Recapitalisations (section 22 StFG)

According to Section 22 of the Stabilisation Fund Act (StFG), the ESF can participate in the recapitalisation of companies. In accordance with Section 24 (1) StFG, the Federal Ministry of Finance is authorised to take out loans for the ESF to cover drawdowns in accordance with Section 21 StFG and expenses and measures in accordance with Section 22 StFG. On 1 January 2022, the borrowing authorisation was reduced from € 100.0 bn to € 50.0 bn.
Since the fund was established, a total of 25 companies were granted recapitalisation measures from the ESF by the end of the granting period on 30 June 2022.
The financial requirements were generally covered in the form of silent participations or subordinated loans. The silent participations from the ESF make it possible to restore the equity ratio that existed before the coronavirus crisis and are primarily aimed at enabling companies to raise debt capital on the credit and capital markets through appropriate balance sheet structures. Although subordinated loans are usually recognised as debt capital in the balance sheet, they rank only after other creditors based on their servicing. Subordinated loans accounted for 19.4% and silent partnerships for 75.8% of the loans granted. The remaining share was attributable to other forms of financing such as shareholdings or convertible bonds.
In order to receive recapitalisation, the companies had to meet certain size criteria (see chapter "The ESF at a glance") and be able to demonstrate a clear independent going concern forecast once the pandemic had been overcome. The companies were required to pay a market-based remuneration (interest) for the granting of this capital assistance. Until the funds are repaid in full, the companies must also fulfil contractually agreed conditions, e.g. a sustainable business policy, restrictions on the remuneration system or the granting of appropriate contractual information rights vis-à-vis the ESF.

Guarantees (section 21 StFG)

The ESF was authorised pursuant to Section 21 (1) StFG to assume guarantees in order to eliminate liquidity bottlenecks and support refinancing on the capital market. It has not issued any guarantees or warranties since its inception. The granting period also ended on 30 June 2022.

Refinancing of special programmes and other transactions of KfW (section 23StFG)

The ESF can grant loans to KfW under section 23 (1) StFG to refinance the special programmes allocated to it by the German government in response to the coronavirus pandemic.
According to section 23 (2) StFG, the ESF can also grant loans to KfW to refinance transactions assigned to it by the Federal government under Section 2 (4) of the Law concerning KfW to secure the liquidity of companies in the energy industry, in particular to secure the energy supply or to maintain the necessary infrastructure.
Section 24 (2) StFG provides for a credit authorisation of € 100.0 bn for this purpose. Accordingly, loans have been taken out on the capital market since 2020 and passed on to KfW on the same terms as part of a loan. Some of the loans have already been repaid by KfW and returned to the capital market.

Stabilisation during the energy crisis

As a result of the energy crisis, the purpose of the ESF was expanded in November 2022 in order to finance the measures planned by the Federal government to cushion the consequences of the energy crisis in accordance with Section 26a StFG. In the context of the energy crisis, it was used to finance government programmes and measures and to grant loans to KfW. The ESF did not provide own instruments, as previously in the course of the coronavirus pandemic.
In accordance with Section 26b StFG, the ESF was authorised to borrow a total volume of up to € 200 bn for this purpose in 2022. Within this € 200 bn, the debt authorisation in 2023 amounted to € 43.2 bn. Measures in connection with the energy crisis were possible until the end of 2023. The ESF (energy part) was dissolved on 31 December 2023. At this time, the utilisation for financing the package of measures due to the energy crisis amounted to € 71.7 bn.