU approves Finland’s $4.9 billion loan request for power companies
MOSCOW (UrduPoint News/Sputnik – October 07, 2022) The European Commission said on Friday it had approved the Finnish government’s 5 billion euro ($4.9 billion) subsidized loan umbrella program to support oil companies. municipal electricity in the face of increased risks resulting from the conflict in Ukraine.
To enable companies to cope with the new business environment, the European Commission adopted in March the “Temporary Crisis Framework”, which sets out the conditions under which state aid, including state guarantees and loans improved, can be approved.
“In the difficult context of Russia’s unjustified war against Ukraine, this 5 billion umbrella scheme will allow Finland to provide liquidity support to municipal electricity producers and suppliers, guaranteeing the continuation of their activities and the security of supply,” said Margrethe, Executive Vice-President of the Commission. said Vestager Margrethe Vestager.
Following the Russian military operation in Ukraine and subsequent EU sanctions, wholesale electricity prices in Europe skyrocketed in the summer of 2022.
Therefore, Finnish municipal energy generation and supply companies need additional cash collateral to cover their generation in the electricity derivatives market against future price declines. The Finnish government has set up a program of subsidized loans to enable them to meet their new financial obligations. However, intervention by EU member states in the energy market must not distort competition, but respect EU state aid rules.
Finland’s financial support is “in line with the conditions set out in the temporary crisis framework”, the Commission’s press release confirmed.