Vienna to Replace Federal Credit Line with Own Protective Shield for Wien Energie. Vienna City Councilor Peter Hanke (SPÖ) announced on Friday that the city will establish its own protective shield for Wien Energie, with an amount of two billion euros. This fund will replace the credit line that was previously agreed with the Austrian Federal Financing Agency (OeBFA) in the same amount. In addition, Wien Energie’s parent company, Wiener Stadtwerke, is in negotiations with banks to secure a further credit line of 1.7 billion euros. If needed, a total of 3.7 billion euros could be called up from these funds.
It is important to note that these funds may only be used to secure energy transactions on the energy exchange, specifically for margin payments. These payments caused a dramatic situation last summer when Wien Energie had to deposit high security payments for trading electricity and gas on the stock exchange and was unable to raise this on its own. This resulted in Mayor Michael Ludwig (SPÖ) providing a total of 1.4 billion euros from July onwards to resolve the liquidity bottleneck, with the emergency loans becoming public at the end of August.
However, these loans were running out, and as a result, the federal government granted a further two billion euros via the Federal Financing Agency. This line expires at the end of April, and according to Hanke, there are no plans for a new edition. Vienna will now be solely responsible for the protective shield, which will come into effect from May. Hanke emphasizes that this should even be suitable for stock market swings that are larger than what was experienced last August.
If Wien Energie needs funds, it will first have to contact the public utility company. Currently, the city council is in talks with a banking consortium. The city’s line of credit is only used when additional funds are needed. Specifically, it is not a direct loan, but a credit framework agreement. Hanke assures that this agreement is not debt-increasing and that the credit line is financed by UniCredit.
The protective shield will remain in place for two years, and an extension for a further year is possible. The decision in the municipal council is scheduled for March 23.
With Wien Energie, the largest regional energy supplier in Austria, Vienna’s city council has made it clear that they are committed to securing energy transactions on the energy exchange. By establishing a protective shield of two billion euros, Vienna is taking an important step to ensure the stability of the energy market.
The funds will only be used to secure energy transactions on the energy exchange, specifically for margin payments. Last summer, Wien Energie faced a liquidity bottleneck when it had to deposit high security payments for trading electricity and gas on the stock exchange. Wien Energie could not raise this on its own, and Mayor Michael Ludwig (SPÖ) stepped in to provide emergency loans.
However, with these loans running out, the city of Vienna decided to establish its own protective shield, which will come into effect from May. Hanke emphasizes that this shield will be sufficient even for stock market swings that are larger than what was experienced last August. This demonstrates the city’s commitment to ensuring the stability of the energy market and its readiness to take action when needed.
Vienna’s decision to establish its own protective shield for Wien Energie is an important development for the energy market in Austria. The funds that will be available through this shield may only be used to secure energy transactions on the energy exchange. This will replace the federal credit line agreed with the Austrian Federal Financing Agency (OeBFA) in the same amount.