The city of Vienna decides on its own protection shield for Wien Energie worth 2 billion euros. This is intended to replace the credit line agreed with the Austrian Federal Finance Agency (OeBFA) for the same amount. This was announced by Finance Councilor Peter Hanke (SPÖ) in an interview with the APA. In addition, the parent company Wiener Stadtwerke is currently negotiating with the banks about a further credit line of 1.7 billion euros.
In this way, a total of 3.7 billion euros could be called up, Hanke emphasized. The money may only be used to secure energy transactions on the power exchange – i.e. for so-called margin payments. These caused a dramatic situation last summer. As a result of the price jumps, Wien Energie had to pay high deposits on the stock exchange for trading electricity and gas and could no longer afford it on its own.
Swirl about emergency power
Mayor Michael Ludwig (SPÖ) therefore made a total of 1.4 billion euros available from July. The liquidity bottleneck and the mayor’s emergency loans came out at the end of August, when these 1.4 billion euros also ran out. As a result, the federal government allocated a further 2 billion euros through the Federal Financing Agency. This line expires at the end of April. A new edition is not planned, Hanke emphasized.
Vienna is therefore solely responsible for the protective shield, which will come into effect from May. As Hanke emphasized, this should even accommodate stock market swings even bigger than last August. If Wien Energie needs money, it must first contact the utility company. According to the municipality, they are currently in talks with a banking consortium.
Shield with expiration date
The city’s line of credit is used only when additional funds are needed. Specifically, it is not a direct loan, but through a credit master agreement. This is also not debt-increasing, Hanke assured the APA. The credit line is financed by UniCredit.
The protective shield must remain in place for two years, an extension for another year is possible. The decision in the city council is scheduled for March 23.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
