To prevent a new financial crisis, Sweden is announcing liquidity guarantees of several hundred billion Swedish kroner to Nordic and Baltic energy companies.
According to Prime Minister Magdalena Andersson, this should reduce the risk of financial instability in the Nordic region.
The announcement comes after Russia said it was cutting gas supplies through the Nord Stream 1 pipeline to Germany indefinitely, reportedly due to a leak in a turbine.
The closure is expected to lead to even higher production prices for the electricity companies when the market reopens on Monday.
Recently, power companies in several countries have notified that they are affected by increased margin requirements, E24 writes. It is a type of security or deposit that companies must provide in connection with power trading.
Energy war
The security is usually NOK 25 billion, but recently it has been up to NOK 180 billion due to the electricity price spike. Therefore, energy companies risk running into problems, even if they are financially solid.
“Russia’s energy war has serious consequences for Europe and Swedish households and businesses, especially in southern Sweden, which is dependent on electricity prices in Germany,” Andersson said during a press conference on Saturday.
“This threatens our financial stability. If we don’t act quickly, it could lead to serious disruptions in the Nordics and the Baltics,” she said further.
The guarantee scheme is scheduled to be in place on Monday before the stock exchange closes.
Source: © NTB Scanpix / #Norway Today / #NorwayTodayNews
Do you have a news tip for Norway Today? We want to hear it. Get in touch at [email protected]
Be the first to comment on "Sweden takes action against energy crisis – gives billions in liquidity guarantees to Nordic and Baltic electricity companies"