Germany Loosens “Debt Brake” to Fund Climate and Infrastructure Investments

In a move hailed as a turning point for German fiscal and climate policy, the outgoing Bundestag has approved a constitutional amendment allowing €500 billion in new public debt over the next twelve years. The decision, backed by a broad parliamentary majority, lifts Germany’s longstanding “debt brake” and enables substantial investments in infrastructure and climate action.

One fifth of the funding will flow directly into Germany’s Climate and Transformation Fund (KTF), supporting the country’s path to climate neutrality by 2045. Additional funds may be directed toward climate-relevant projects such as heating grid modernisation, rail upgrades, hydrogen infrastructure, and energy-efficient building renovations. The remaining budget is earmarked for federal and state-level improvements in transport, digitalisation, healthcare, and education.

For Swedish cleantech companies looking to expand in Germany, this shift represents a significant opportunity: demand is expected to rise for clean energy technologies, sustainable mobility solutions, energy-efficient systems, and digital infrastructure.

Stay tuned as the Swedish-German Cleantech Platform continues to track how the new investment framework translates into concrete initiatives—and where collaboration opportunities may arise.

If you have any questions, please reach out to us!

Contact:
Christiane Binsteiner Foberg, German-Swedish Chamber of Commerce
christiane.binsteiner@handelskammer.se

Photo: Thomas Trutschel / photothek