Published by Global Banking and Finance Review
Posted on December 18, 2025
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, technology, and industrial modernization as Europe's largest economy seeks to regain competitiveness.
The fund, coordinated by the finance and economy ministries with implementation by state-owned development bank KfW, will use guarantees, loans, and equity stakes to de-risk private investments rather than direct state spending.
The government describes the fund as "temporary seed financing" for Germany's economic transformation after years of stagnation.
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 start-ups and scale-ups in deep tech, biotech, and defence technology.
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 through an enhanced "Zukunftsfonds II" focusing on growth and innovation capital.
KfW will also begin financing defence exports and purchase securitizations to strengthen lending to small and medium-sized companies.
($1 = 0.8517 euros)
(Reporting by Maria MartinezEditing by Madeline Chambers)
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