Germany has approved a €500 billion infrastructure and defense fund, dedicating €100 billion specifically to climate action and the energy transition. The move marks the country’s largest-ever green investment package and a key step toward achieving climate neutrality by 2045.
The climate-focused share of the fund, secured through negotiations with the Green Party, will be funneled into the existing Climate and Transformation Fund (KTF). This allocation was critical in gaining cross-party support, including the Greens, and ensuring the two-thirds parliamentary majority needed for constitutional changes.
“This agreement puts climate action at the center of Germany’s economic strategy,” said a Green Party representative involved in the negotiations.
Planned investments include expanding renewable energy infrastructure, improving energy efficiency in buildings and industry, upgrading public transport, and strengthening the power grid to support decarbonization.
The fund will operate outside of Germany’s traditional “debt brake” restrictions, allowing greater borrowing flexibility to meet long-term sustainability goals. It now awaits final approval from the Bundesrat.
Experts say the true impact will depend on swift, targeted deployment of funds and complementary structural reforms to boost clean energy adoption and reduce emissions across sectors.
