• The European Union has tasked Brussels with drafting proposals to cap non-gas energy producers’ revenue and help power firms stay afloat.
• Several European governments had already announced measures to provide loans and guarantees to cash-strapped companies.
• Poland’s PGNiG can access up to 55 billion zloty ($11.7 billion) in Polish state guarantees to secure liquidity financing.

More European energy companies have received additional funding from governments and banks as soaring gas and power prices as a result of Russia’s invasion of Ukraine have increased margin call requirements and depleted their cash reserves.

Several European governments had already announced measures to provide loans and guarantees to cash-strapped companies before the European Union tasked Brussels on Friday with drafting proposals within a few days to cap non-gas energy producers’ revenue and help power firms stay afloat.

Utilities frequently sell power in advance but must keep a “minimum margin” deposit on hand in case of default before supplying power. This deposit has risen in tandem with rising energy prices, leaving businesses scrambling for cash, given that many businesses face limits on how much extra costs can be passed on to customers.

VNG (VNG.UL), one of Germany’s largest importers of Russian gas and a subsidiary of EnBW (EBKG.DE), requested government assistance to continue operations and absorb accumulating losses.

Poland’s PGNiG can access up to 55 billion zloty ($11.7 billion) in Polish state guarantees to secure liquidity financing. So far, the gas company has drawn 10 billion zloty in order to secure two 4.8 billion zloty loans from state-controlled banks.

The government has also established a 10 billion zloty fund for PGNiG to compensate for the difference between market gas prices and those charged to household customers – which are regulated and have been frozen by the government this year to protect retail buyers.

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