Making Germany fit for the future with PPPs

A lack of fiber optic networks, damaged roads, and insufficient renewable energy sources: Germany's infrastructure is in urgent need of expansion. But that costs money. According to a 2024 study by the German Economic Institute in Cologne, Germany will need to invest at least €600 billion over the next ten years, and that is likely to be a bottom-line estimate. After all, around 11,000 highway bridges are currently in need of renovation.

Luckily, the German government has also acknowledged this necessity and approved the new Infrastructure and Climate Neutrality Fund (“Sondervermögen”) worth over €500 billion. However, it is questionable whether this capital alone will be enough to make Germany fit for the future as a business and industrial location.

“Sondervermögen” plus cooperation

It would therefore make sense for the public sector to cooperate with the private and credit sectors. This is how the transformation can succeed. Public-private partnerships (PPPs) can play a decisive role in advancing Germany's infrastructure as quickly as possible. They offer the opportunity to “leverage” the €500 billion provided by the government for the transformation as equity capital through additional financial resources from the private sector. In the ideal case, this could result in investments of €1.5 to €2.5 trillion.

At the EU level, this has already been achieved with the Invest-EU Fund. Here, private capital amounting to fourteen times the original public funds was raised.

For this to work, it will require an enormous effort and, above all, the solidarity of all those involved, from politics and business to the banking industry. The good news is that there are already many examples of successful partnerships, and there is a high level of willingness to implement them.

It can also be helpful to look abroad: in Australia, the UK, or Canada, for example, PPPs have contributed significantly to the realization of high-quality infrastructure projects by combining the strengths of the public and private sectors. This shows the advantage of such partnerships. The public sector provides the necessary regulatory framework and supervision, while the private sector contributes innovation, efficiency, and capital. We in Germany should learn from this in order to adapt our models to the specific requirements of our country.

There are already successful projects in Germany, too. For example, Terminal 2 at Munich Airport, which went into operation in 2016, was implemented as part of a public-private partnership. In addition, publicly owned companies, such as municipal utilities, are increasingly seeking private partners for the implementation of increasingly complex projects such as data centers, fiber optic expansion, and energy generation.

As Europe's largest economy, especially Germany is in a unique position to benefit from a PPP infrastructure upswing. It is particularly important to focus on areas such as mobility, digitalization, and the energy transition in order to strengthen the location of Germany, promote innovation, and boost the economy again. Public-private partnerships can be an important driver for this development. And ultimately, society as a whole will benefit.

This article was published in November 2025 in the special edition of FINANCE magazine for Structured FINANCE 2025.