Helsinki 5 Sep : Finnish government has suggested that it supply the country’s electric companies with guarantees and loans of as much as 10 billion euros ($10 billion) to ensure the security of the cash reserves of their companies.Finance Minister Annika Saarikko announced at an official press conference on Sunday afternoon with the agreement that the government is looking to “calm the electric futures market, also known as derivatives market, and to ensure the supply of electric power in Finland in any situation”.
“The state could make either guarantees or loans on a case by case basis to companies whose activities are vital for the proper functioning of society.” stated the Prime Minister Sanna Marin during the press conference.
The crisis erupted over the weekend after news that natural gas supplies from Russia to continental Europe via the Nord Stream One pipeline will not resume until Monday, Xinhua news agency reported.
Finland does not have Nord Stream One, but the Nordic electricity market could be subject to a price hike.
The Finnish measures were believed to be similar to Sweden’s more extensive announcement on Saturday.
According to the proposal of the government the state could offer guarantees or loans to electric companies when they’re threatened with bankruptcy.
A government loan is the last option when the other options for financing have failed.Only companies that are essential to the operation of the market for electricity can get loans or guarantee.
Mika Lintila, Economic Affairs Minister, stated at the press conference that the government is looking to take a proactive approach in the current situation to avoid an “Lehman Brothers” in the energy market.
Lintila emphasized that the state will be the only instance loaner in case other channels aren’t available.
“The main responsibility lies with banks and their owners of the banks,” he added.
He stated that the policy will be accessible only to Finnish firms only.
Therefore, Uniper, the German subsidiary of Fortum, Uniper, is not qualified to receive aid from Finland.
The crisis plan requires approval from the parliament.
It will be presented by the parliament on Monday.Local analysts believe that it is likely of getting a positive vote in the current scenario.
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