The European Commission said that it has approved up to 120 million euros in Bulgarian state aid for the state-owned gas company Bulgargaz to remedy the liquidity shortage.

The state aid, which will take the form of state guarantees for new loans granted to Bulgargaz, was approved under the EU’s state aid temporary crisis framework rules, put in place to minimise the impact of Russia against Ukraine on European companies.

In a statement, the Commission said that the state aid is subject to several conditions: it applies to new loans, the amount borrowed should not exceed the company’s liquidity needs for the following six months, the guarantees should be granted no later than December 31 and they should not exceed 90 per cent of the loan principal with maximum maturities of up to six years.

EC’s latest state aid approval comes on top of 800 million leva, or about 409 million euros, in Bulgarian state aid approved by the Commission in October.

Bulgargaz, which is wholly owned by the Bulgarian state, has faced “unusual liquidity needs to secure its supply of natural gas in a context marked by the surge in gas prices on the European energy markets,” the EC said in October.

After Gazprom cut off gas supplies to Bulgaria in April 2022, Bulgargaz and the country’s caretaker cabinet in office at the time scrambled to secure new sources of gas to replace Russian gas, which accounted for 90 per cent of Bulgargaz’s deliveries to customers.