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Germany is preparing for a worst-case scenario in which it needs to double financial aid to Uniper SE, the nation’s biggest gas supplier, to $60.14 billion.
Uniper’s financial situation is worsening with an expected adjusted net loss of $3.2 billion for the first nine months of the year as it buys more expensive wholesale gas to meet supply contracts after Moscow cut flows. Prices would have to stay high for two years for the shortfall to hit the government’s maximum projection.
The staggering figure assumes gas prices remain at highs seen during the summer months. The fuel has eased in recent weeks but is expected to surge again as soon as the weather gets cold and heating demand rises. Uniper urgently needs money to fund replacements for its supply contracts with hundreds of local German utilities.
As things stand, Uniper will receive around €31 billion from the state from a €200 billion aid package. The bailout will result in the full nationalization of the utility by the end of the year. If the law is confirmed by the German Senate on Wednesday, the funds could be transferred as soon as next week.
A spokesperson for the Economy Ministry declined to confirm the figure. Bloomberg Intelligence analyst Patricio Alvarez said €60 billion would only be conceivable in case of extremely high gas prices of about €200 for at least two years.
Germany is paying the price for building up a reliance on Russia, which supplied more than half of the country’s gas before President Vladimir Putin ordered the invasion of Ukraine. Nationalising Uniper is Germany’s biggest step to date to protect the country from blackouts and rationing this winter and beyond, and more will likely follow.
—Bloomberg