GENEVA (AP) — The Swiss government said Tuesday that it has agreed to give an urgent credit line of 4 billion Swiss francs ($4.1 billion) to power plant operator Axpo Holding as energy prices soar in Europe and could “endanger Switzerland’s energy supply.”
Axpo, which has 30 locations in Europe, North America and Asia and partners to run over 100 power plants, said it applied for the funds to help meet collateral requirements of long-term supply contracts after a tenfold increase in wholesale electricity prices from a year ago and wild fluctuations in prices in recent days.
The company, based in Baden northwest of Zurich, said the “continuing unpredictability” in the market has already prompted governments in countries like the Czech Republic, Finland, France and Germany to help out energy companies. It comes as Russia has reduced or cut off natural gas to several European countries amid the war in Ukraine, driving up prices for gas and electricity at record rates.
The Swiss executive branch, known as the Federal Council, said European markets have seen sharp increases in energy prices because of the war in Ukraine and “low availability” of electricity from nuclear power plants in neighboring France.
“With this financial aid, the Federal Council wants to prevent Axpo from experiencing liquidity problems which could, in the worst case, endanger Switzerland’s energy supply,” the council said in a statement.
The seven-member executive said it was acting under an emergency law aimed to help electricity providers. Last week, two of its members appealed to their fellow Swiss — who in 2021 got more than 60% of their electricity from hydropower — to help avoid wasting energy such as when cooking or heating.
Swiss authorities have repeatedly said energy supplies in the country are adequate for present and future needs despite the recent pressures in the market.