Energy firms turn their back on government-backed loans

The Energy Markets Financing Scheme has closed without receiving any applications, the Bank of England has confirmed

Big Zero Report 2022

A loan scheme, launched last year to avoid more energy firm collapses in the extremely volatile market, has closed without attracting any interest.

Under the Energy Markets Financing Scheme (EMFS), the Bank of England would provide a loan guarantee to gas and electricity suppliers.

In September last year, officials stated that the programme was designed to protect traders in the energy sector against “unprecedented” price surges.

According to the government guidance, the scheme was open to companies of “good credit quality” operating as generators, shippers or suppliers.

The Bank of England said: “As the scheme did not receive any applications, the EMFS has now formally closed with no guarantees issued.

“Since the launch of the scheme, prices in the wholesale gas markets have declined markedly and this has reduced some of the pressure facing eligible energy firms.

“HM Treasury and the Bank of England will continue to monitor developments in the energy markets.”

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