The Germany Fund
Private investment for Germany's future

On 18 December 2025, Federal Minister of Finance and Vice Chancellor Lars Klingbeil, Federal Minister for Economic Affairs and Energy Katherina Reiche, and KfW CEO Stefan Wintels presented the Germany Fund at a joint press conference in Berlin.

The 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.

Lars Kllngbeil Katherina Reiche during the press conference of the Deutschlandfonds — Federal Minister and Vice Chancelor Lars Klingbeil

Katherina Reiche during the press conference of the Deutschlandfonds — Federal Minister Katherina Reiche

KfW CEO Stefan Wintels — KfW CEOStefan Wintels

Lars Klingbeil, Katherina Reiche, and Stefan Wintels (from left to right) on stage during the Deutschlandfonds press conference — Press conference marking the launch of the Germany Fund at KfW's Berlin branch.

Who benefits from the Germany Fund?

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.

Energie, Industrie, Mann, Maschine, Maschinenbau, Mensch, Metall, Metallgewerbe, Produktion, Produzierendes Gewerbe, Technologie, Werkstatt, Kohlekraftwerk

The Germany Fund facilitates the financing of future investments in competitiveness for the target group of industry and small and medium-sized enterprises. This includes the hedging instrument for transformation industries, which supports large-scale investments by industry, for example in the areas of power generation or hydrogen, but also in the automotive industry, among small and medium-sized suppliers, and in mechanical engineering. The Raw Materials Fund provides KfW equity investments and loans to finance projects for the extraction of critical raw materials for the German economy, such as the promotion of lithium extraction in Germany.

Example: A company invests in the expansion of battery storage facilities. KfW, together with banking partners, secures the delivery of the facilities with a guarantee. This enables the company to increase its investment volume.

Arbeiter mit Helm bei der Reparatur von elektrischen Anlagen in einem Kraftwerk

In the energy target group, the plan is to secure loans for electricity distribution and heating network operators so that they can cope with the sharp rise in investment in electricity distribution and heating networks over the next few years. In the field of geothermal energy, the risk of not finding underground hot water sources when drilling (exploration risk) will be hedged. In addition, given the high investment requirements, it is necessary for private and municipal energy supply companies to have the equity base required for financing. To this end, we want to enter into dialogue with the federal states and are working to make it easier for investors and energy suppliers to come together.

Example: An energy supply company is planning to modernize or expand its electricity distribution network. In order to finance the investment, KfW, in cooperation with the company's banks, provides a loan of up to EUR 100 million, the risks of which are shared between KfW and the banks. In return, KfW receives a guarantee from the federal government. This enables energy suppliers to address their substantial investment needs.

Drei Personen sitzt zusammen an einem Tisch und diskutieren Arbeitsergebnisse

In the target group of start-ups and scale-ups, KfW is now also acting as a co-investor, investing directly in start-ups in Germany together with private investors from the KfW Capital fund portfolio. A maximum of EUR 50 million per investment and a total of EUR 1 billion are available for this purpose until the end of 2030. A further EUR 300 million is available for participation in credit funds that invest in the expansion of innovative industrial technologies. To strengthen venture capital financing, the Future Fund will be increased and made permanent from 2026.

Example: Young companies, for example from the defense sector, receive venture capital from funds in which KfW participates. In this way, we support the development of sustainable products and promote innovation. The new, additional funds from the “Growth and Innovation Capital (”Future Fund II“)” will be used for venture capital financing, particularly in the areas of deep tech, biotech, and security and defense, as well as to cover existing financing needs in the SME sector.

Launch of the Germany Fund

The Germany Fund is to be set up in stages. In addition to an initial project in the raw materials sector, the first three instruments will be launched in December 2025. These are:

the hedging instrument for transformation industries
the loan program to promote geothermal energy projects, and
a new financing instrument for start-ups and scale-ups

In a second stage, further instruments are to be launched successively from 2026 onwards. These include instruments for modernizing the energy infrastructure, new private credit funds for start-ups, and growth and innovation capital, which will increase the Future Fund and thus further strengthen venture financing in Germany and address financing gaps for small and medium-sized enterprises. In the further expansion, we also want to strengthen venture financing for innovative start-ups and scale-ups in the security and defense industry through fund investments or direct investments and clearly focus on our country's technological defense capabilities. In addition, another instrument will be established in the area of securitisation to deepen access to capital markets and improve financing conditions for the German economy.

