Federal Government agrees on state aid for energy suppliers

Federal Government agrees on state aid for energy suppliers
Belgium's energy providers have also been shaken by market turbulence. BELGA PHOTO DAVID STOCKMAN

On Wednesday, the Federal Government approved a proposal by Energy Minister Tinne van der Straeten (Groen) to grant state aid to energy suppliers facing bankruptcy.

Despite a growing need for cash and working capital, suppliers in the energy sector have been struggling to take out bank loans, report De Tijd and L'Echo.

One reason for this is the massive amounts of liquidity that suppliers will need to acquire in order to better protect themselves this winter from ever-rising energy prices.

To that end, Tinne van der Straeten proposed a potential royal decree to her cabinet counterparts which would see suppliers in the electricity and gas markets receive state aids that would amount to between €10,000,000 and €100 million.

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Her proposal was adopted by the Federal Government, who also agreed on a framework for state aid.

As a result, a two-year loan would be sent out by the Belgian State and would cover 70% of the amount suppliers have received from the banks during the next six to twelve months.

Furthermore, the borrower (in this case, the suppliers) would be entitled to a 4% premium.

Translation of tweet: "Due to the war in Ukraine, gas and electricity prices on the wholesale market have risen tenfold. Some energy suppliers now have to pre-finance much larger amounts. Their liquidates are quickly running out."

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