The federal government is launching the “Germany Fund” – a new initiative to mobilize massive private capital for startups, energy projects and medium-sized businesses.
Friedrich Merz’s government is launching a “Germany Fund” to attract up to 130 billion euros in private investment for riskier projects. The initiative is intended to boost the German economy through targeted support Infrastructurerevitalize startups and medium-sized businesses.
The state development bank Kfw anchors the fund and provides it with 30 billion euros in guarantees and guarantees as well as 3.2 billion euros of its own resources. New capital flows to the tune of 600 million euros. Stefan Wintels, the CEO of Kfw, takes over management.
On Thursday, Federal Finance Minister Lars Klingbeil (SPD) and Federal Economics Minister Katherina Reiche (CDU) presented the details of the fund together with Wintels.
Three central building blocks
The fund is divided into three central components: “Start-ups and Scale-ups”, “Energy Supply Companies” and “Industry and SMEs”. Each building block uses different financial instruments that were developed in coordination with banks and investors.
In the startup sector, the fund bundles various future fund components and expands existing programs. As a co-investor with private fund managers, Kfw Capital invests directly in innovative companies from deep tech, AI, biotechnology, climate technology and defense technology.
For energy supply companies, Kfw offers loans for deep geothermal drilling and low-interest financing for systems that generate electricity, heat and cold from renewable energies. Small and medium-sized businesses and industry receive support through bank guarantees, sureties, securitizations and venture capital financing.
The Germany Fund marks the federal government’s third major reform to strengthen investment in Germany. Following the new infrastructure special fund and the generous depreciation rules, the government is now specifically focusing on mobilizing private capital. The government plans to gradually develop the fund and adapt it to the needs of the economy.
