The German government has announced a €15 billion ($16.3 billion) bailout package for Siemens Energy, a wind turbine-maker, with €7.5 billion ($8 billion) of taxpayer money being provided to rescue the company. The company is of vital importance to Germany’s energy transition, and the bailout is contingent on Siemens Energy pausing dividend payments to shareholders and bonuses for company board members. Private banks and other stakeholders are providing the remaining €7.5 billion ($8.3 billion). The German government will only provide its guarantee if all other stakeholders honor their commitments.
Siemens Energy is a spin-off firm of iconic German electronics-maker Siemens, and Siemens holds a majority 32% stake in the wind turbine maker. The deal to “secure the company” has been in the works for several weeks, and the federal government had been “in intensive contact” with Siemens Energy, Siemens, and private lenders. The company had revenue of about €29 billion ($32 billion) in its last fiscal year. Siemens Energy also makes gas-powered turbines and electrolyzers for hydrogen energy production, among a raft of other products. Its technologies underpin an estimated one-sixth of the electricity generated global. Siemens Energy employs 94,000 people in more than 90 countries.
The bailout highlights the economic challenges that countries face as they transition from fossil fuels to more sustainable energy sources. The German government’s decision to back Siemens Energy in this rescue package for green projects is a significant step towards achieving the country’s ambitious climate goals. The move is expected to help Siemens Energy continue to participate in large renewable energy projects. The company’s expertise in wind turbines and hydrogen energy production is crucial to Germany’s transition to a low-carbon economy.