New “Germany Fund” aims to unlock private capital for municipal energy infrastructure
Clean Energy Wire
A new “Germany Fund” will complement the country’s 500 billion-euro special fund for infrastructure and climate neutrality to finance energy infrastructure modernisation, the coalition government of the conservative Christian Democrats (CDU) and the Social Democrats (SPD) has agreed. The aim is to unlock private capital through public seed funding and bundle several project funds under a single roof, such as support for start-ups or a fund for securing access to critical raw materials, the government said in a document shared by Table.Media that outlines the results of a coalition agreement on energy policy questions on 13 November.
A central focus is helping municipal utilities finance high upfront costs for decarbonising heating networks, expanding renewable power sources and upgrading grids. A recent analysis by consultancy PwC estimated that German utilities face a 350-billion-euro funding gap for regional energy transition by 2045. “By leveraging private capital, the Germany Fund will make a significant contribution to guaranteeing a secure, sustainable, and affordable energy supply,” the government said.
The association of Local Utilities (VKU) said the Germany Fund could “provide fresh momentum” for the energy transition. Modernising heating networks in particular entails significant risks for utilities, the lobby group argued, adding that alleviating investor restraint through guarantees would therefore be an important tool for ensuring progress in the sector.
In their coalition treaty, the parties said the fund should be endowed with at least 10 billion euros in public capital, which should then grow to up to 100 billion euros through private investments and guarantees.
