Spotlight on Germany

As a globally competitive manufacturer of advanced technologies, Germany also scores highly on sustainability and innovation.

And the ‘Pact for Germany’ (Deutschland-Pakt) announced by Chancellor Olaf Scholz is a renewed attempt to streamline the regulations around infrastructure projects and accelerate approvals.

Even the government’s difficulties over the constitutional ‘debt brake’ (Schuldenbremse) offer opportunities for private infrastructure investors. With the state’s ability to spend on infrastructure significantly constrained, private funds will be vital to achieving the level of infrastructure development and renewal the nation needs.

Energy transition

Government policy towards advancing decarbonisation of the economy has played a central role in the infrastructure sector. Beginning in 2010, the country adopted its energy transition policy, the Energiewende, for which the core elements are renewable energy and energy efficiency.

Germany reached its goal of eliminating generation via nuclear power in April 2023 and has committed to 80% renewable power generation by 2030. The government is also actively promoting the development of hydrogen as a clean fuel in transportation.

Although the country has made substantial investments in LNG to replace lost Russian gas imports, it is simultaneously expanding its capacity for renewable power, with 30GW intended to be in offshore wind. In early 2023, Germany auctioned a 7GW wind site, which was won by bp and TotalEnergies for projects expected to total EUR 12.6 billion. There are many solar parks in construction around the country. New power lines are being planned to handle the additional renewable generation capacity. Projects related to strengthening grid connections in the west and south are in progress and will also facilitate the expansion of power generation from renewables. Germany has also become a global leader in the development of battery storage.

Transportation

Germany’s transportation sector has been given a high priority in terms of infrastructure expansion. The country is now halfway through the Federal Transport Infrastructure Plan 2030 which was slated to invest EUR 270 billion between 2016 and 2030 on transport infrastructure. Rail and roads are receiving the bulk of the funding and the initiative includes multiple autobahn projects, along with the Stuttgart and Hamburg rail projects and an expansion at Frankfurt airport.

Europe’s longest undersea tunnel (18 km) for combined road and rail is currently under construction between Germany and Denmark. The Fehmarnbelt Fixed Link, which is due to come into service in 2029, will include two double-lane highways and two electrified rail tracks.

Digitalisation

In addition to energy and transport, a focus on digitalisation is also underway. Germany now has a national Digital Strategy which it plans to implement by 2025 and is constructing data centres to handle the new load. The strategy identifies 25 digital policy areas and provides funding for 18 ‘lighthouse’ projects.

Three digitalisation projects cut across multiple policy areas and are seen as the highest priority to implement:

• Access to high-speed internet and nationwide digital infrastructures based on fibre optic backbones and high-performance mobile communication networks.
• Technical standards such as 5G/6G with software-defined networks facilitating new social and economic opportunities like the Internet of Things.
• Digital identities linked to electronic personal identity documents (e.g. on smartphones) to enable people to apply for digital administrative services and perform internet transactions easily and securely.