The German government is heavily investing in infrastructure and aims to attract investors. Bankers and investors are gearing up for a new infrastructure boom in Germany, driven by the Finance Minister’s budget plan to incur nearly €850 billion in debt this legislative period. Of this, €500 billion are earmarked for infrastructure over the next 12 years. Private capital will also be mobilised to complement public investments. The increase in state investment fuels investor hope for a mix of public and private infrastructure spending. The significant signaling effect of the infrastructure package suggests it could attract international investors and potentially quadruple the investment sum to around €2 trillion. However, certain criteria must be met to encourage private investment in infrastructure projects like such as power grids and fiber optic cables.
“To enable public-private partnerships and co-investments, particularly state aid and antitrust procurement hurdles must be addressed”, says White & Case partner Stefan Koch.
He also highlights that the government could incentivise private investments by assuming loss risks and improving the risk-return ratio of large investments.
Read the full article here (German)
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