Confidence in state guarantees
Scholz is emphatically optimistic about Siemens Energy
November 8, 2023, 5:27 p.m
Siemens Energy has full order books – but securing large orders is increasingly a problem. The banks are cautious, and so is the former mother from Munich. Now the federal government is apparently on the verge of stepping in and the other donors are following.
Chancellor Olaf Scholz sees the talks with Siemens Energy about state guarantees for large orders on the right track. The federal government is in very constructive and very goal-oriented discussions about what a necessary security package for the order volume could look like, he said at the opening of an electrolyzer production facility run by Siemens Energy and Air Liquide in Berlin. A banking consortium and major shareholder Siemens AG are intensively involved in the discussions. “Because I expect everyone involved to do their part now,” added Scholz. “I am confident that we will come to a good solution very soon if everyone now lives up to their responsibilities.”
After the statements, Siemens Energy shares increased their gains on the stock exchange and were quoted five percent higher. A spokesman for the Ministry of Economic Affairs also said there would be a solution to the guarantees. Siemens Energy had asked the federal government for guarantees for future projects because the banks no longer wanted to handle these alone due to the energy technology group’s deteriorated credit rating and the full order book of more than 100 billion euros.
Siemens Energy benefits from the energy transition
We are talking about 15 billion euros. According to insiders, the state will guarantee eight billion euros of this, the rest will come from banks and the former parent company Siemens, which still holds 25.1 percent of the shares in Siemens Energy. Siemens, however, is cautious because it is afraid of re-involvement with the spun-off subsidiary. Banks usually provide such guarantees. But the credit institutions are unsettled by rising interest rates, the billions in losses in the wind power business and the deteriorated credit rating of Siemens Energy. At the same time, demand is increasing due to the booming business with the energy transition – so the company is practically a victim of its own success.
The federal government is convinced that Siemens Energy has excellent growth prospects, said Scholz. The company is building electrolysers at its factory in Berlin that use electricity to produce hydrogen from water and has founded a joint venture with the French gas specialist Air Liquide. In the medium term, the plant will produce electrolysers with an output of three gigawatts per year.
Siemens Energy itself expects revenues of more than one billion euros in the electrolyser business in the medium term, said the responsible Siemens Energy manager Anne-Laure de Chammard. At the same time, she called for more government support for the hydrogen economy. Projects with a volume of $300 billion have currently been announced worldwide, but only ten percent of them have been confirmed. Many banks are currently holding back from financing the projects because the technology has not yet been tested. Accordingly, state help is necessary.