Further instruments will be introduced in line with market conditions and demand. In the construction sector, too, the mobilization of private capital is important for affordable and sustainable housing in Germany. The federal government has therefore joined forces with KfW to launch a process to develop a new module for housing construction under the umbrella of the Deutschlandfonds. This module is intended to improve the situation on the housing market and boost private investment in housing construction.

Facts about the Germany Fund

The Germany Fund helps to stimulate investment in key future-oriented areas, thereby securing our country's future. The transition of our economy to affordable, reliable, and climate-friendly energy, a dynamic supply of venture capital for start-ups and scale-ups, and the necessary investments in digital technologies and greater resilience require capital and a broad spectrum of financing instruments for companies. The majority of these investments are made by companies and not by the state.

With various instruments within the framework of the Germany Fund, the state provides impetus to mobilize private capital for future projects. With other instruments, it creates transparency and brings market participants together. The aim is to act quickly and in a targeted manner now so that the German economy can regain its competitiveness.

The Germany Fund is now being launched and will be continuously developed in line with market conditions and needs. In the coming years, it will be crucial to evaluate the effectiveness of existing instruments and, if necessary, develop new instruments and products.

FAQ

The Deutschlandfonds 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 Deutschlandfonds 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.

Germany is facing enormous investments in the modernization and expansion of its infrastructure and in the field of innovative technologies. However, the majority of the investment requirements will not be covered by the state, but by private actors. This is why private investors and banks are needed to finance these investments, as well as companies to make them.

The Germany Fund helps to enable these investments. With government guarantees or equity investments and the removal of barriers to investment, it improves the framework conditions and creates incentives to mobilize many times more private capital, thus ensuring that Germany remains competitive, achieves its climate targets, and increases its resilience. The government's shares in the Deutschlandfonds are therefore a temporary start-up financing for the modernization of our country and the German economy.

The Germany Fund is aimed at companies and investors that play a central role in transforming the economy and ensuring its competitiveness:

Industry and SMEs:
Companies that plan, for example, to invest in Germany's energy infrastructure or the production of the necessary equipment, the accelerated development and use of decarbonisation technologies, the extraction of raw materials, or in the area of security and defense.
Energy supply companies (ESCs):
Players investing in new, sustainable infrastructure in the areas of heat supply, electricity distribution, and the expansion of renewable energies.
Start-ups and scale-ups:
Young technology companies with high growth potential – for example, in the fields of AI, biotech, or climate tech – whose innovations are important for the energy transition but whose risk appears too high for normal banks.

Young technology companies with high growth potential and high investment requirements – for example in the areas of deep tech, AI, biotech, climate tech, and defense tech – are dependent on the provision of growth capital by VC funds. In order to better address this need, various future fund components are being bundled. The future fund is being increased.

The new, additional funds from the “Growth and Innovation Capital (”Future Fund II“)” will be used for venture capital financing, particularly in the areas of deep tech, biotech, and security and defense, as well as to cover existing financing needs in the SME sector.

The Germany Fund is supported by the federal government. Overall coordination is the responsibility of the Federal Ministry of Finance and the Federal Ministry for Economic Affairs and Energy . KfW implements the Germany Fund, using financial instruments such as guarantees, loans, and equity investments. The federal government develops the financing instruments in line with market requirements and needs in dialogue with the real and financial sectors.

The federal government is providing public funds, including guarantees, totaling around EUR 30 billion for the Germany Fund.

These funds are used to secure investments and enable private investors and companies to invest, or to enter into joint ventures with private investors on equal terms. Guarantees do not place an immediate burden on the budget, but only in the event that they are called upon. For example, guarantees of up to EUR 8 billion are being offered to secure investments in the industry and SME component. For the new “KfW Geothermal Energy Promotion Loan,” the federal government is providing a guarantee framework (warranty) of EUR 600 million and around EUR 50 million in budget funds. This instrument supports the financing of drilling and also serves to hedge the exploration risk.

KfW is also using its own leeway to strengthen Germany's future viability as a business location. This includes loans—for example, KfW IPEX-Bank has decided to increase its financing of arms exports in the future. In addition, KfW will use its financial strength to acquire securitizations in order to strengthen the financing conditions for small and medium-sized enterprises.

