December 18, 2025 – Berlin, Germany – Germany has officially launched its €30 billion ($35.2 billion) Deutschlandfonds, a major initiative designed to mobilize private capital for investments in energy transition, technology innovation, and industrial modernisation. Coordinated by the German finance and economy ministries and implemented through the state-owned KfW development bank, the fund aims to strengthen Germany’s global competitiveness while supporting sustainable economic growth.

The initiative targets private investment in key sectors by using guarantees, loans, and equity stakes to reduce financial risk and encourage participation from private investors.

Objectives of the Deutschlandfonds

The fund is described by the government as “temporary seed financing” to accelerate Germany’s economic transformation after years of stagnation. The program aims to:

• Mobilize around €130 billion in private investment alongside the initial €30 billion public contribution.
• Support industrial decarbonization projects, including small- and medium-sized enterprises (SMEs) investing in critical raw materials and green technologies.
• Promote energy infrastructure investments, particularly renewable energy projects by utilities.
• Enable startups and scale-ups in deep tech, biotech, and defense technology sectors to access additional financing.

Key Measures and Guarantees

According to KfW, approximately 95% of the fund is allocated for guarantees, already approved by parliament for 2026. Additional initiatives include:

• Up to €8 billion in guarantees for industrial transformation projects.
• A €600 million guarantee framework for geothermal drilling projects.
• Expanded venture capital financing to support startups and scale-ups.
• Financing for defense exports and securitization programs to enhance lending to SMEs.

Economy Minister Katherina Reiche emphasized the fund’s strategic importance: “What is crucial is to direct private capital specifically to where innovation is created, where we can make our supply chains more resilient and make Germany fit for the future.”

Impact on Startups and Innovation

The fund allocates €1 billion for startups by the end of 2030, addressing the country’s historically low venture capital investment rates. The German Startup Association welcomed the initiative, noting that Germany lags behind other countries in startup financing—investments per capita were €90 in Germany compared to €510 in the U.S. in 2024.

By supporting high-potential startups and industrial innovation, the Deutschlandfonds seeks to enhance Germany’s technological edge, drive job creation, and position the country as a leader in sustainable industrial growth.

Strategic Significance

The Deutschlandfonds represents a coordinated approach to public-private collaboration, leveraging state-backed guarantees to unlock private investment in transformative projects. By focusing on energy transition, industrial modernization, and cutting-edge technology, the fund aims to make Germany resilient, innovative, and globally competitive in the decades ahead.