Finland's President Sauli Niinisto (left) and Sweden's Prime Minister Magdalena Andersson address a news conference in Stockholm, Sweden on May 17, 2022. Photo: AFP

Finnish government proposed on Sunday to provide the country's electricity companies with loans and guarantees of up to 10 billion euros ($10 billion) to secure the sufficiency of their cash resources.

Minister for Finance Annika Saarikko said at a government press conference on Sunday afternoon that with the pledge, the government wants to "calm down the electricity futures, or derivatives market and to secure the availability of electricity in Finland in all circumstances."

"The state could grant loans or guarantees on a case-by-case basis to companies whose continued operations are critical to the functioning of society," said Prime Minister Sanna Marin at the press conference.

European natural gas prices surged by as much as 36 percent on Monday after the flow of the fossil fuel through the Nord Stream One pipeline into Germany had been suspended on Monday.

Finland does not use Nord Stream One, but the Nordic electricity market would likely see a price increase.

The Finnish measures were thought to follow Sweden's similar but larger announcement on Saturday.

According to the government's proposal, the state could grant loans or guarantees to electricity companies if they are threatened with insolvency.

A government loan would be the last resort when all other financing options have been exhausted. Only companies central to the functioning of the electricity market could receive loans or guarantees.

Agencies