Germany announced on Monday it was nationalising a former subsidiary of Russian energy giant Gazprom, saying the step was necessary because of the systemic importance of the company for power supplies in the country.

The company Securing Energy for Europe GmbH (SEFE) was previously known as Gazprom Germania. It is a network operator, and indirectly controls Germany's largest gas storage facility in the northwestern town of Rehden.

In the wake of Russia's invasion of Ukraine and Moscow's decision to dwindle energy supplies to Europe, Berlin had placed the company under its effective control in April, but the ownership of the company had remained unclear. As a result, business partners and banks had suspended business relations with the company or were reluctant to enter into new ones, the economy ministry said. "This jeopardises the continuation of SEFE's business operations and thus the gas supply," it added.

Ownership of the company had remained unclear. As a result, business partners and banks had suspended business relations with the company or were reluctant to enter into new ones- German economy ministry

Germany was therefore formerly nationalising the company and turning it into a state asset.

Under complex accounting manoeuvrings, the company's losses are offset against its capital reserves. As a result, Gazprom loses its shareholding in the company, said the German economy ministry.

In turn, Germany will plough €225 million into the company, thereby taking over as "sole new shareholder". "This completes the change of ownership," said the economy ministry.

Germany also plans to offer the company a loan of €13.8 billion in a debt-equity swap arrangement by the end of the year, although the measure is still under discussions.

Once heavily reliant upon Russian energy, Berlin has been racing to wean itself off imports of gas and oil from the country.