BERLIN, Dec 18 (Reuters) - Germany unveiled the "Deutschlandfonds" on Wednesday, a 30 billion euro ($35.22 billion) initiative designed to mobilize private capital for investments in energy transition
Germany Unveils 30 Billion Euro Fund for Private Investment
By Maria Martinez and Christian Kraemer
BERLIN, Dec 18 (Reuters) - Germany launched its 30 billion euro ($35.2 billion) "Deutschlandfonds" initiative on Thursday, aiming to boost the competitiveness of Europe's largest economy by mobilising private capital for investments in the energy transition, technology and industrial modernisation.
The fund, coordinated by the finance and economy ministries and implemented by state-owned development bank KfW, will use guarantees, loans and equity stakes to de-risk private investments.
According to KfW, new guarantees, which have already been approved by parliament for next year, account for 95% of the total funds.
The government describes the fund as "temporary seed financing" for Germany's economic transformation after years of stagnation. It aims to attract around 130 billion euros of additional private investment.
The initiative targets three key sectors: industry and small and medium-sized companies pursuing decarbonisation and critical raw materials projects, energy utilities investing in renewable infrastructure, and startups and scale-ups in deep tech, biotech, and defence technology.
FIT FOR THE FUTURE
"What is crucial is to direct private capital specifically to where innovation is created, where we can make our supply chains more resilient and make Germany fit for the future," said economy minister Katherina Reiche.
Specific measures include up to 8 billion euros in guarantees for industrial transformation projects, a 600 million euro guarantee framework for geothermal drilling, and expanded venture-capital financing.
KfW will also begin financing defence exports and purchase securitisations to strengthen lending to small- and medium-sized companies.
The German Startup Association welcomed the government's plans, pointing to large financing gaps for the country's startups.
In the United States, around 510 euros per capita were invested in startups in 2024, compared to only 108 euros in France and 90 euros in Germany, the association said.
The new fund provides for one billion euros for startups by the end of 2030.
($1 = 0.8517 euros)
(Reporting by Maria Martinez and Christian Kraemer Editing by Madeline Chambers, Kirsten Donovan)
