State credit guarantees for electricity producers
The Government has given the Swedish National Debt Office a mandate to provide credit guarantees for loans to electricity producers that are cleared in the electricity derivatives market by Nasdaq Clearing AB.
On 5 September 2022, the Government resolved to give to the Debt Office a mandate to issue state credit guarantees for loans to electricity producers. The assignment came in response to the exceptional price trend and volatility in the electricity market during
the spring and summer of 2022, which led to electricity producers trading in electricity derivatives needing to pledge increasingly higher collateral with Nasdaq Clearing. That could have led to liquidity problems for ultimately solvent companies, which in time could have affected the central counterparty Nasdaq Clearing AB and thereby financial stability.
According to the decision by the Government, the Debt Office may grant credit guarantees regarding new credit facilities up to and including 31 March 2023, but the Government’s decision also gives the Debt Office the possibility of extending the period by up to 6 months.
On 10 March, the Debt Office decided to extend the guarantee scheme State credit guarantees for electricity producers by 6 months, from 1 April 2023 up to and including 30 September 2023.
By doing so, the Debt Office is contributing to continuity and harmonisation with similar programmes in other Nordic countries.
The programme is designed so that the electricity producers can, if necessary, apply for a loan through their bank, which in turn applies for a credit guarantee from the Debt Office. The application form can be found below.
The assignment will be carried out in accordance with regulation (2011:211) on loans and credit guarantees.
The guarantee framework amounts to SEK 250 billion.
The guarantee covers 80 per cent of the loan, while the bank accounts for 20 per cent.
Guarantees can be granted up to and including 30 September 2023, and the total maturity may not exceed three years.
The guarantee holder shall pay a market-based fee for the credit guarantee, which is determined by the Debt Office. The guarantee fee is set individually per company and credit facility. The guarantee fee consists of the following parts: an administrative fee, a fee for expected loss, and a premium to ensure that the guarantee fee is market-based and thereby no state aid is involved.
Electricity producers that are not domiciled in Sweden, but that are clearing members of Nasdaq Clearing AB, may be granted guarantees until an equivalent form of liquidity support is established in the countries where the electricity producer has its main operations or registered office, although only until 20 September 2022 at the latest.
Electricity producers may not decide on new bonuses or other forms of variable remuneration during the life of the loan. In addition, electricity producers may not decide on dividens during the life of the loan.
Banks and electricity producers that are interested in the guarantee scheme, contact Riksgälden at: firstname.lastname@example.org.
+46 08 613 47 01, email@example.com.