On Tuesday 12 July 2022, the Chamber of Deputies (Luxembourg Parliament) approved two temporary aid measures for businesses; an aid scheme for companies particularly affected by the rise in energy prices (Bill 8019) and another in regard to the State guarantee scheme (Bill 7999).
These measures were retained in the agreement concluded at the end of the Tripartite Coordination Committee on 31 March 2022 ("Solidaritéitspak"), like the aid scheme in the context of the quota trading system for greenhouse gas emission which has already been approved by parliament.
Temporary aid scheme intended to offset part of the additional energy costs
The law establishing the aid scheme for companies particularly affected by the rise in energy prices comprises two parts: a first type of aid is aimed at large energy-consuming companies of all sizes and in all economic sectors that are facing a sharp rise in natural gas and electricity prices. The aid, the intensity and maximum amount of which are modulated according to the exposure of companies to soaring prices, covers part of the monthly additional costs of companies from February to December 2022.
The second type of aid is aimed at companies in the road freight transport, construction and food crafts sector which are recording losses and whose sustainability is in question due to the rise in fuel prices they need for travel and their deliveries. In the event that an operating loss is incurred, aid of a maximum amount of 400,000 euros per group may be granted to them in order to cover part of the additional diesel costs that they incur from February to December 2022.
Economy Minister Franz Fayot said: “This aid scheme comes in a context marked by the continuous rise in energy prices since the end of 2021. The geopolitical crisis triggered by the war in Ukraine exacerbated the energy crisis in connection with the economic recovery following the COVID-19 pandemic. We estimate that between 150 and 200 companies will be able to benefit from the aid scheme, for a total budgetary impact of up to €225 million”.
The application form for requesting this aid via MyGuichet.lu will be put online soon.
Aid scheme in the form of guarantees for the Luxembourg economy
The law establishing a State guarantee scheme for new loans aims to meet the liquidity needs of companies established in Luxembourg which are affected by the economic consequences of the Russian military aggression in Ukraine.
These loans, which should allow companies to finance their current activities or their investments, may extend over a maximum period of six years. They may cover an amount equivalent to 15% of the company's average turnover over the last three years or 50% of energy costs over the previous twelve months. The new lines of credit may be guaranteed up to 90% by the State.
On 27 July 2022, the Minister of Finance, Yuriko Backes, will sign with the representatives of the participating banks in the presence of the ABBL, the agreement governing the regime of loans guaranteed by the State. Minister Backes underlined: “I am very pleased that a large majority of MEPs voted in favour of this bill, which implements another important element of the solidarity package. Through this state guarantee scheme of up to €500 million, we will be able to further support our businesses in these difficult times.”