Guglielmo Valastro
Policy & Research Executive
Executive Summary
Germany emerged as Europe’s most attractive infrastructure market in GIIA’s Q2 2026 Pulse Survey and its infrastructure push has only gathered pace since then.
Looking at recent political developments in Germany, you would be forgiven for thinking that there is growing uncertainty in a market that’s often seen as Europe’s bellwether. But looking at our most recent Pulse Survey of investor sentiment, Germany ranked as the most attractive infrastructure market in Europe, second only to Canada globally. Respondents pointed to the €500 billion Infrastructure Special Fund, the €30 billion Germany Fund, efforts to accelerate planning, and a substantial backlog of infrastructure repair and modernisation as positive signals from the market. Since then, optimism has increased further.
Germany received a significant vote of confidence this month when the United Arab Emirates (UAE) announced plans to invest €40 billion across German industry, advanced technology, artificial intelligence, digital infrastructure and energy, including approximately 1GW of new data centre capacity. Germany has committed to creating favourable conditions for projects to proceed, as its domestic investment architecture moves from policy design towards deployment.
Despite previous headwinds in capital deployment, the €500 billion Special Fund for Infrastructure and Climate Neutrality is now being made available across transport, digitalisation, energy and other infrastructure over a 12-year period. The 2026 economic plan allocated €58.1 billion through the fund, and in June the federal government published its first monitoring report and investment dashboard to track deployment progress.
The Germany Fund has also begun supporting investment. Launched in December 2025, it is an umbrella of financing instruments backed by around €30 billion of public funds and guarantees, with the ambition of mobilising approximately €130 billion of total investment. In August, the fund supported a €1 billion financing package for a wind-turbine manufacturer alongside private banks. KfW also launched new credit instruments for electricity distribution and grid-connected heating and cooling, designed to expand financing capacity for energy infrastructure.
In July, Germany’s Infrastructure Future Act came into force, introducing a series of measures to accelerate the planning and approval of major projects. The law removes some works from formal approval procedures, introduces four-year decision deadlines for certain major transport projects and moves planning processes to a digital-by-default model.
As GIIA highlighted in its comparative Competing for Capital report examining the world’s largest infrastructure markets, Germany already has several advantages in the global race for infrastructure investment: established regulated network revenues, large-scale public investment platforms and a rules-based framework capable of providing long-duration cash flows. The report also identified the remaining weakness for the market to address.
Germany still lacks a single investor-facing national infrastructure pipeline, while projects outside regulated sectors remain fragmented across federal, state and municipal authorities. Questions also remain over the additionality of investment through the Special Fund. While the federal government says its 2026 budget meets the additionality requirement, the ifo institute found that in 2025 much of the new borrowing replaced investment that would have otherwise been funded through the core budget.
A shift ten years in the making
Germany’s ascent to the top tier of infrastructure investment markets has been a decade in the making. The policy choices now supporting capital deployment sit within a broader shift in German and European competitiveness policy that began well before today’s infrastructure push.
The 2016 acquisition of robotics company KUKA by China’s Midea became a turning point in German industrial policy. Researchers have described the subsequent “KUKA moment” as an important catalyst in Germany’s move towards a more active European industrial policy, as policymakers placed greater emphasis on strategic technologies, supply chain resilience and Europe’s long-term competitiveness. The resulting Franco-German realignment mattered because Germany had previously been a major brake on a more activist EU industrial Policy; once Berlin shifted, a broader European competitiveness agenda became politically viable.
The resulting Industrial strategy 2030, published in 2019, responded to rapid technological change, intensifying global competition in advanced manufacturing and the growing strategic importance of digital technologies. It’s three pillars focused on improving the policy environment for industry, including expanding infrastructure and cutting red tape, mobilising private capital into new technologies, and maintaining technological autonomy; embedding a more active role for public policy in shaping where capital and capability are built.
Germany is increasingly seeking to attract capital into assets that expand productive and technological capacity at home. The UAE commitment fits squarely within that approach, bringing international capital into new digital, energy and industrial infrastructure located in Germany.
What’s next for Germany?
GIIA’s Spring Pulse Survey identified data centres as the most attractive infrastructure sector in Europe. But delivering 1GW of new German capacity will require considerably more than the capital for the facilities themselves: grid connections, generation, storage, land and planning will all need to keep pace.
At the same time, the German government has now published its roadmap for phasing out fossil fuels by 2045, with a target for renewables to provide 80% of electricity generation by 2030. The roadmap also points to further grid expansion as part of that transition.
A recent global bond sell-off has pushed long-term borrowing costs higher, with Germany’s ten-year Bund yield reaching 3.57% in September, the highest level since 2009. Against a more demanding political and financing backdrop, Germany has nevertheless moved materially since GIIA last polled members on their view of the market. Public capital is flowing, planning rules are being reformed and international investors are committing substantial sums. However, greater clarity over the use of public funding and the extent to which it generates additional investment should be a priority going forward.
Testing the investor view with GIIA’s Pulse Survey
GIIA investor members now have the opportunity to contribute to ongoing assessment of Germany’s attractiveness in the next Pulse Survey (currently live).
After Germany rise to the top of the European rankings in H1, the current survey will test whether the country’s policy and investment push is changing conditions on the ground – where new opportunities are emerging, where capital is being deployed and which barriers still stand in the way.
If you would like to get involved with the survey, you can contact gvalastro@giia.net for more information.