Belgian state to be guarantor for energy providers in need of bank loans

Due to the energy crisis, a number of energy suppliers and traders are facing financing problems for next winter. Belgian Federal Energy Minister Tinne Van der Straeten received the green light at an online cabinet meeting yesterday to adopt an emergency measure to avoid new energy market bankruptcies. 

If banks no longer want to grant them new loans, energy suppliers will be able to turn to the federal government for a state guarantee, inform the Belgian newspapers De Tijd and L'Echo this October 6. This government guarantee should allow them to find sufficient bank financing to bridge the difficult winter.

No supplier has formally requested guarantees yet, but the sector recently received signals from players who are having a hard time taking out loans. With the skyrocketing energy prices, the amounts they have to pre-finance have exploded, which has also multiplied their need for working capital and cash.

In addition, suppliers see an increase in payment defaults and payment plans at their customers and they have to advance a large part of the energy bills for the government, such as network rates, VAT and a part of the social rate, money that they can sometimes only recover months later.

Profitable companies can also run into problems if they do not receive enough credit from banks to cover their purchases for next winter.

The guarantee scheme must provide sufficient security so that banks still allow the necessary credit lines. Suppliers and intermediaries, such as electricity and gas traders, can receive a state guarantee for 70 percent of the amount to be borrowed. The risk for the bank is thus limited to 30 percent.



© BELGA PHOTO (JASPER JACOBS) Energy minister Tinne Van der Straeten during a plenary session of the Chamber at the Federal Parliament in Brussels, Thursday 22 September 2022.


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