Global law firm Hogan Lovells has advised HM Treasury on the Energy Markets Financing Scheme (EMFS), an innovative and bespoke scheme to be run jointly with the Bank of England to address extraordinary liquidity requirements faced by energy firms operating in the UK gas and electricity markets.  The scheme opened for applications on 17 October 2022 and could provide up to £40bn of short-term liquidity support to the UK energy sector.

The EMFS will enable the provision of short-term financial support to energy firms of good credit quality for the purpose of meeting margin calls arising due to hedging activity related to the UK gas and electricity markets.  Further details of the scheme can be found in the market notice issued by the Bank of England on 17 October 2022 which can be found here.

The Hogan Lovells team was led by banking partner Andrew Taylor, with support from financial services and government relationship partner Rachel Kent, energy partner Ben Sulaiman, debt capital markets partner Jennifer O’Connell, subsidy control partner Ciara Kennedy Loest and financial services consultant Dominic Hill.

Partner Andrew Taylor commented: “We’re delighted to have helped HM Treasury on this innovative scheme and to have played a small part in the government’s latest loan guarantee scheme.”

Partner Rachel Kent added: “As a trusted advisor to the UK Government, it is always a pleasure to work on their high profile matters, but particularly when we are entrusted to advise on innovative market interventions such as this scheme.”

Hogan Lovells’ work on EMFS is one of a number of high-profile energy matters on which the firm is advising the UK Government. These include advising the Department of Business, Energy and Industrial Strategy on the Energy Bills Support Scheme and on the administration of Bulb Energy Limited, the first use of the energy supply company administration regime.