In December, the State-Owned Enterprise Act was amended with effect from 1 January 2003. With this amendment, the regulations declaring that state-owned enterprises cannot be declared bankrupt have been struck down. Therefore, debts and other liabilities taken on by state-owned enterprises after the end of 2003 will no longer be protected by an implicit guarantee from the State.

The State confirms that it has a responsibility to meet existing liabilities in that transitional rules have been established which ensure that liabilities entered into prior to the date on which the amendment to the Act came into force will have the same protection as before. This is ensured in that the State will represent the state-owned enterprises in these obligations within six months after any bankruptcy situation occurring, so that creditors will receive full payment, including interest on overdue payments, by that date at the latest. In the case of loans raised prior to 31 December 2002, and which therefore are implicitly guaranteed by the State, Statkraft will pay a guarantee premium. This guarantee premium is based on market conditions and decided upon annually by the Storting. As of 1 July 2002, this premium is set to 0.6 per cent per annum.

The ESA, which monitors EEA countries such as Norway to ensure compliance with the EU’s legislation on competition, has undertaken an assessment of the amendment to the State-Owned Enterprise Act and has protested against the fact that guarantees are given for state-owned enterprises’ other obligations over and above loans without the enterprises having paid a guarantee premium for these. This case is being dealt with by the Ministry of Labour and Government Administration, and it cannot be ruled out that the result of this protest may be the phasing out of the guarantee for other obligations. However, an amendment of this type will not affect the support for state-owned enterprises’ agreement based loans, which will continue to have an implicit State guarantee in line with the above-mentioned transitional rules for the amendment to the State-Owned Enterprise Act.

As far as risk weighting for Statkraft’s loans is concerned, the absence of an implicit State guarantee in connection with the amendment to the State-Owned Enterprise Act means that the risk weighting for Norwegian financial institutions will increase to 100 per cent for new loans. For loans raised prior to 1 January 2003, the risk weighting is still 10 per cent. For foreign financial institutions, the risk weighting is dependent on what the authorities in each individual country decide, but the risk weighting for new loans should, in any case, be expected to be 100 per cent.