State aid: Commission approves €5 billion Finnish umbrella scheme to support municipal electricity producers and suppliers in the context of Russia’s war against Ukraine

The European Commission has approved a €5 billion Finnish subsidised loan umbrella scheme to support municipal electricity producers and suppliers in the context of Russia’s war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022, and amended on 20 July 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the EU economy is experiencing a serious disturbance. The measure will be open to municipal electricity companies that: (i) produce or supply electricity; (ii) engage in hedging operations; and (iii) are affected by the current crisis. Under the scheme, the aid will take the form of subsidised loans to be granted by either the Municipality Finance Plc or the Finnish municipalities.The maximum loan amount per beneficiary cannot exceed either (i) 15% of the beneficiary’s average total annual turnover over the last three closed accounting periods; or (ii) the liquidity needs derived from the additional collateral requirements for the coming 12 months. The Commission concluded that the Finnish subsidised loan umbrella scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis Framework. On this basis, the Commission approved the aid measure under EU State aid rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: In the difficult context of Russia’s unjustified war against Ukraine, this €5 billion umbrella scheme will enable Finland to provide liquidity support to municipal electricity producers and suppliers, ensuring the continuation of their activities and the security of supply. We continue to stand with Ukraine and its people. At the same time, we continue working closely with Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, while protecting the level playing field in the Single Market.” A press release is available online.