Federal guarantee worth a billion dollars is restored by Siemens Energy
Siemens Energy Ditches Federal Guarantees, Secures New Bank Loan
In a surprising move, Munich-based Siemens Energy has shed the federal guarantees, severing a whopping €11 billion deal. This decision comes after the company announced a new €9 billion loan from a consortium of 23 banks, free from government backing.
Back in 2023, Siemens Energy found itself in a tight spot due to the crisis in its wind sector. The company was fortunate to receive large new orders, but securing the necessary guarantees from banks proved to be a challenge. Thankfully, the federal government stepped in with a cost-effective guarantee, allowing the energy giant to breathe a sigh of relief — and part with around €100 million annually, according to CEO Christian Bruch, speaking to the "Handelsblatt." Bruch deemed this a "good deal for the federal government."
Fast forward to June 2025, and Siemens Energy's fortunes have dramatically improved. The company is now sailing smoothly, anticipating its second consecutive annual profit. This striking turnaround has allowed Siemens Energy to leave its federal guarantee behind, having gained an attractive market environment and solidified its financial standing over the past two years.
CFO Maria Ferraro explains that, "The federal government's guarantee was pivotal in 2023 during a tumultuous phase to secure our expected growth." The guarantee permitted Siemens Energy to navigate its substantial order backlog and stabilize its finances during a tough period.
The consequences of this move are particularly encouraging for shareholders. Although the market reaction was relatively subdued when the news broke, the termination of the federal guarantee marks the end of a longstanding ban on dividends. However, the shareholders will have to wait until the next financial year, commencing on October 1 for Siemens Energy, to reap the rewards, with the first dividend payment potentially arriving in 2027.
Siemens Energy's strategic positioning within the energy sector has sparked optimism among analysts, who anticipate increased investment in energy technologies in the months ahead. Fingers crossed for Siemens Energy's continued success!
Insights:The federal government's guarantee was instrumental in supporting Siemens Energy during its financially challenging period in 2023. Siemens Energy was grappling with difficulties in its wind division, Siemens Gamesa, causing significant financial strain. The government-backed guarantee provided a safety net, enabling Siemens Energy to secure its large-scale project business.
The successful transition to a €9 billion loan from a consortium of 23 banks and the release of a separate €1 billion credit line from Siemens AG in June 2025 signify a significant milestone in Siemens Energy's financial recovery. This change presented an opportunity for Siemens Energy to regain its financial autonomy and lift the ban on paying dividends, as long as the company maintains its positive performance trajectory.
Analysts remain optimistic about Siemens Energy's prospects in the energy sector, which is expected to benefit from increased investment in energy technologies in the near future.
- As the federal guarantee was instrumental in supporting Siemens Energy during a financially challenging period in 2023, this move to secure a new €9 billion bank loan without government backing, signifies a significant step towards financial autonomy within the energy industry.
- With the successful transition away from federal guarantees, Siemens Energy's shift towards finance-driven growth in 2025 opens up opportunities for increased investment in energy technologies, potentially strengthening its position within the business sector and fostering growth in the industry and finance landscape.
