Many subsidies that have budgetary implications - that is, can create financial obligations for governments in the long run - never actually appear in budgetary statements. These "hidden" subsidies are common whenever a government takes on the role of a banker or insurer to a company or industry.
When a government loans money to a company at a lower rate of interest than a commercial bank would offer, or requires less collateral to back up its loan, defers repayment or allows for a longer period to pay off the loan, the company saves money.
Governments also sometimes guarantee loans taken out by companies or individuals through commercial banks. That means that the government assumes the risk of default on the loan, rather than the bank, which in turn means that the bank can offer the borrower more favourable lending terms, such as a lower rate of interest.
Governments also serve as an insurer of last resort for private investments. All OECD governments with nuclear power plants, for example, are signatories to an agreement that limits the financial liability of power-plant owners in the event of a catastrophic accident. Similarly, many governments would be stuck with part of the bill following the failure of a large hydro-electric dam. For this type of support, years may pass before a government incurs any actual costs. But when an accident does occur, the financial burden (not to mention human cost) can be huge.
