Leading Swiss energy firm granted credit to avoid cash crisis

Axpo is a publicly-owned company which produces, distributes and markets electricity and is active in international energy trading. © Keystone / Michael Buholzer

The government has agreed to give Axpo a maximum CHF4 billion ($4.1 billion) credit line in a bid to prevent a looming liquidity crisis for Switzerland’s leading energy company amid surging prices.

Energy Minister Simonetta Sommaruga said the loan was part of the government’s policy to build up energy reserves and guarantees to avoid a shortage of energy in the coming months following Russia suspending its supplies of natural gas to Europe.

She said the government decided the measure at an emergency meeting on Monday following a request by AxpoExternal link last week.

Addressing a news conference on Tuesday, Sommaruga said the aim was to prevent the risk of a cash shortage spreading further and affecting the economy and households.

“We must not let a ‘wildfire’ engulf crucial power companies,” she said. 

Benoît Revaz, director of the Federal Energy Office, said the energy companies were facing an unprecedented situation with highly volatile prices on the international energy market that is exacerbated by a lack of transparency.

Ban on dividends

Axpo, which is owned by cantons in central and eastern Switzerland, could now apply for loans under strict conditions over the next six months. They include paying a risk premium and a ban on paying out dividends.

A first request for a loan was filed by another energy company, Alpiq, late last year, but the firm never used the credit.

Parliament is due to discuss a plan for a regular bail-out package worth up to CHF10 billion for the country’s three leading energy companies during its autumn session this month.