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19 Jul, 2022 05:37

European energy firms rack up debt to cover soaring costs – Bloomberg

Their liabilities have reportedly reached over $1.7 trillion
European energy firms rack up debt to cover soaring costs – Bloomberg

European energy and utilities companies are taking on more debt to offset soaring oil and gas prices, Bloomberg reported on Monday.

The firms’ overall debt has jumped by more than 50% since the start of the pandemic in early 2020, and now stands at €1.7 trillion ($1.7 trillion), the publication adds.

Earlier this month one of Germany’s largest energy supply companies, Uniper, asked for a government bailout, citing “extreme financial pressure” caused by reduced Russian natural gas deliveries. The company may need as much as €9 billion to stay afloat, Bloomberg says, adding that Czech power firm CEZ CP is also seeking help of up to €3 billion.

The EU’s power companies raised €45 billion in bonds and €72 billion in loans during the first six months of the year, according to the news agency.

The energy crunch has led to an eight-fold increase in European benchmark natural gas prices over the past 18 months, with oil becoming roughly 50% more expensive over the past year. This has driven up the overall cost of living, with inflation hitting multi-decade highs across the EU.

For more stories on economy & finance visit RT's business section

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