Finland and Sweden on Sunday announced plans to offer billions of dollars in liquidity guarantees to energy companies in their countries after Russia's Gazprom shut the Nord Stream 1 gas pipeline, deepening Europe's energy crisis.

Finland is aiming to offer 10 billion euros ($9.95 billion) and Sweden plans to offer 250 billion Swedish crowns ($23.2 billion) in liquidity guarantees.

"The government's programme is a last-resort financing option for companies that would otherwise be threatened with insolvency," Prime Minister of Finland Sanna Marin said at a press conference.

The guarantees are designed to prevent ballooning collateral requirements from toppling energy companies that trade electricity on the Nasdaq Commodities exchange, an event that could in turn spread to the financial industry, the governments said.

Lower gas flows from Russia both before and after its February invasion of Ukraine have already pushed up European prices by nearly 400% over the past year, sending electricity costs soaring.

The rapid rise in electricity prices has resulted in paper losses on electricity futures contracts of energy firms, forcing them to find funds to post additional collateral with the exchanges.

Finland's Marin said there needed to be measures at the European Union level to stabilize the functioning of both the derivatives market and the energy market as a whole.

Nasdaq clearing is a Swedish company supervised by Swedish authorities, which is the main reason Sweden was the first country to step in to tackle the potential crisis.

Swedish Finance Minister Mikael Damberg on Sunday said that the guarantees would last until March next year in Sweden and would also cover all Nordic and Baltic nations for the next two weeks only.

Without government guarantees, electricity producers could have ended up in "technical bankruptcy" on Monday, Damberg said.

($1 = 10.7633 Swedish crowns)

($1 = 1.0049 euros)