Launch of the Germany Fund: German Federal Government and KfW set clear impetus

• Private investment is a key factor for more growth in Germany.
• The Germany Fund aims to mobilise private capital for investments to increase the competitiveness and future viability of the German economy.
• Various instruments specifically address the needs of industry, SMEs and young companies, start-ups and scale-ups, as well as energy supply companies.
• The Federal Government is providing public funds and guarantees amounting to around 30 billion euros for the Germany Fund – with the aim of stimulating a total of around 130 billion euros in additional investments.
• Launch in December with several instruments, which will be gradually expanded in the coming years

Today, the German Federal Government and KfW have launched the Germany Fund ("Deutschlandfonds"). This creates a framework in Germany that makes it easier for private companies and municipal organisations to invest in Germany on a large scale. The Federal Government is providing public funds and guarantees amounting to around 30 billion euros. This is intended to trigger investments totalling around 130 billion euros – as an investment campaign alongside state special funds. KfW is coordinating the Germany Fund and is the point of contact for advisory services to national and international investors.

Key areas where the Germany Fund aims to stimulate private investment include industry and SMEs, venture capital and energy infrastructure. This includes, for example, significant future investments in new technologies and production facilities, the expansion of renewable energies, heat networks and electricity networks, as well as the extraction of raw materials and the financing of innovative technologies in the fields of DeepTech, artificial intelligence (AI) and BioTech, along with the development of solutions to enhance defence capabilities.

Lars Klingbeil, Vice Chancellor and Federal Minister of Finance:

"The Germany Fund will enable us to mobilise private investment in the jobs of tomorrow. We are using public funds strategically to ensure that significantly more private capital is invested in Germany: in future sectors such as AI and biotechnology, in industry and SMEs, in our security and in our independence regarding critical raw materials. Germany is an attractive location for many investors. They see our innovative strength and our highly skilled workforce. We are creating a docking point for these investors with the Germany Fund. The Germany Fund can hedge risks and thus ensure that the best ideas emerge and grow in Germany."

Katherina Reiche, Federal Minister for Economic Affairs and Energy:

"The current situation of our economy makes it clear how much investment is needed to modernise our country. It is crucial to target private capital where innovation arises, where we can position our supply chains more resiliently and make Germany fit for the future. To this end, the Germany Fund mobilises private capital through public funds and thus enables effective investments in key future areas."

Stefan B. Wintels, Chief Executive Officer of KfW:

"The Germany Fund is an important impetus for more investments in Germany. In the coming years, it will be important to mobilise as much private capital as possible to strengthen Germany as an economic centre."

Who benefits from the Germany Fund? What components does it consist of?

The financing options offered by the Germany Fund are intended to be utilised by industrial companies, medium-sized enterprises, start-ups, young growth companies, private and municipal energy supply companies, as well as companies in the defence and raw materials sectors. In order to address the entire range of needs, the Germany Fund is not an investment fund, rather it represents an umbrella structure for various components that specifically address these needs.

In the Industry and SMEs component, the Germany Fund facilitates the financing of future investments in competitiveness. This includes the hedging instrument for transformation industries, which supports large-scale investments by industry, for example in the fields of electricity generation or hydrogen, or even in the automotive industry, with medium-sized suppliers, and in mechanical engineering. Through the Raw Materials Fund KfW is providing 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. Together with bank partners, KfW secures the delivery of the facilities by means of a surety. This enables the company to invest more.

The Energy component plans to hedge the borrowing of electricity distribution and heat network operators so that they can cope with their rapidly increasing investments in electricity distribution and heat networks in the coming years. In the geothermal sector, the risk of failing to find underground hot water sources during drilling (exploration risk) is covered. Furthermore, given the high need for investment, 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 German federal states and work to make it easier for investors and energy suppliers to connect.

Example: An energy supply company is planning to modernise or expand its electricity distribution network. In order to be able to finance the investment, KfW provides a loan of up to EUR 100 million in cooperation with the regular banks. The risks of the loan are shared between KfW and the regular banks. KfW receives a guarantee from the Federal Government. This enables energy providers to address substantial investment needs.

With immediate effect, KfW is also acting as a co-investor in the Start-ups and scale-ups component in order to invest directly in start-ups in Germany together with private investors from the KfW Capital fund portfolio. A maximum of 50 million euros per investment and a total of one billion euros will be available for this financing by the end of 2030. A further 300 million euros is available for investment in loan funds, which invest in the expansion of new industrial technologies. In order to bolster venture capital financing, the Future Fund ("Zukunftsfonds") will be increased and perpetuated from 2026 onwards.

Example: Young companies, for example from the defence sector, receive venture capital from funds in which KfW invests. This supports the development of future-proof products and promotes innovation.

The new, additional funds from the "Growth and Innovation Capital ("Future Fund II")" will be used for venture capital financing, in particular in the areas of DeepTech, BioTech and security and defence, as well as to cover existing financing needs in SMEs.

When does the Germany Fund launch?

The Germany Fund will be established in stages. In addition to a first project in the area of raw materials, the first three instruments will be launched in December 2025. These are:

• the hedging instrument for transformation industries,
• the loan programme for the promotion of geothermal projects, and
• a new financing instrument for start-ups and scale-ups.

In a second stage, further instruments will gradually be launched starting from 2026. These include instruments for modernising the energy infrastructure, new private loan funds for start-ups, as well as additional growth and innovation capital for the Future Fund, to further strengthen venture capital financing and address financing gaps for SMEs in Germany. Further expansion will also increase venture capital financing of innovative start-ups and scale-ups in the security and defence industry via fund investments or direct investments, in order to clearly focus on the technological defence capacity of our country. In addition, a further instrument will be set up in the securitisation segment to deepen capital market access and financing conditions for the German economy.

Further instruments will be established according to markets and needs. For example, the mobilisation of private capital is also important in the construction sector, to ensure affordable and sustainable housing in Germany. For this reason, the Federal Government has initiated a process in collaboration with KfW to develop a new module for housing construction under the umbrella of the Germany Fund. The aim of this module is to improve the situation on the housing market and boost private investments in housing construction.

As of: December 2025

Here you will find further information including a graphic (JPG, 829 KB, in German)(JPG, 829 KB) and the fact sheet (PDF, 124 KB, accessible)(PDF, 142 KB, accessible)

Go to the Germany Fund website: deutschlandfonds.info (in German)