BERLIN (TSWT) — The German government has approved the nationalization of the country’s largest gas-importing company, Uniper, and is expanding state intervention in the industry to prevent an energy shortage caused by Russia’s war in Ukraine.
The deal with Uniper builds on a bailout package agreed in July and includes an EUR 8 billion (dollar) capital increase that the government will fund. As part of the agreement, the government will take a majority stake in Uniper, which until now was owned by Finland’s Fortum. The Finnish government has the largest interest in Fortum.
Uniper’s losses have increased as Russia has cut natural gas supplies to European countries that support Ukraine. Prices for the fuel needed to heat homes, generate electricity and power plants have skyrocketed, raising fears of business closures, rationing and a recession when the weather turns cold.
European countries have made efforts to counter the price spiral and have given priority to securing their energy supplies for the winter, including by filling their natural gas storage. Just last week, Germany also took control of three Russian-owned oil refineries before an embargo on Russian oil goes into effect next year.