WIREDGOV

The European Commission has approved a €3.4 billion (DKK 25.2 billion) Danish subsidised loan scheme to support companies 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 and on 28 October 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.

Executive Vice-President Margrethe Vestager, in charge of competition policy, recently said:

“In the current context of economic uncertainty, this €3.4 billion scheme will enable Denmark to provide liquidity support to companies for deferring part of their energy bills, allowing them to continue their activities.”

The Danish liquidity support measures

Denmark notified to the Commission, under the Temporary Crisis Framework, a €3.4 billion (DKK 25.2 billion) subsidised loan scheme to provide liquidity support to companies in the context of Russia's war against Ukraine.

The subsidised loan scheme, which will be managed by the Danish Business Authority, consists of two different measures: (i) a payment deferral of the bills for electricity, gas and district heating for all types of companies, administered by energy suppliers; and (ii) support for a total budget of €29 million (DKK 215 million) for energy suppliers covering their administrative costs linked to the payment deferral of energy bills.

Under the first measure, the individual loan amount per small and medium-sized enterprise (‘SME') and large company will cover the liquidity needs respectively for the 12 months and 6 months following the granting of the aid. The energy companies will estimate the liquidity needs based on the requested deferred payments by the eligible beneficiaries. The individual aid amount per beneficiary will not exceed (i) €2 million (DKK 15 million) for electricity and gas bills; and (ii) €500,000 (DKK 3.75 million) for district heating bills.

Under the second measure, energy supply companies will be entitled to receive an individual aid amount equal to 15% of their average total annual turnover over the last 3 closed accounting periods, capped to a maximum of €134,500 (DKK 1 million).

The Commission found that the Danish subsidised loan scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, (i) the maturity of the loans does not exceed six years; (ii) loans granted under the measure relate only to working capital needs; (iii) the annual interest rates respect the minimum levels set out in the Temporary Crisis Framework; (iv) the maximum loan amount per beneficiary respects the conditions set out in the Temporary Crisis Framework; and (v) the subsidised loans will be granted by 31 December 2023 at the latest.

In connection to the subsidised loan scheme, Denmark notified a separate aid measure (SA.104475) with a total budget of €1.3 million (DKK 10 million). The measure will be open to small and medium-sized energy companies providing district heating. The public support will consist in limited amounts of aid in the form of direct grants covering their administrative costs linked to the administration of the payment deferral scheme. The maximum aid amount per beneficiary will not exceed €13,440 (DKK 100 000).

The Commission found that this separate scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, (i) the aid will not exceed €2 million per company; and (iii) will be granted by 31 December 2023 at the latest.

The Commission therefore concluded that the Danish schemes are 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 measures under EU State aid rules.

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