Siemens Energy clinches state guarantees as it posts a 4.6 billion euro annual loss

Key Points

• Government Guarantees: Siemens Energy secured €7.5 billion in project-related state guarantees from the German government. This was part of a broader €15 billion package, with private banks contributing €12 billion in guarantee lines and Siemens Energy obtaining an additional €3 billion through negotiations with stakeholders. The guarantees were granted to reinforce the company’s financial position amid challenges.
• Financial Challenges and Losses: The guarantees come on the heels of Siemens Energy’s announcement of a nearly €5 billion loss for its fiscal year. Manufacturing faults at its wind turbine subsidiary, Siemens Gamesa, led to the abandonment of profit forecasts earlier in the year. The guarantees are intended to support the company’s customers, ensuring prepayments and contract execution and shoring up its substantial €112 billion order book.
• Denial of State Aid: Siemens Energy’s CEO, Christian Bruch, denied that the fiscal guarantees constitute “state aid.” He emphasized that no cash is involved, characterizing the guarantees as an insurance package. Bruch highlighted that these guarantees are a common instrument in the industry, aiming to secure customer commitments. The funds will largely support the grid business and other non-wind sectors to sustain growth amid concerns about the industry’s cluster risk and uncertainties.