Germany launches €30 billion fund to mobilize private investment

Last week, Germany launched the €30 billion Deutschlandfonds initiative, aimed at boosting the competitiveness of its economy by mobilizing private capital. This was reported by the state development bank KfW.

The fund is coordinated by the ministries of finance and economy, and the initiative is implemented by KfW, which will use guarantees, loans, and equity stakes to reduce the risks of private investment.

The goal of this step is to attract additional private investment of around €130 billion.

According to the country’s Minister of Economy and Energy, Katerina Reiche, the current state of the German economy shows that a high level of investment is needed to modernize the country.

“It is extremely important to direct private capital to where innovation is generated, where we can make our supply chains more sustainable and Germany ready for the future. Deutschlandfonds mobilises private capital with public funds for this purpose, thereby ensuring effective investment in key future sectors,” she explained.

The financing options offered by Deutschlandfonds are intended for industrial companies, medium-sized enterprises, start-ups, growth companies, private and municipal energy suppliers, as well as companies in the defense and raw materials sectors. The fund is more of an umbrella structure for various modules specifically designed to meet the needs of these sectors.

The fund is to be established in stages. In addition to the initial project in the raw materials sector, the first three instruments will be launched in December 2025.

These are:

• a hedging instrument for transformational industries;
• a lending program to promote geothermal projects;
• a new financing instrument for start-ups and growing companies.

In the second phase, starting in 2026, additional instruments for modernizing energy infrastructure will be launched sequentially, as well as new private credit funds for startups and growth and innovation capital.

It should be noted that the German economy showed a confident start to the fourth quarter of 2025. The recovery in production growth and a noticeable increase in domestic orders in the industrial sector in October indicate stabilization, according to the country’s Ministry of Economy. Thanks to more dynamic demand from the EU, exports of goods also remained at a six-month high.