Finland's state-owned energy firm Fortum confirmed on Friday that it has agreed in principle to a deal involving Germany bailing out its subsidiary Uniper, Germany's largest natural gas provider.

Uniper has struggled for months due to sanctions on Russia and rising costs of gas from other sources.

In order to keep the company afloat, and to ensure supply of gas, Germany agreed to pay 267 million euros for a 30 percent stake in Uniper, while offering the firm up to 7.7 billion euros in financing.

In a statement, Fortum added that Germany's state-owned bank KfW will also provide Uniper with an extra seven billion euros - in "liquidity support through an increase of its existing credit facility from the current two billion to nine billion."

After the deal goes through, Fortum's ownership of Uniper will decrease to 56 percent. Fortum currently owns 78 percent of the company.

Fortum, 51 percent of which is owned by the Finnish state, confirmed the agreement on Friday.

Fortum's CEO, Markus Rauramo, said the agreement was the best option for all parties.

"We were driven by urgency and the need to protect Europe's security of supply in a time of war. In addition to thanking the German government and our colleagues at Uniper, I would also like to thank the Finnish government for their support in recent weeks," Rauramo said in a company statement.

Due to the lack of Russian gas supply, Uniper has had to purchase the fuel from other sources at significantly higher prices to fulfil guaranteed customer deliveries.

The firm has seen tens of millions of euros in losses per day, which is why a solution to the problem was sought so urgently over the past couple of weeks.

As Germany's largest natural gas transmission company, the country could not feasibly allow it to go bankrupt, due to the vital nature of the fuel it provides for heating and industrial purposes.

At the same time, the Finnish state wanted to ensure that the firm's bailout was not financed by its taxpayers.

Edited at 18:32 to clarify the terms of the deal.