Attractive financing and investment opportunities are to be created in order to enable urgently needed investments in energy networks and the expansion of renewable energies.

The fund offers tailor-made financial products for the respective target groups. It uses not only traditional loans, but also more complex instruments to optimally spread the risk:

Target group	Financial instruments	explanation
Industry and SMEs	Hedging instrument for transformation industries	Bank guarantees/sureties for large transformation projects, e.g., expansion of production capacities, such as advance payment, contract performance, and warranty guarantees.
	Securitisations	Securitisation bundles receivables into tradable securities in order to relieve pressure on bank balance sheets and facilitate lending to small and medium-sized enterprises.
	Raw materials fund	The raw materials fund provides capital for investments in projects related to mining, processing and recycling of critical raw materials.
	Growth and Innovation Capital (‘Future Fund II’)	The new, additional funds from the ‘Growth and Innovation Capital (’Future Fund II‘)’ will be used for venture capital financing, particularly in the areas of deep tech, biotech, security and defence, as well as to cover existing financing needs in the SME sector.
Energy supply company	Geothermal energy subsidy loan	KfW loan channelled through banks to finance deep geothermal drilling, combined with risk protection from the federal government and MunichRe.
	Promotional loan Renewable Energies Plus for energy supply companies	Low-interest KfW loans for plants that generate electricity, heat and cooling from renewable energies and storage facilities; risk relief guaranteed by the federal government increases the willingness of intermediary banks to grant loans.
	Investment loan / Syndicated loan for energy supply companies	KfW loan arranged through a bank or KfW financing in conjunction with other banks; increases banks' willingness to grant loans by partially assuming credit risks.
Start-ups and scale-ups	Strengthening and focusing fund investments Growth and innovation capital (‘Future Fund II’)	In order to better address the needs in the areas of deep tech, AI, biotech, climate tech and defence tech, various future fund components will be bundled. The future fund will be increased. The new, additional funds from the ‘Growth and Innovation Capital (’Future Fund II‘)’ will be used for venture capital financing, particularly in the areas of deep tech, biotech, security and defence, as well as to cover existing financing needs in the SME sector.
	Scale-up direct	KfW Capital invests directly in innovative start-ups as a co-investor alongside private fund managers from the KfW Capital fund portfolio.
	First-of-a-kind loans	New programme for investments in innovative private sector funds in preparation. This programme will be used to invest in novel industrial first-of-a-kind technologies, products and processes developed by innovative start-ups and scale-ups.

The Germany Fund will be gradually developed further. In the energy sector, given the high investment requirements, it is necessary for private and municipal energy supply companies to have the equity capital base required for financing. In view of the great importance of municipal utilities in the area of electricity distribution and heating networks, the Federal Government will enter into dialogue with the Länder in order to develop suitable instruments for the equity capital problem in the very near future. According to the Basic Law, the solution to the equity problem of municipal companies lies primarily within the remit of the federal states. Many municipal utilities can already count on the strong commitment of their state governments. In some federal states, municipal regulations support the strengthening of equity capital by municipal shareholders, or subordinated capital guaranteed by state programmes is made available to municipal utilities. The good approaches that already exist in some cases are to be quickly turned into a ‘German standard’ in cooperation with the federal states.

As part of this, we are working to make it easier for investors and energy suppliers to come together. Attractive investment opportunities are to be created in order to enable urgently needed investments in energy networks and the expansion of renewable energies, if necessary also through the coordinated bundling of projects. In addition, we are examining further possibilities for developing equity-strengthening measures together with the federal states.

A coherent overall concept could be presented to the federal states at the Energy Ministers' Conference on Norderney from 20 to 22 May 2026.

Contact for representatives of the press and media
Verena Köttker

Director of Corporate Communications at KfW

KfW Press Office

As of 18 December 2025

Further information

The Raw Materials Fund

To ensure a sustainable supply of raw materials, the German government has set up a fund with the help of KfW to strengthen the supply of raw materials to German companies and the resilience of supply chains and the economy as a whole.

KfW Capital

As a wholly owned subsidiary of KfW, KfW Capital invests in German and European venture capital (VC) and venture debt funds, thereby strengthening their capital base.

The Germany Fund

The Germany Fund
Private investment for Germany's future

Who benefits from the Germany Fund?

Industry and SMEs

Energy