Frequently Asked Questions

Credit Limit will decrease when:

• Cash is withdrawn from the business account (decrease of Collaterals)
• Bank guarantee amount is decreased or the bank guarantee expires or becomes invalid (decrease of Collaterals)
• Bids are placed
• Capacity is acquired: once final allocation results are generated, the potential liabilities  are calculated again considering the marginal price of the auction

Credit Limit will increase when:

• Business account is credited (increase of Collaterals)
• The existing bank guarantee is increased or a new guarantee is added (increase of Colalterals)
• The validity of a bank guarantee is extended until the period to be secured for the targeted auctions is covered
• Placed bids for auctions are not winning

The Credit Limit is the sum of collaterals in place (cash deposit + bank guarantee) minus any outstanding payment obligations.

Outstanding payment obligations are relative to:

• Bid(s) registered at the closure of the Bidding Period for any concurrent auction
• Any due amount for capacity acquired from the publication of provisional Auction Results until the publication of final results for any concurrent auction

The Credit Limit shall be revised based on the actual allocated Long Term Transmission Rights when the provisional Auction results are published.

For the purpose of the Credit Limit calculation, outstanding payment obligations shall be increased to include the taxes and levies in force. Reduction Periods are taken into consideration for the calculation of the Credit Limit.

The acceptable Collaterals, according to the EU HAR are the Bank Guarantee and/or a cash deposit in a dedicated Business Account, provided that the JAO is entitled as beneficiary to the full collateral.

Collaterals that are provided in the form of a bank guarantee shall comply with the following specifications:

• bank guarantee shall be provided following the template available on JAO’s website
• the bank issuing the bank guarantee shall be permanently established, including via a branch in a EU member state, European Economic Area or Switzerland
• the bank issuing the bank guarantee, or the financial group it belongs to, shall have a long term credit rating of not less than BBB+ by Standard and Poor’s Corporation, BBB+ by Fitch or Baa1 by Moody’s Investors Service Inc.
• the bank issuing the bank guarantee shall not be an affiliate of the registered participant for which the bank guarantee is issued

In the event the Bank requires the verification of JAO signatures in order for JAO to trigger the Bank Guarantee, this can be obtained in two alternative ways: i) JAO provides its Trade Register Extract in French or German (please note that it is not possible to provide an English version); ii) ING Luxembourg confirms the signatures via the SWIFT message (please note that the cost of this service will be charged on the Bank Account of the Market Participant who made the request).

The Bank Guarantee/amendment of a Bank Guarantee shall become valid and effective from the moment the requested modification of the collaterals  within the Auction tool has been made, meaning from the moment that JAO has received the original of the Bank Guarantee/amendment of the Bank Guarantee.

Collaterals in the form of a Bank Guarantee shall be valid for the minimum periods as follows:

For long-term products:

• for products with a duration of more than one month, until at least 30 calendar days after the end of each next calendar month within the Product Period
• for products with a duration of one month, until at least 30 calendar days after the end of the Product Period
• for products with a duration of less than one month, until at least 60 calendar days after the end of the Product Period

For day-ahead and intraday products:

• until at least thirty (30) calendar days after the end of calendar month of the Product Period.

Market Participants should replace or renew the collaterals in form of a Bank Guarantee at least 4 working days before the expiry of the validity of the collaterals.

Each auction has "period to be secured" information, which indicates the minimum period the Bank Guarantee has to be valid to be taken into account while calculation the credit limit for the particular auction. This information can be found in eCAT Auction Tool in the "Auction" tab / Auctioning parameters.

If the Bank Guarantee expires before or on the mentioned date, unfortunately our system will not include it in the credit limit calculation for that particular auction, as it would not cover the whole required "period to be secured". Therefore, we always recommend to check this information in our Auction Tool, so that you could control you collaterals.