Infrastructure

Investments in infrastructure - such as transport, utilities and renewable energy - are essential. However, this cannot be financed by public funds alone. Private capital is urgently needed. And this capital is available: institutional investors such as pension schemes and insurers are seeking suitable investment opportunities. Funds play an important role here by bringing together investors’ capital and investment projects.

To date, tax- framework -has prevented German funds from investing on a large scale in infrastructure projects such as renewable energy plants. As a result, German capital has been managed by fund managers at other European locations and has been channelled not into German, but into foreign projects.

With the Standortfördergesetz adopted in December 2025, these barriers are now being removed. The Act provides tax and regulatory relief to make investment in German infrastructure more attractive.

The Standortfördergesetz creates legal certainty for funds for long-term investments, particularly in German infrastructure. Funds can now invest in infrastructure project companies that operate, for example, ground-mounted photovoltaic installations. Real estate funds are now permitted to build and operate solar panels without restriction on rooftops – for example, on their logistics or warehouse facilities. The potential is huge. According to estimates, more than 15 million square metres of space suitable for solar installations – such as logistics buildings – are available in real estate held by German funds alone. This area could supply electricity to households in a major city such as Frankfurt.

The Standortfördergesetz is thus an important step towards mobilising private capital for the renewal and expansion of infrastructure and strengthening Germany as a financial centre in European competition. At the same time, it contributes to completing the Capital Markets Union by reducing existing disadvantages compared with other EU Member States.

At EU level, policymakers have been attempting for several years to mobilise institutional and private capital for infrastructure projects. In 2015, they introduced a dedicated fund category, the European Long-Term Investment Fund (ELTIF). However, it failed to gain traction, particularly due to impractical distribution rules. EU legislators have therefore adopted a reform, which came into force at the beginning of 2024. The new rules include more flexible investment options and the removal of distribution barriers, with the aim of making ELTIFs more successful.