Germany bails out Uniper, Europe’s largest buyer of Russian gas

Germany will take a 30 percent stake in Europe’s largest Russian gas importer Uniper to save it from bankruptcy due to skyrocketing prices. “Uniper is a company that has got into big trouble,” said chancellor Olaf Scholz. “The company is of paramount importance for the economic development of this country, for the energy supply of citizens and many firms.” Scholz said the company had bought gas from many suppliers, including Russia’s Gazprom. “As we all know, these supplies are no longer secure.” Scholz said the government would provide public loans of up to 7.7 billion euros in bonds and expand a credit line from state-owned development bank KfW to 9 from 2 billion euros.

Uniper’s majority owner, Finnish utility Fortum, whose stake will be reduced to 56 from 80 percent by the bail-out, agreed to the plan. “As Germany’s largest importer of natural gas, Uniper has been hit hardest by the curtailments of Russian gas imports, and as a result is under extreme financial pressure,” Fortum said. “Uniper’s gas trading activities are critical for Germany’s energy supply and play an important role for the European energy sector. It is therefore of utmost importance to stabilise Uniper by immediately addressing the company’s loss-making and substantial liquidity needs.”

Earlier this month, Germany’s government introduced legislation to allow the state to take stakes in utilities – a move dubbed “lex Uniper” by many media. Uniper faces soaring costs to meet obligations to customers because it must procure volumes, which Russia is no longer delivering, on spot markets at much higher prices. Independent Commodity Intelligence Service (ICIS) analyst Andreas Schroeder told Clean Energy Wire at the time that state support for Uniper is the right solution as the company is “systemically relevant.” He warned that an insolvency would trigger a domino effect and shake up the entire gas industry.