Applications are now open. The implementation of the project had long been uncertain.
The German government’s raw materials fund is moving into implementation, as announced by the Federal Ministry for Economic Affairs and Climate Action (BMWK) on Wednesday. The fund, endowed with one billion euros, is intended to support projects that contribute to securing the German and European raw material supply through extraction, processing, or recycling. Applications can now be submitted to the state development bank Kreditanstalt für Wiederaufbau (KfW), which can participate in raw material projects domestically and abroad on behalf of the federal government. Only critical or strategic raw materials, as defined by the EU’s Critical Raw Materials Act (CRMA), which came into force this year, are eligible. According to the BMWK, many of these resources, which are needed for green and digital technologies as well as the defense industry, are expected to face significant supply shortages in the future. At the same time, there are often strong import dependencies on individual countries.
According to the ministry, diversified financing will be used for the Raw Materials Fund, particularly equity instruments. The financing budget per project could range between 50 and 150 million euros, according to the KfW. In collaboration with the German Raw Materials Agency (DERA), the development bank is now expected to make an initial selection and present it to the federal government in the coming weeks.
As we reported, the launch of the fund had been uncertain, even though securing raw materials is considered one of the key factors for Germany’s competitiveness. Strategies and funds for raw materials from the EU and the German government must quickly show results, according to a study by the German Economic Institute (IW). German investments in foreign mining companies have sharply declined over the past decade. However, the IW questions the financial scope of the fund, noting that other countries, such as France and Italy, have each allocated over two billion euros for comparable measures, a figure also mentioned when the German Raw Materials Fund was first announced in April 2023.
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