Belgium, (Brussels Morning Newspaper) The European Commission approved Denmark’s aid scheme worth 16.8 billion euro aimed at supporting energy companies.
According to the plan, Denmark will launch the guarantee scheme under the Temporary Crisis Framework to help electricity producers and natural gas distributors stay solvent.
In a statement released on Friday, the EC pointed out that the Danish Export Credit Agency (EKF) will manage the scheme and provide companies with loans and guarantees to help them provide collateral to central clearing houses.
The Commission stressed that companies can apply for loans and guarantees to cover their solvency needs for one year and added that each company’s needs will be determined through self-certification.
It pointed out that the proposed scheme is in line with EU rules as premiums and maximum loan amounts respect limits set out in the Temporary Crisis Framework, and duration of guarantees does not exceed five years.
The body added that guarantees do not exceed 80% of principal sums and will be provided by the end of 2023. According to the Commission’s assessment, the proposed scheme is appropriate, proportionate and necessary to address economic disturbances in Denmark.
New aid instrument
The EC reminded that it adopted the Temporary Crisis Framework in March this year to help EU member states support their economies in the crisis, adding that it amended the framework in July to strengthen the Winter Preparedness Package and help bloc members to move away from Russian energy imports.
The framework was amended again last month in response to soaring energy prices, with the EC stressing that the move was aimed at securing energy supply this winter.
The body reminded that, under the framework, bloc members can provide limited aid to companies in all sectors to help them remain solvent, compensate for high energy prices and more.
It pointed out that aid provided to companies to compensate for soaring energy prices “may be calculated based on either past or present consumption, taking into account the need to keep market incentives to reduce energy consumption and to ensure the continuity of economic activities.”
In addition, EU member states can use the framework to speed up their energy transitions and lower emissions of greenhouse gases.
