Germany Pressures Siemens to Support Troubled Wind-Turbine Maker

Wilfried Eckl-Dorna and Michael Nienaber
·2 min read
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(Bloomberg) -- German Chancellor Olaf Scholz ratcheted up pressure on Siemens Energy AG’s biggest shareholder Siemens AG to help shore up the troubled wind-turbine maker’s finances as part of a joint package with the government and banks.

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Scholz said Wednesday at a Siemens Energy event in Berlin that he’s confident a deal can be reached if the various parties agree to shoulder a sufficient part of the burden.

“I expect that all parties involved will now make their contribution,” Scholz said. “And I would also like to say this here: I am confident that we will find a good solution very soon if everyone fulfills their responsibilities now.”

Siemens Energy has been seeking as much as €16 billion ($17.1 billion) in loan guarantees over two years after its credit rating was downgraded in July. Siemens, its former parent, indicated it was no longer willing to help it weather a string of losses at its Gamesa wind-turbine unit.

Siemens is facing pressure from the government to provide loan guarantees that are critical for Siemens Energy to take on future large projects. Officials from Scholz’s ruling coalition have been discussing a combination of state-backed guarantees flanked by guarantees from Siemens as well as some banks, people familiar with the matter have said.

Read more: Siemens Energy Weighs New Turbine in Bid to End Troubles

Scholz said Siemens Energy, which takes on long-term projects with gas turbines and power grids, has full order books, demonstrating excellent growth prospects. The talks on a “necessary security package” are “very constructive and very goal-oriented,” he said.

Government officials have said the company is critical for Germany’s transition to renewable energy as it fends off green-technology competition from China.

Siemens Energy’s share price has slumped roughly 45% this year, as problems at Gamesa mounted. Faults in thousands of wind turbines have left the company with a repair bill of at least €1.6 billion ($1.7 billion), though the company is still conducting a broad review of the issues to determine a final cost.

German Economy Minister Robert Habeck, also attending Wednesday’s event, told reporters that he also expects an agreement on the support package soon.

(Updates with additional details)

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