Germany is gearing up to launch a €500 billion ($541 billion) infrastructure fund, marking a significant shift in its fiscal regime, according to Latham & Watkins.
The fund will finance projects beyond the usual budgetary constraints, allocating €100 billion ($108 billion) to the federal states and municipalities, and €400 billion ($432 billion) to the federal government throughout a 12-year period.
The initiative aims to overhaul the country’s infrastructure network, modernizing areas such as energy, transport, digitalization, science, research and development, education, and hospitals. The fund also will allocate capital to initiatives aimed at helping Germany achieve carbon neutrality by 2045. In order to finance this initiative, Germany will issue state bonds.
The fund includes €100 billion ($108 billion) dedicated to climate-related measures, building on at least 10 percent of the annual federal budget that already has been dedicated to infras
