The German special fund as an opportunity for sustainable infrastructure financing in Europe

But it is not only in Germany that investments in infrastructure projects are needed. There is an enormous need for infrastructure measures to be implemented throughout Europe. The rail sector in particular is the focus of attention here due to its potential contribution to achieving emission targets. A concrete example is the electrification of regional lines that were previously diesel-powered and the expansion of cross-border high-speed corridors, which can shorten travel times and replace short-haul flights.

Sustainable financing models will play an increasingly central role in the implementation of projects of this magnitude and will be in high demand. Financial institutions began years ago to make their portfolios increasingly sustainable. However, in order for banks to be able to provide ideal support for the investments to be implemented, efforts are needed on the part of all project parties involved.

The basis for sustainable activities in Europe is the EU taxonomy, a classification system that defines which economic activities are considered environmentally sustainable. It requires measurable impacts and verifiable evidence in predefined categories, depending on the type of investment. Only then can investments be classified as taxonomy-compliant and financed accordingly.

Interest in sustainable financing has also grown significantly on the capital market in recent years. Banks are continuously expanding their offerings and supporting companies in their green transformation. For example, green bonds have been issued in line with the EU Green Bond Standard to finance rail vehicles and network infrastructure. Similarly, sustainability-linked loans have been introduced, with interest margins tied to measurable emission reductions or energy efficiency indicators.

To promote this development, it is crucial that the data quality regarding sustainability in the projects to be financed is verifiable, up-to-date and, ideally, standardised. In order for sustainable financing to be offered in accordance with the EU taxonomy, financial institutions must demonstrate that they have audited the projects or used external auditors. Only then can banks offer companies simplified access to attractive financing conditions and structure financing for taxonomy-compliant projects.

For companies in the infrastructure sector that contribute to emission reduction and long-term climate neutrality, this currently offers unique opportunities to access a wide range of sustainable financing models. This applies not only to Germany and the special fund, but also at the pan-European level in the national and international infrastructure sector.