Siemens Energy, a German energy technology company, has been in the news recently due to its shares plummeting by nearly 40% on Thursday, wiping off €3 billion ($3.16 billion) from its market value. The company is in talks with the German government about state guarantees after major setbacks at its wind division. Siemens Gamesa’s wind unit has been grappling with quality issues this year, particularly with rotor blades and gears in newer onshore wind turbines. The company has incurred billions in losses as a result.
Siemens Energy is concerned that it may face difficulties in obtaining guarantees from banks due to the losses it has incurred. The company has approached the government and Siemens to obtain a guarantee framework. The German state would assume liability for 80% of an initial 10 billion euro funding tranche, while banks would be liable for the remaining 20%. Siemens Energy is seeking up to 15 billion euros in guarantees from the German government and banks .
Siemens remains an anchor investor in Siemens Energy, retaining a 25.1% stake. The German government is dedicated to supporting the industry during the transition to a low-carbon economy. The European Commission has recently released an action plan to maintain Europe’s wind industry’s global leadership position, which includes increasing financial support through export credit agencies and the European Investment Bank. While the government is willing to assist Siemens Energy, stakeholders must also play their part.
Siemens Energy’s financial results in 2023 are expected to be fully in line with previous guidance. Siemens Gamesa is currently addressing the quality issues with its wind turbines. The executive board has not yet made any decisions regarding the 2024 annual budget or specific financing measures.