The German government is reportedly planning to provide a loan of €10 billion ($10.4 billion) to rescue the local unit of Russia’s state-owned energy giant Gazprom, which was seized by the country’s energy regulator in April, Bloomberg reports.
On Tuesday, the government said in an emailed statement that state-owned bank KfW Group would provide the loan, part of which could eventually be converted into a direct stake under a new form of trusteeship. The exact figure was not provided.
Gazprom Germania, a subsidiary of Russian gas major Gazprom, used to operate some of the country’s largest natural gas storage facilities. The company was seized as part of the Ukraine-related sanctions on Russia. In response, Gazprom stopped supplying gas to the company, which had amounted to some 10 billion cubic meters per day, and on May 11, Gazprom Germania was the subject of sanctions from Russia. The company was subsequently shunned by trading partners and faced liquidity problems, risking the collapse of key gas retailers in Germany and the UK.