Berlin supports the nationalized subsidiary of Gazprom with a loan of 10 billion euros
German Finance Minister Christian Lindner said he could not speculate on the amount of the loan from German state-owned investment bank KfW (Kreditanstalt für Wiederaufbau) to save Gazprom Germania from insolvency, but sources put the amount at around 10 billion euros.
In April, Gazprom Germania, a Russian state-owned company, was placed in temporary administration following Moscow’s invasion of Ukraine. Gazprom then cut its ties with the German subsidiary, leading the government to take temporary control of it to protect the country’s gas supply.
“These are only guarantees”Mr. Lindner said during a trip to Sofia, which explains that there will be no implications for the federal budget, he added.
Gazprom Germania has played a vital role in securing energy supplies for Germany, and the loan aims to support its role in facilitating gas supplies and preventing insolvency.
“In order to guarantee security of supply, the federal government is extending and strengthening the supervision of Gazprom Germania”, has indicated Steffen Hebestreit, chief spokesperson for Chancellor Olaf Scholz, tweeted Wednesday.
“In addition, the company is granted a loan from KfW [banque d’État]. This protects it from insolvency and secures its important business operations.”he continued.
The announcement of the loan, estimated at around 10 billion euros according to AFP, sparked outrage in Germany, although the government said the money would be protected while ensuring that it “is only used for commercial activities of Gazprom Germania and to maintain gas supply and cannot go to Russia”.
A situation that has made some observers jump. “We are saving the Russian company Gazprom (!) Germania with German tax money! Why doesn’t our Chancellor directly fund Russian arms factories? », wrote Paul Ronzheimer, deputy editor of the German daily BILD, on Twitter.
Since the German government has not yet expropriated the Gazprom subsidiary, it continues to be legally owned by an unknown person somewhere in Russia, explained Klaus Müller, head of the federal network agency and director of Gazprom Germany, in april.
Securing Europe’s energy supply
Gazprom Germania, the hub of Russian gas flows to Europe, will be renamed “ Securing Energy for Europe GmbH(SEFE) in what might be considered one of the most ambitious rebranding attempts of the year.
It also signals to the market that the measures are aimed at securing the energy supply in Germany and Europe, the press release reads.
The name change follows calls by Russia’s state-owned Gazprom to “avoid any further identification of its activities with the Gazprom group”the company said on its Telegram channel in April.
Thus, Berlin is determined to keep its hands on Gazprom Germania (SEFE) and the lucrative long-term, low-cost gas contracts linked to the legal envelope of the lucrative Kremlin subsidiary.
Lower flows via Nord Stream 1
The announcement of the loan and the tightening of Berlin’s grip on the company came amid a significant 40% drop in gas flows through the Nord Stream 1 pipeline.
Gazprom cited maintenance problems as the reason for the steep drop, blaming German company Siemens for not maintaining the compressors.
“Due to the late return of gas compression units repaired by Siemens […] and technical malfunctions of the engines, only three gas compressor units can currently be used at the Portovaya compressor station”explained Gazprom, as reported by Reuters.
Siemens pointed to sanctions imposed by Canada as the reason for the delay. “Due to sanctions imposed by Canada, it is currently not possible for Siemens Energy to deliver overhauled gas turbines to the customer”said the German company.
Political observers instead noted that the drop in gas flows ahead of Berlin, tightening its grip on Gazprom Germania, soon to become SEFE, was perhaps no surprise.“No one in Berlin believes in chance”, said one of them.
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