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Sweden’s government ready with electricity compensation for businesses

Sweden's government has finalised its compensation package for businesses affected by high power prices, a full seven months after it promised the system would be in place.

Published: 8 May 2023 20:27 CEST

Sweden's government ready with electricity compensation for businesses

Businesses will be able to apply for electricity price compensation from Majy 30th. Photo: Janerik Henriksson/TT

At a meeting on Monday afternoon, the government formally decided on the government order under for the compensation, meaning businesses can start to apply to the Swedish Tax Agency to receive the money from May 30th.

The decision came after the European Commission on Friday gave its approval to the system, a month after the government first sent in its application for the scheme to accepted under state aid rules.

“I’m happy to be able to announce that the government has as quickly as possible decided on the government order,” Sweden’s business minister Ebba Busch said in a statement.

It is seven months since the date that the government and the Sweden Democrats had promised that the electricity price compensation would be available to businesses.

The commission said that the system had to be changed so that companies and organisations who already had a fixed price electricity contract in place before February 24th 2022 which remained in force until after February 24th 2023 would not be eligible for a payment.

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India among top investment destinations for Swedish companies

“The stars are aligned for India. They have got a lot of internal investment programmes started, have acquired internal stability and managed to navigate the geopolitical situation in such a way that no one has any doubts any longer,” said Business Sweden CEO Jan Larsson.

Swedish businesses are in general less optimistic than last year about the global business scene, due to a struggling European economy and escalating trade wars between the US and China, according to a new Global Business Climate Survey 2024 by Business Sweden.

Despite this, many of the 24 countries in the report maintained a generally positive outlook, with scores over 3 on a 5-point scale, where 1 equals very poor and 5 very good.

Overall, just six percent of respondents perceived the business climate as very good, 31 percent as good, 45 percent as neutral, 15 percent as poor and 2 percent as very poor.

There are also some markets where sentiment has improved slightly since last year: Brazil, South Africa, South Korea, the UK and Spain.

At the other end of the scale, interest in investing in giant markets such as China and Germany appears to be on the wane, along with Taiwan and Mexico.

“Doing business in Germany comes with a lot of administrative work compared to Sweden, which is time consuming and costly,” EWAB Engineering GmbH managing director Fredrik Almcrantz said in the report. “Digitalisation doesn’t replace paperwork related to compliance with rules and regulations, it is just an added layer on top of traditional routines.”

Almost a third (65 percent) of Swedish businesses surveyed expect revenue to grow and plan to increase their global investments in the year ahead. A clear majority (70 percent) of companies were profitable last year, while 12 percent reached break-even and 13 percent reported negative results.

The Netherlands and France had the highest percentage of profitable Swedish companies, while the highest share of companies making a loss were reported in South Korea and Germany.

India, the United Arab Emirates, Indonesia and Saudi Arabia are among the countries on the list identified as having the most favourable business climates for Swedish companies, while Germany, Mexico and the Netherlands were rated lowest on the list.

India, Brazil and Indonesia also had the highest share of companies saying that the Swedish brand contributes “to an extent or great extent” to their success in those markets. At the other end of the scale were the United States, Canada and Saudi Arabia.

“In the Indonesian market, Swedish products are generally considered to be high quality, robust and durable,” said M. Syahrul Mohideen, area sales manager at ScanBox Thermoproducts AB.

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