Berlin launches its 'Deutschlandfonds': 130 billion for energy and start-ups

The 'Deutschlandfonds', the fund for Germany, promised in different configurations by different parties during the election campaign and ended up in the government pact between the Cdu-Csu Union and the SPD, is taking shape. It will count on a basis of 30 billion in public guarantees and bonds (which would only burden the budget in the event of enforcement), with the pooling of already existing appropriations and 600 million in new capital.

The goal is to reach 130 billion, for energy infrastructure and start-ups, mobilising 100 billion in private investment.

The announcement came on 18 December. Almost at the same time, the National Finance Agency, which manages public debt, announced that Germany will increase bond issues by one fifth in 2026, rising to a record 512 billion.

The Berlin government is deploying unprecedented resources to revitalise and modernise the country. In March 2025, parliament amended the constitution to remove a 500 billion special infrastructure fund (over 12 years) from the debt brake and to exempt all defence spending above the 1 per cent of GDP threshold. On Wednesday, the Bundestag approved a maxi-allocation of about 50 billion for the purchase of armoured vehicles, anti-aircraft missiles and satellites for the armed forces.

The newly announced Deutschlandfonds will be coordinated by the Ministries of Finance (in the hands of the Spd) and Economy (led by the Cdu) and will be managed by the public development bank KfW. The instrument is aimed at industries and small and medium-sized enterprises pursuing decarbonisation projects and production of critical raw materials (absorbing the current ad hoc fund); energy utilities investing in renewable infrastructure; start-ups and scale-ups in the field of 'deep tech', artificial intelligence, biotechnology, defence.