EC approves €40 billion German measures to recapitalise two energy companies in context of Russia’s war against Ukraine

European Commission (EC) has granted approval for Germany’s aid measures to recapitalise energy companies Securing Energy for Europe (SEFE), previously known as Gazprom Germania GmbH, and Uniper in the context of Russia’s war against Ukraine.

llustration; Courtesy of SEFE Group

On 19 December, Uniper and the German Federal Government concluded a framework agreement to concretise the measures to stabilise Uniper and now, with the EC’s approval, up to €34.5 billion German aid measure will be implemented immediately.

As informed previously, the agreement forms the basis for the state stabilisation of Uniper in the form of a capital increase of €8 billion and for the creation of authorised capital of €25 billion.

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As part of the approval, the Commission set out a number of structural remedies that Uniper must fulfil, including the divestments of assets such as an 84% stake in the Unipro business in Russia, among others.

Furthermore, Uniper said it has committed itself to a number of market-opening remedies, such as, for example, the obligation not to expand its market position in sales, to adjust its long-term gas contract portfolio, and to grant competitors access to transport and storage capacities.

Until the end of 2026, the company may also only make acquisitions that are necessary to ensure the continued viability of the company or to drive the decarbonisation of its business. The acquisitions will be subject to approval by the EC.

Uniper’s CEO Klaus-Dieter Maubach commented: “The stabilisation of Uniper has been achieved. As we have now obtained EU approval, the agreed capital measures can be implemented. We will do everything in our power to find the best owners for the assets and businesses to be sold. With the EU approval we have taken the last hurdle and now we know the conditions under which we will shape the future of Uniper. I would like to thank all those involved for the tremendous effort this year.

In a separate statement on 20 December, EC also announced its approval for a €6.3 billion German measure to recapitalise SEFE Securing Energy for Europe GmbH.

On 11 November 2022, the Commission allowed the German State to take 100% ownership of SEFE GmbH, replacing Gazprom Export LCC, in order to “safeguard the company’s viability and the security of gas supply to the German economy”.

After becoming the sole owner of SEFE, Germany notified the Commission of its plans to grant a €6.3 billion cash capital injection for the recapitalisation of the company.

As explained, this covers a large part of the expected additional costs for SEFE, which arise from buying replacement gas to meet existing contractual obligations.

SEFE also received liquidity support in the form of loans from German development bank KfW under a measure initially approved by the Commission in May 2022 and subsequently amended in August 2022. The recapitalisation measure will be granted via a debt-to-equity swap of this existing liquidity support.

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