Germany finalizes bailout of energy firm Uniper
July 22, 2022
Germany has finalized a plan to bail out struggling energy firm Uniper, Chancellor Olaf Scholz confirmed on Friday.
The wholesale gas and electricity importer is threatened with bankruptcy over skyrocketing energy prices from the Ukraine war.
What are the terms of the bailout?
Scholz told a news conference in Berlin that the government will take a 30% stake in the energy firm.
Scholz added that his administration would make up to €7.7 billion ($7.8 billion) available as hybrid capital and expand a credit line to €9 billion through the state-run bank KfW.
Scholz said funds could also be made available to other struggling utility firms but that the bailout was a one-off.
"Uniper is a company of vital importance for the economic development of our country and for the energy supply of our citizens," Scholz said.
He called the agreed measures a "substantial contribution to the rescue of the company," which will allow Uniper to "stabilize into the future."
The plan "comprises a capital increase of approximately €267 million for an issue price of €1.70 per share," Uniper said in a statement.
Uniper's largest shareholder, Finnish energy firm Fortum, has signed off on the plan.
Fortum's stake is expected to be reduced significantly as a result of the bailout.
Scholz said Uniper would be allowed to pass on cost increases to its customers despite having fixed-price contracts in place.
He said German residents should expect further price increases beginning in the fall, but promised further aid for households who have problems paying their energy bills.
Why is Uniper important?
Uniper is an international energy group that sells electricity and gas to wholesale customers such as regional utility firms. It is also Germany's largest importer of Russian gas.
The firm requested state aid two weeks ago after Russian energy giant Gazprom cut gas deliveries to Europe.
Earlier this week, Uniper's CEO Klaus-Dieter Maubach said the firm had fully utilized a €2 billion credit line from KfW after being forced to secure gas supplies from other sources.
Germany remains heavily reliant on Russian gas imports, which accounted for 26% of gas consumed in June, according to the Economy Ministry.
Russia had closed the Nord Stream 1 pipeline, which runs under the Baltic Sea to Germany, for 10 days for maintenance.
Berlin had feared Moscow would permanently turn off the taps in retaliation for Western sanctions over the Ukraine war.
Nord Stream 1 did restart supplies on Thursday. but the flow is at just 40% of normal capacity.
mm/wmr (AFP, dpa, Reuters)