Billions in loans from KfW
EnBW subsidiary VNG applies for state aid
03/13/2022, 7:16 p.m
The EnBW subsidiary Verbundnetz Gas is preparing for a failure of Russian gas supplies: According to a media report, the company will receive a loan of 5.5 billion euros from the state development bank KfW – and thus one of the largest loans ever granted.
According to a newspaper report, the EnBW subsidiary Verbundnetz Gas (VNG) has applied for state aid. The company had applied for a loan option from the state development bank KfW to cover itself in the event of a failure of Russian gas supplies, reported the “Handelsblatt” and referred to industry circles. According to the report, the company spoke of a challenging but manageable situation. It is in contact with government agencies and associations.
Initially, no comment on the report was available from VNG. Financial circles had previously said that after the utility Uniper, a second energy company had received state aid due to liquidity bottlenecks. An insider from the environment of the Federal Ministry of Finance said that the group concerned received a loan of 5.5 billion euros with a short term. It is one of the largest loans that the state development bank KfW has given to companies. The name of this group was not mentioned.
The “Handelsblatt” reported that, when asked, VNG had stated that “it cannot be completely ruled out that in the future there will be developments that could put a heavy strain on VNG’s currently comfortable financial situation”. According to the current status, the effects on the business operations and risk situation of the VNG Group are “extraordinary and challenging, but manageable”. It goes on to say: “In order to be prepared for all eventualities, VNG is in contact with the responsible authorities in the federal government and the associations.”
Also energy company Steag under pressure
Referring to industry circles, the newspaper reported that the maximum volume of the loan option applied for was the volume that the energy group Uniper had agreed with KfW. At the beginning of January, Uniper announced that it would expand the financing framework to secure its business by up to almost twelve billion euros due to the explosion in electricity and gas prices. This also includes an agreement with KfW on a credit facility of up to two billion euros, the term of which ends on April 30, 2022. The Treasury declined to comment over the weekend.
A spokesman for the Federal Ministry of Economics announced that it did not want to comment on individual cases. “I can neither confirm nor deny this. In general: KfW’s tried-and-tested liquidity instruments are available to all sectors and are particularly effective where short-term liquidity needs to be secured.” The energy company Steag is also under pressure. He also announced in January that he needed an additional amount in the low three-digit million range to secure his business with his credit line.