EXCLUSIVE Germany begins talks on urgent financial support for regional public energy providers – sources

The moon rises as electricians work atop a power pole near the lignite power plant of Neurath of German energy supplier and utility RWE, near Rommerskirchen north-west of Cologne, Germany, February 5, 2020. REUTERS/Wolfgang Rattay

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BERLIN, Sept 22 (Reuters) – The German government has opened discussions about providing financial support for scores of regional state-owned energy providers which are struggling to cope with soaring gas prices, three sources familiar with the matter said.

Ingbert Liebing, head of the German association of local utilities, VKU, said the level of financial support could reach double-digits billions of euros, adding to the government’s huge bill after spending 29 billion euros bailing out energy trader Uniper (UN01.DE). this week. read more

“We are talking about an amount up to a double-digit billions number,” Liebing said, referring to the level of support needed. “And whether that is 20, 30 or 50 billion is the secondary question for me. The most important thing is that the federal government recognizes the need for action.”

The discussions between the government and regional states are at an early stage and no rescue framework has been agreed, but one government source, asking not to be named, said it concerned “liquidity” to assist the municipal authorities in buying gas.

A spokesperson for Germany’s economy ministry said it was in contact with the country’s regional states concerning the municipal authorities, but declined to elaborate.

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Reporting By John O’Donnell; Editing by Elaine Hardcastle

Our Standards: The Thomson Reuters Trust Principles.

Tom Sims

Thomson Reuters

Covers German finance with a focus on big banks, insurance companies, regulation and financial crime, previous experience at the Wall Street Journal and New York Times in Europe and Asia.

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