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The Germany Fund
Private investment for Germany's futureThe Germany Fund creates a framework that makes it easier for private and municipal companies to invest in Germany on a large scale. The federal government is providing public funds and guarantees amounting to around EUR 30 billion for this purpose. This is intended to trigger total investments of around EUR 130 billion – as an investment offensive alongside the special government fund. KfW is coordinating the Germany Fund and is the point of contact for national and international investor advice.
The key areas in which the Germany Fund is intended to stimulate private investment are industry and small and medium-sized enterprises, venture capital, and energy infrastructure. These include, for example, major future investments in new technologies and production facilities, the expansion of renewable energies, heating networks, and electricity grids, but also the extraction of raw materials and the financing of innovative technologies in the fields of deep tech, AI, and biotech, as well as the development of solutions to strengthen defense capabilities.
The financing options offered by the Germany Fund are to be used by industrial companies, medium-sized companies, start-ups, young growth companies, private and municipal energy suppliers, and companies in the defense and raw materials industries. In order to address the entire spectrum of needs, the Germany Fund is not an investment fund, but rather an umbrella structure for various target groups that specifically address these needs.
Government guarantees make it easier for industry and small and medium-sized enterprises to invest in future-oriented projects. After all, the more resilient our companies are, the stronger Germany’s position as a business location becomes. To this end, the Germany Fund offers, for example, a risk mitigation instrument for industries undergoing transformation: It supports major industrial investments, such as in the areas of power generation or hydrogen—but also in the automotive industry, among small and medium-sized suppliers, and in mechanical engineering. KfW participates in guarantee financing of EUR 100 million or more with up to a 50% share. Through the Raw Materials Fund, equity investments and KfW loans are also provided to finance projects for the extraction of critical raw materials for the German economy—such as promoting lithium extraction in Germany.
Under the umbrella of the Germany Fund, the dual-use scale-up Quantum Systems, based in Gilching near Munich, received its first investment commitment in mid-December 2025 and its second in July 2026 from KfW Capital’s Scale-up Direct programme, in collaboration with general partner HV Capital.
Scale-up Direct is a new, additional source of capital for innovative, high-growth technology companies. It enables direct co-investments to bolster funding rounds — with up to EUR 50 million per company. The requirement is that, in addition to the general partners from the KfW Capital portfolio, a private investor must participate in the round. A total of EUR 1 billion is earmarked for Scale-up Direct through 2030.
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KfW Capital, together with portfolio partner UVC Partners, has invested in Isar Aerospace through the Scale-up Direct programme. The investment is part of the venture capital pillar of the Germany Fund (Deutschlandfonds) and represents KfW Capital’s next direct co-investment under the new programme.
The Raw Materials Fund, under the umbrella of the Germany Fund, is investing up to EUR 150 million in the implementation of the ambitious Lionheart project by the German-Australian company Vulcan Energy in the Upper Rhine Rift and in Frankfurt-Höchst (Hesse), thereby helping to strengthen the resilience of European and German raw materials supplies.
As part of the project, lithium - a key material for electric vehicle battery production - will be extracted from geothermal brine in the vicinity of Landau (Rhineland-Palatinate). At the same time, construction of a large-scale lithium plant in the Frankfurt-Höchst Industrial Park will begin in April 2026. On a site covering approximately 80,000 square meters, an existing facility will be expanded to include a second production plant and a battery storage facility with a capacity of 18–22 MWh.
Together with the combined geothermal and lithium extraction plant in Landau, this will create Germany’s first sustainable lithium supply chain - efficient, regional, and forward-looking. Once completed, batteries for approximately half a million electric vehicles will be manufactured annually in Frankfurt-Höchst.
This is a significant step toward Germany and Europe’s independence from raw materials—with support from the Federal Government’s Germany Fund and KfW.
Through the Raw Materials Fund, the German Government is investing up to 50 million euros in the Nolans project run by the Australian company Arafura Rare Earths Ltd. in the Northern Territory. In doing so, it is strengthening the secure and diversified supply of critical rare earths to Germany and Europe and reducing existing dependencies.
The project focuses in particular on the rare earths neodymium and praseodymium. These are key precursors for high-performance permanent magnets, which are used, amongst other things, in electric vehicles and in onshore and offshore wind turbines. The development of additional extraction and processing capacities outside existing concentrations is a key element in enhancing the resilience of global supply chains.
The Germany Fund, launched in December 2025, has got off to a successful start. The Germany Fund was established to mobilise private capital for future-oriented investments and thereby boost the competitiveness of the German economy. Private investment is a key factor in driving growth in Germany. The Deutschlandfonds aims to channel private capital to where innovation takes place and growth is possible. To this end, it uses a range of instruments to specifically address the needs of industry, small and medium-sized enterprises (SMEs), young companies, start-ups and scale-ups, as well as energy supply companies.
The Germany Fund brings together various measures designed to mobilize private capital for investment in Germany. This is achieved, for example, through government risk protection for financing the energy transition, or through government-backed investments in raw materials projects, venture capital funds, or start-ups. Accordingly, the Germany Fund is not a fund in the traditional sense. The focus is on three target groups: energy supply companies, industry/SMEs, and start-ups and scale-ups.
As of 6 October 2026
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