They will reportedly receive as much as £40 billion in loans
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The Bank of England has set up a fund to bail out UK energy companies that face financial difficulties due to rising energy prices, The Guardian reported on Thursday.
The bailout fund, which will offer as much as £40 billion ($46 billion) in loans to struggling energy companies, was announced by Prime Minister Liz Truss along with other measures aimed at battling the country’s energy crisis on Thursday. According to Truss, the fund will help energy suppliers pay for power they buy in the wholesale markets, while also letting them insure themselves to protect against price rises.
According to the news outlet, over the past several months, around 30 energy suppliers have collapsed. If bigger companies start failing, the crisis will worsen and cost taxpayers billions, analysts say.
The details of the scheme remain vague so far, with the government on Thursday saying it may only be able to reveal a start date by the end of October. Further details are expected to be published next week.
“A £40bn liquidity fund provides some comfort for energy suppliers, but the support needs to start with immediate effect to stabilize the market. Further supplier casualties will end up costing consumers more,” Tim Speed, an energy specialist at Shakespeare Martineau law firm, told the news outlet.
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