Germany unveils €100 Billion strategic investment fund to boost energy and raw materials
The new fund, named Deutschlandfonds, is part of the government's broader push to revitalize growth and safeguard key supply chains amid growing global geopolitical uncertainty.
The Federal Ministry for Economic Affairs and Climate Action confirmed that the fund will be seeded with at least €10 billion in public funds, to leverage that base to attract up to ten times that amount from private capital, including venture capital firms and family offices.
"Private capital is an essential tool for overcoming major economic challenges," the ministry stated, emphasizing that the fund will focus on growth, innovation, and competitiveness, in collaboration with both German and European investors.
The initiative is a key component of Chancellor Friedrich Merz's economic revival strategy after two years of economic contraction in Europe's largest economy.
It also reflects Berlin's heightened focus on financial security, particularly in light of Russia's invasion of Ukraine, escalating trade tensions under U.S. President Donald Trump, and China's increasingly assertive geopolitical stance.
While full details of the fund's structure, investment strategy, and timeline remain under discussion, government insiders expect an official launch between September and October, following parliamentary approval after the summer recess.
The fund has reportedly secured backing from Finance Minister Lars Klingbeil, and negotiations are ongoing regarding the precise financing mechanisms with the Finance Ministry and state-owned development bank KfW.
Sources also revealed that the previously stalled Raw Materials Fund, launched under former Chancellor Olaf Scholz to invest in biominerals projects, is expected to be folded into the Deutschlandfonds, streamlining Germany's strategic investment efforts.
However, questions remain over whether the fund's scope will eventually expand to address politically sensitive areas such as affordable housing, particularly in urban centers facing severe housing shortages. Officials have signaled that the fund's mandate could broaden post-launch, depending on political consensus and investment performance.
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