Germany boosts energy security with $10 billion Gazprom Germania plan

BERLIN, June 14 (Reuters) – Germany will place Gazprom Germania, the energy company abandoned by Russia’s Gazprom in April, into long-term administration and support it with a loan of around 10 billion euros (10.4 billion) to help strengthen the security of Europe’s energy supplies.

The energy trading, storage and transmission business, which Gazprom abandoned after Russia invaded Ukraine in February, will be renamed Securing Energy for Europe GmbH, the German government said in a statement.

A government source said state-owned investment bank KfW would back the company with a €9-10 billion loan to ensure the continuity of a business important to Europe’s energy supply.

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The new long-term agreement will allow administrators to focus on securing the energy supply. Under the previous short-term deal, the directors’ primary duty would have been to preserve the company’s capital for its original owner, the Russian state.

German Finance Minister Christian Lindner said state-guaranteed loans would have no impact on the federal budget.

“These are just guarantees,” he said.

Gazprom Germania’s network of intertwined units includes trader Wingas and storage company Astora, which operates 6 billion cubic meters of underground gas caverns in Germany and Austria.

Britain’s Gazprom Marketing & Trading arm supplies fuel to consumers, including factories, restaurants and the National Health Service, which has raised concerns in Britain that could be mitigated by the German decision.

($1 = 0.9606 euros)

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Reporting by Thomas Escritt in Berlin and Christian Kraemer in Sofia Editing by Miranda Murray and Mark Potter

Our standards: The Thomson Reuters Trust Principles.

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