© Reuters. FILE PHOTO: A general view of Uniper’s Bierwang gas storage facility near the town of Kraiburg am Inn in Bavaria, Germany, June 10, 2022. REUTERS/Andreas Gebert
By Christoph Steitz and Andreas Rinke
FRANKFURT (Reuters) – The German government plans to buy a 30% stake in Uniper and will allow the company to pass on some of its energy costs to customers as part of a bailout package that sources told Reuters has could be completed this week.
The government also plans to quadruple the credit line for the company through the state-owned bank KfW, raising it to 8 billion euros ($8.2 billion) from 2 billion euros, according to a document from the Ministry of Economy. economy reported by Reuters.
Earlier, Reuters reported that Berlin was leaning towards taking a stake of up to 30% and a deal that would allow Uniper to pass on sky-high prices to customers.
Germany is trying to rescue Uniper, which has become a major victim of the economic standoff between the West and Russia. That stalemate has sent gas prices soaring and raised fears of severe energy shortages this winter.
To offset the accumulated loss, a combination of capital gains with a targeted federal investment of 30% in Uniper and additional mixed equity was planned.
It remains unclear how much Uniper may be allowed to pass on costs under the rescue agreement or what measures the German government can take to protect vulnerable households from sharp price increases.
Prime Minister Olaf Scholz’s government is grappling with how to share the cost of the bailout. It is in talks with Uniper’s parent company Fortum, which is largely owned by the Finnish state, which does not want Fortum to contribute more equity.
Uniper declined to comment. A German government spokesman said Germany was urgently finding a solution but declined to provide further details. The Finnish government did not immediately respond to a request for comment.
Ingrid Nestle, Greens energy and climate protection spokesman, a member of the government coalition, said: “Stability Uniper ensures gas supplies. In doing so, we are looking for ways to keep price increases for consumers as low as possible.
“However, it is clear that we cannot define an eightfold increase in the purchase price of gas.”
Shares of Uniper rose 12%, topping the German mid-cap index on Wednesday.
DEAD LOANS ONLY
Details of the bailout are still being discussed and could be worked out at a meeting with Scholz on Friday, two people familiar with the negotiations said.
Sources say no final deal has yet been agreed and the details could change as negotiations between the German and Finnish governments, Uniper and Fortum continue.
The sources added that a rescue package must be agreed by July 25, when the German utility could face more serious funding problems due to gas supplies from Russia. was cut.
Uniper, Germany’s largest Russian gas importer, is losing money daily due to being forced to buy supplies at much higher prices from alternative sources as Gazprom (MCX:) has reduced deliveries.
Germany kicked off the “alarm phase” of its emergency gas plan last month but stopped short of allowing utility companies to weather rising energy costs.
Governments across Europe are closely watching whether Russian gas flowing through the Nord Stream 1 pipeline will restart on Thursday after scheduled maintenance.
Ukraine and its allies have accused Moscow of using fake technology to cut off gas supplies to Europe in retaliation for sanctions over Russia’s invasion of Ukraine in February.
Russia has denied doing so and President Vladimir Putin has said Gazprom is ready to fulfill its obligations on gas exports.
Fortum has previously suggested barring Uniper’s German business from being controlled by the German government, and last week said it was mainly going to Berlin to find a way to stem Uniper’s losses.
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