Berlin Approves €5 Billion Fund For Climate Action

The money is intended for projects that accelerate climate protection in real estate and other sectors

Berlin has approved a €5bn special fund for climate action to accelerate the conversion to fossil-free energy and the reduction of emissions. The sum is to be financed through loans and will flow into projects that are not paid for through the regular state budget. A bill will now be discussed in the German capital’s House of Representatives and then passed with the aim of starting the fund in 2024.

In a separate announcement, the senate has also signalled the city’s intent to use more geothermal energy for heating to support its plans towards achieving climate neutrality. Finance senator Stefan Evers cited social and climate policy reasons for the approach taken to establish a special fund, highlighting the sharply increased energy prices as a result of the Russian invasion of Ukraine and the increase in extreme weather events indicating the necessity to act on climate protection.

“The investment requirements are so high in volume that they cannot be represented within the framework of normal budgeting,” said Evers. “To wait would mean damage for Berliners and this city. And that must be averted.” He added that hesitant action would also drive up costs.

Specifically, the money is intended for projects that accelerate climate protection in the building sector, energy production and supply, transport and mobility, and the economy. In the case of buildings, this may involve energy-efficient renovation, and in the case of energy, new infrastructure for the heat transition. In mobility, Evers cited measures such as better public transport, support for cycling and walking and a conversion to electric drive fleets.

Loans would be taken out and disbursed on a project-by-project basis. At the core of the law is a credit authorisation of €5bn. In 2026, it will be reviewed and a decision will be made on a possible increase to up €10bn. The special fund for climate protection is not the first in Berlin. The state already has several such funds outside the actual budget, including the Special Infrastructure for the Growing City.