State, banks guarantee Siemens Gamesa $1.2 billion to ensure its viability | Economy
The Spanish export credit insurance company (Cesce), majority-owned by the state, formalized on Monday a €1,200 million guarantee to Siemens Gamesa so that the wind turbine manufacturer can fulfill its order book of around €40 billion. Four Spanish banks (BBVA, Caixabank, Kutxabank and Santander) and two French banks (BNP Paribas and Credit Agricole).
The guarantee line will serve Gamesa to “support its wind projects with technical guarantees as usual” and will be guaranteed by Cesce for 50% of the total amount. That is, by the state, which will share the rest of the risk with the guarantor banks. The latter will be covered by the Reserve Fund for Internationalization Risks (FRRI), a structural unit of the Ministry of Economy, Trade and Business. However, Cesce is confident that the operation “should not entail any costs for the state, since there is no outstanding payment history in Siemens Gamesa’s payment history and said payments are guaranteed by the parent company.”
In recent years, a combination of factors – quality issues with onshore wind turbines and growing competition from non-EU manufacturers – has led Siemens Gamesa into a delicate situation, characterised by heavy losses and a constant turnover of top management, with a rate of one new CEO per year.
The financial instrument will be considered “green” for banking activities and will be of the type mixing“allowing new guarantees to be issued as current guarantees are issued, up to a maximum limit of 1,200 million euros.” And the guaranteed amounts will be “of a technical nature, i.e. amounts necessary for the tendering, contracting, implementation and guarantees of Siemens Gamesa wind energy projects abroad.”
The guarantee line announced this Monday “complements” the aid already approved by the German state for the parent company Siemens Energy, which amounts to 11 billion euros. When this rescue was approved last November, the government of Pedro Sánchez had already promised to contribute to ensure that the company continues and maintains its operations in Spain. This aid was finalized this Monday before the notary.
In the message, Ceske herself acknowledges that “maintaining industrial capacity in the European Union, and in Spain in particular, is an important aspect that the parties have always had in mind.” At the end of May, the company announced the layoff of 400 workers in Spain, 10% of the total. However, the adjustment was less than feared for months; it is a clear hint to the government to provide the guarantees necessary to ensure the continuity of your business.
Siemens Gamesa is present in five autonomous communities of Spain, including factories and offices. The bulk of the layoffs are in the first companies, where many functions are being transferred to Germany. The administrative and management area is located mainly in Madrid, Sarriguren (Navarre) and Zamudio (Bizkaia), where its headquarters are located, and industrial plants are in Castilla y Leon, Cantabria, Valencia, Galicia and Euskadi.
The company urgently needed these bank guarantees, which are intended to “cover the implementation of the project over several years,” a common operation among renewable energy producers. “In other words, these guarantees represent financial support to ensure the viability of the project,” Cesce and Gamesa said in a joint note. Despite concerns about the problems of its subsidiary, which was once the jewel in the crown of Spanish industry, Siemens Energy has managed to overcome the most critical moment, more than doubling its stock market value in 2024 and reaching three-year highs. In large part thanks to the good development of its other business areas: the production of natural gas power plants, the commissioning of substations and electrical networks.
Last spring, in a meeting with international media, including EL PAÍS, Siemens Energy CEO Christopher Bruch admitted that after “more than twelve months” without selling a single turbine, the company was even considering a final exit from the onshore wind business, a decision that would be fatal for its plants in Europe and especially in Spain. Hence the interest of the German and Spanish governments in supporting the project so that it can move forward.
Back then, in mid-May, Bruch had already told this newspaper that negotiations with the Spanish authorities were beginning to bear fruit and he was confident that an agreement would be reached in a matter of “weeks”. “The government’s attitude is very constructive: I am very grateful for their cooperation and for understanding what we want to do. They were interested in our decision (to stay) in onshore wind energy,” the head of Siemens Energy emphasized. “Let’s not forget that this is not about getting money from taxpayers: on the contrary, we are going to pay for guarantees.”
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