Germany launches EUR30 Billion Fund to Mobilize Private Investment

Germany announced the "Deutschlandfonds", a '30 billion euro initiative ($35.22billion) designed to mobilize private capital for investments in 'energy transition, technology and industrial modernization, as Europe’s largest economy strives to regain its competitiveness.

The fund will be coordinated by the finance ministry and implemented?by KfW (the state-owned development lender), and it will use equity stakes, guarantees, and loans to reduce risk in private investments, rather than direct state spending.

The German government has described the fund as a "temporary seed financing" to help Germany transform its economy after years of stagnation.

The initiative targets three sectors: small and medium-sized businesses pursuing decarbonisation projects and vital raw materials, energy utilities investing into renewable infrastructure and start-ups and scale-ups working in biotech, deep tech and defence technology.

The specific measures include up to 8 billion euro in guarantees for industrial?transformation?projects and a 600-million euro framework of guarantee for geothermal drilling.

KfW will also finance defence exports, and purchase securitizations in order to strengthen lending to SME's. Reporting by Maria Martinez Editing Madeline Chambers

(source: Reuters)