© Federal Ministry for Economic Affairs and Energy

What is the Deutschlandfonds (Germany Fund)?

Investing on a large scale in Germany is set to become easier. The  Deutschlandfonds is designed to mobilise private capital – whether for electricity and district heating networks, geothermal energy, or cutting-edge technologies. Here’s how it is strengthening competitiveness and future viability.

^{What it’s about: the  Deutschlandfonds is designed to stimulate private investment in industry and SMEs, startups and scaleups, as well as in energy infrastructure.}

Private investment is a key driver of competitiveness and long-term growth in Germany – particularly for transforming the energy system towards renewable sources. But how can, for example, an energy utility finance the modernisation or expansion of its electricity distribution or heating network? To help make such investments possible, KfW, working with commercial banks, provides guarantees to private banks through the  Deutschlandfonds. In turn, KfW receives a federal government guarantee. This reduces lending risks for banks and enables them to provide additional credit. 

^{Unlocking investment of around €130 billion}

Through the  Deutschlandfonds, the Federal Government and KfW have created a framework that makes it easier for private and municipal companies to invest at scale in Germany. The Federal Government is backing the Fund with public funding and guarantees totalling around €30 billion. This is expected to trigger overall investment of roughly €130 billion – a powerful investment boost alongside the Federal Government’s Special Fund.

The scope goes far beyond energy. The Fund also supports investment in new technologies and production facilities, raw material extraction, and innovation in areas such as deep tech, artificial intelligence and biotechnology. It also helps finance solutions that strengthen defence capabilities. Coordinated by KfW, the Fund is accompanied by advisory services for both national and international investors.

The  Deutschlandfonds is open to industrial companies, SMEs, startups and fast-growing young firms, as well as private and municipal energy utilities and companies in the defence and raw materials sectors. Its strength lies in its modular structure, bringing together a wide range of financing needs through tailored building blocks.

^{Tailored building blocks for real-world investment needs}

The ‘Energy’ building block secures lending for electricity distribution and district heating operators, helping them cope with the sharp rise in network investment expected in the coming years. In the geothermal sector, it also covers the risk that drilling may fail to tap usable hot water sources. Given the high capital requirements involved, private and municipal energy providers also need a solid equity base – an issue the Federal Government plans to address through dialogue with the Länder.

The ‘Industry and SMEs’ building block focuses on forward-looking investment to strengthen competitiveness. This includes a risk-sharing instrument for transformation industries, supporting large-scale industrial projects – for example in power generation, hydrogen technologies or the automotive sector. Medium-sized suppliers and mechanical engineering companies also benefit. In addition, the Federal Government’s Raw Materials Fund provides equity stakes and KfW loans to support projects that secure critical raw materials for the German economy, such as the development of domestic lithium extraction.

Under the ‘Startups and Scaleups’ building block, KfW is now stepping in as a co-investor. Together with private investors from the KfW Capital fund portfolio, it invests directly in startups in Germany. Up to €50 million is available per investment, with a total of €1 billion earmarked through to the end of 2030. A further €300 million can be channelled into loan funds supporting the scale up of new industrial technologies. To strengthen venture capital further, the Future Fund will be expanded and made permanent from 2026. 

Additional funding from the Growth and Innovation Capital (Future Fund II) will primarily support venture capital investments in deep tech, biotech, security and defence, while also helping to meet existing financing needs in the SME sector.

The  Deutschlandfonds was launched on 18 December 2025, initially comprising a risk-sharing instrument for transformation industries, a loan programme for geothermal projects and a new financing instrument for startups and scaleups. Further components will be added step by step over the coming years.