Coalition agreement between CDU/CSU and SPD - Investment opportunities in the infrastructure sector

The coalition agreement recently presented by CDU/CSU and SPD opens up numerous opportunities for investors in the energy and infrastructure sectors. In addition to the use of state funds in the context of awarding contracts and subsidies for the transformation and modernisation of German infrastructure, this applies in particular to the energy, transport and telecommunications sectors. However, there is still a lack of concretisation for the EUR 500 billion special infrastructure fund.

The coalition agreement sends a clear signal that the energy transition can essentially be driven forward with investments in renewable energies, albeit subsidies for the expansion of established technologies are to be reduced. Germany's strategic shift towards affordability, cost efficiency and security of supply offers a wide range of investment opportunities and positions the country as a pioneer in the development of sustainable energy and modern infrastructure. With the first investment priorities from the coalition agreement, the future coalition is continuing on the path taken by the traffic light coalition and is only making a few course corrections.

However, all projects from the coalition agreement are subject to the budget proviso. It will now be important to translate the political announcements into concrete laws and funding programmes and to use the additional billions from the special infrastructure fund in a targeted manner.

The special infrastructure fund: distribution and utilisation have yet to be specified

As already reported (see also our article from 27 March 2025), EUR 100 billion from the special fund for federal states and municipalities and EUR 100 billion for the Climate and Transformation Fund have been earmarked. The funds for the Climate and Transformation Fund will be added in stages at an annual rate of around EUR 10 billion. Measures totalling around EUR 150 billion will be financed from the federal share of the special fund between 2025 and 2029.

The coalition agreement only mentions two specific individual measures for which the special infrastructure fund is to be used: Firstly, the renovation of the high-performance corridors in the rail network is to be financed by the special infrastructure fund and linked to its duration. Secondly, the share of the transformation fund for hospitals that was previously to be provided the statutory health insurance funds is to be financed. Otherwise, it remains to be seen how the special fund will be specified in the law establishing it.

The Climate and Transformation Fund is to be reorganised. The efficiency of the allocation of funds is to be increased and more closely aligned with the criteria of CO₂ avoidance and social equalisation. Micro-programmes with a funding volume of less than EUR 50 million are to be phased out.

In order to accelerate the implementation of the projects, an infrastructure future act is planned, which will regulate the acceleration of planning and approval procedures. The projects are to be given an overriding public interest and thus legally prioritised.

Infrastructure for the energy transition

In the area of energy, the coalition agreement focuses on the compatibility of climate protection, economic competitiveness and social balance. All areas are to be geared towards affordability, cost efficiency and security of supply. In addition to renewable energies, the coalition agreement also emphasises gas-fired power plants, hydrogen from various sources and CCU/CCS technology. CDU/CSU and SPD emphasise a market-driven approach, which is to be supported by transparent and predictable policies. In capital market law, a legally secure and European-competitive framework for investments by funds in infrastructure and renewable energies is to be created.

In the energy sector, the coalition agreement sets the following priorities in particular:

• Acceleration of planning and authorisation procedures: In order to speed up planning and authorisation procedures, RED III in particular is to be swiftly transposed into national law. The establishment of expert pools, an extension of the presumption of consent and extended continuation protection of replacement facilities are to be examined.
• Energy infrastructure investment fund: An investment fund for energy infrastructure is to be set up. This is to combine public guarantees and private capital to provide equity and debt capital.
• Renewable energies: The promotion of solar energy in conjunction with storage systems is to be designed in a way that benefits the system. Car park, agrivoltaic and floating photovoltaic are to be facilitated. The area targets for wind energy for 2032 are to be evaluated, which may lead to less expansion than envisaged by the traffic light coalition. Citizens' electricity is to be made easier and the permissible amount of land leases for wind turbines subsidised under the EEG is to be limited. In the area of offshore wind energy, issues with shading effects are to be tackled and greater co-operation with other countries bordering the North Sea is to be established.
• Hydrogen technology: In the hydrogen ramp-up phase, not only green hydrogen is to be used, but also other colours of hydrogen. Later, a switch to climate-neutral hydrogen is planned. Imports are expected to play a major role in the supply of hydrogen, but domestic production is also to be made possible both in the form of large electrolysis plants that are beneficial to the system and in the form of decentralised and widespread production. In the field of hydrogen, national and European funding instruments such as H2 Global, IPCEI projects and programmes for SMEs are to be used. The planning of the hydrogen core network is to be expanded with additional routes to enable demand-oriented connection of the industrial centres, also in the south and east of Germany, taking into account hydrogen storage facilities.
• CCU/CCS technology: A package of enabling legislation is to be passed immediately after the start of the legislative period. For hard-to-avoid emissions from the industrial sector and for gas-fired power plants, overriding public interest in the construction of CCS/CCU plants and pipelines is to be established. It is to be expected that the considerable preparatory work carried out by the traffic light government will be followed up.
• Power plant strategy: Open-technology tenders for gas-fired power plants should be organised as quickly as possible. The construction of up to 20 GW of gas-fired power plant capacity is planned by 2030.
• Grid and storage expansion: High-voltage direct current transmission grids are to be constructed as overhead lines wherever possible. The uniform electricity bidding zone will be maintained. The rollout of smart meters in the distribution grid is to be accelerated. Investments in energy storage systems are to be expanded and incentivised.
• Energy prices: Energy prices are to be reduced by lowering the electricity tax, reducing levies and grid charges and other measures.

Modernisation of the transport infrastructure

The modernisation of transport infrastructure is an investment priority in the coalition agreement. Financing cycles are to be introduced for the various modes of transport, with the revenue going to the respective mode of transport. Financing is to be based on a three-pillar model in which public-private partnerships (PPPs) are to be used to a limited extent in addition to budget funds and user financing.

One focus of the planned investments in the area of transport infrastructure is on rail, but other modes of transport are also being considered:

• Rail transport: The future coalition plans to develop the so called “Infraplan” as a statutory control instrument with a binding funding commitment (railway infrastructure fund). Investment in the rail network is to be increased for both main and secondary lines. In addition to the special fund, financing should continue to come from the federal budget and from railway access charges. Furthermore, digitalisation and electrification of the rail network are to be financed from the Climate and Transformation Fund. A fundamental railway reform is planned in the medium term.
• Road transport: Autobahn GmbH is to be given limited borrowing capacity and the revenue from the truck toll will be made available to it. The expansion of the charging network and rapid charging network for electrically powered cars and lorries is to be accelerated and financing secured.
• Air and water transport: In air transport, international flight connections from German airports are to be improved and regional airports will continue to be supported. In water transport, additional funding is planned for the upgrading of waterways, locks, seaports and inland harbours.

Infrastructure for AI and telecommunications

According to the ideas of the future coalition partners, Germany should become an AI and start-up nation (see also our article from 11 April 2025). This will also require massive investment in infrastructure:

• Data centres: Germany is to be strengthened as a data centre location by supporting clusters as well as regional and decentralised locations. The federal government will strengthen the core infrastructure required for the digitalisation of the administration, such as networks and data centres. The integration of data centres into the electricity grid is to be facilitated by a digitalisation campaign among electricity grid operators to achieve greater transparency regarding grid connection capacities. Data centres are also to be established in eastern Germany in particular.
• Optical fiber expansion: Optical fiber network expansion should be driven forward nationwide right into every (rented) home. Where market-driven expansion is not possible, funding programmes for mobile service and optical fiber network expansion should be used. A new acceleration law should be introduced to define mobile service and optical fiber expansion as an overriding public interest.

Conclusion: Numerous potentials for investors waiting to be realised.

 

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