Finland approves 10-billion-euro rescue package for energy companies

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Finland’s parliament on Wednesday approved a 10-billion-euro ($10 billion) rescue package for energy companies facing a cash crunch due to high volatility in the markets following Russia’s invasion of Ukraine.

The package, consisting of loans and guarantees, is designed to stabilize the market and help cover companies’ liquidity needs arising from increased collateral requirements for electricity futures contracts.

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The government initially announced the package after Russia said it was cutting off the Nord Stream gas pipeline to Germany indefinitely due to what it said were leaks in a turbine.

Announcing the package on September 4, the government had stressed that ensuring the effective functioning of the electricity market was “critical for the functioning of the Finnish economy, society and security of supply.”

“It is also essential for individual electricity users.”

It said Finland would continue to discuss the situation with neighbouring Sweden, which is preparing its own measures, and “promote measures to ensure the functioning and stability of the energy and derivatives markets in the EU.”

Earlier this month, utility group Fortum and the Finnish state -- which is also the majority owner -- agreed on a bridge financing arrangement to ensure access to sufficient liquidity resources if power prices continue to rise.

The liquidity facility gives Fortum access to 2.35 billion euros ($2.34 billion) through state-owned holding company Solidium, but Fortum said “utilization of the arrangement is a last resort.”

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