Waselius & Wist advised the Municipal Guarantee Board in a State aid notification to the European Commission concerning liquidity support to municipal electricity companies. Under the notified aid scheme, municipalities and Municipality Finance Plc may grant loans up to EUR 5 billion on preferential terms to municipal electricity companies that are in urgent need of liquidity because of sharply increased collateral requirements in the current turmoil on the energy markets. Under the notified measure, municipal electricity companies may receive loans to cover collateral payments for derivatives exchanges (such as Nasdaq OMX Commodities), spot trading (NordPool Spot), imbalance settlement (eSETT) and bilateral trading (over-the-counter trading).
The scheme is based on the Commission’s Temporary Crisis Framework for State aid measures to support the economy following Russia’s war against Ukraine. The scheme was approved by the Commission in just four weeks and it will contribute to ensuring the security of supply in Finland by helping to avoid situations where temporary liquidity shortages would bring down otherwise solid electricity companies that are critical for the supply of electricity.
Please also view the European Commission’s press release here.