Finnish government has proposed to provide the country’s electricity companies with loans and guarantees of up to 10 billion euros ($10 billion) to secure the sufficiency of their cash resources.
Finance Minister Annika Saarikko said at a government press conference on Sunday afternoon that with the pledge, the government wants to “calm down the electricity futures, or derivatives market and to secure the availability of electricity in Finland in all circumstances”.
“The state could grant loans or guarantees on a case-by-case basis to companies whose continued operations are critical to the functioning of society,” said Prime Minister Sanna Marin at the press conference.
The situation erupted over the weekend following information that natural gas deliveries from Russia to continental Europe through the Nord Stream One pipeline would not resume on Monday, Xinhua news agency reported.
Finland does not use Nord Stream One, but the Nordic electricity market will likely see a price increase.
The Finnish measures were thought to follow Sweden’s similar but larger announcement on Saturday.
According to the government’s proposal, the state could grant loans or guarantees to electricity companies if they are threatened with insolvency.
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A government loan would be the last resort when all other financing options have been exhausted. Only companies central to the functioning of the electricity market could receive loans or guarantees.
Mika Lintila, Economic Affairs Minister, said at the press conference that the government wants to be proactive in the situation to avoid a “Lehman Brothers” in the energy market.
Lintila underlined that the state is the last instance loaner if other channels are not available.
“The primary responsibility is with banks and the owners,” he added.
He said the policy would be available to Finnish companies only. Thus the German subsidiary of Fortum, Uniper, is not eligible for assistance from Finland.
The crisis package requires parliamentary approval. It will be taken to the parliament on Monday. Local analysts said that it has a high chance of being approved in the current situation.
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