In a significant development, the German government, along with key stakeholders including Siemens AG, has reached a provisional agreement to cover billions of euros in project-related guarantees for Siemens Energy. The deal, considered crucial for the country's energy transition away from fossil fuels, involves Siemens AG, Siemens Energy's leading shareholder, contributing to the guarantees. While some details are still under discussion, the news has already had a positive impact on the market, with shares in Siemens Energy rising by 6.3% and Siemens experiencing a 2.4% increase.

Siemens Energy, a major player in the production of gas and wind turbines, as well as large converter stations, plays a vital role in Germany's efforts to shift away from fossil fuels. The government's backing is seen as a strategic move to support a company deemed systemically relevant. However, the agreement is yet to be formally drawn up and approved by all stakeholders, a process that may take some time.

The discussions, initiated in October, aimed at securing 15 billion euros in guarantees for project and warranty bonds to safeguard Siemens Energy's substantial 109 billion euro order book. The challenges included stricter criteria from banks due to higher interest rates, wind turbine issues, and a credit rating downgrade by S&P in July. The impending deal, once finalized, could significantly contribute to stabilizing Siemens Energy's financial standing.

Source: reuters.com