- Germany pledged €67 billion ($ 66.9 billion) in funding to assist utility companies, the FT reported.
- The money will be redeployed from a COVID-19 bailout fund established to help companies avoid insolvency.
- Gas importers have been forced to pay higher prices as Russia reduces its flow of natural gas to Europe.
Germany has pledged €67 billion ($ 66.9 billion) in funding to assist utility companies struggling to deal with surging energy prices, the Financial Times reported Tuesday, underscoring concerns in Europe about insolvencies potentially rippling throughout the region.
Germany's state development bank KfW will be able to deploy billions of euros in loan guarantees and liquidity assistance to energy companies, officials told the FT. The money will be redeployed from a COVID-19 bailout fund that was established in 2020 to help companies stave off insolvencies as lockdown mandates forced them to halt business activities.
European gas importers have been forced to pay higher prices as Russia reduces its natural gas flows into Europe. The Kremlin recently said Russia will not restart flows of gas supplies through the Nord Stream 1 pipeline until the "collective West" lifts sanctions against Moscow for its invasion of Ukraine. The Nord Stream 1 pipeline runs under the Baltic Sea into northeastern Germany.
Germany has already made moves in aiding the energy sector. German utility giant Uniper was granted a government bailout now totaling €19 billion, the FT reported, and gas importer VNG asked for government help last week.
Earlier this month, Sweden and Finland, according to Bloomberg, created €33 billion in emergency liquidity facilities to aid struggling utility companies navigating turbulent power markets.
European Union energy ministers will hold an emergency meeting on September 30 as part of steps to approve proposals designed to drag down surging gas and power prices sweeping throughout the region.