Partner Munich
"Ensuring a well-functioning and resilient transport infrastructure is one of the key promises of the coalition parties in Germany’s new government."
“Mobility is a social and economic prerequisite for the functioning and prosperity of our country and must be aligned with reality, affordable, available and environmentally sustainable.”¹
Ensuring a well-functioning and resilient transport infrastructure is one of the key promises of the coalition parties in Germany’s new government. Renovating, expanding and modernising transport infrastructure – whilst achieving climate goals – requires sufficient financial resources. Financing is therefore crucial for improving transport infrastructure, especially in the road and railway sectors, which urgently need renovation.
This article provides an overview of the general financing principles for transport infrastructure and reviews the coalition parties’ plans for financing federal highways.
General Financing Structure
The coalition agreement outlines the overall financing structure applicable to all modes of transport. It is based on a three-tier system comprising:
- budget funds;
- user financing; and
- private capital, including public-private partnerships (“PPPs”), “to a limited extent”.²
"The state is expected to guarantee long-term, flexible and reliable financing for national core infrastructure."
The state is expected to guarantee long-term, flexible and reliable financing for national core infrastructure. With this in mind, the establishment of a special infrastructure fund is particularly noteworthy. The recent public statement (“Sofortprogramm”) indicates that this fund should be established as soon as possible. Furthermore, financing cycles should ensure that revenues benefit the respective mode of transport. Finally, the proportion of private capital in overall financing could significantly increase during this legislative period. This may involve not only PPPs but also borrowing by Autobahn GmbH, the national company responsible for administering federal motorways.
However, both private sector involvement and public/user financing raise several questions regarding implementation. In the case of federal motorways, constitutional limitations must be considered.
Federal Motorways: New financial resources through borrowing by Autobahn GmbH?
The current financing model for federal motorways relies on the federal budget: revenues from the administration of federal motorways by Autobahn GmbH flow into the federal budget and the Federal Government, in turn, provides the necessary funding.
Plans of the coalition parties
"The coalition parties intend to raise capital through borrowing by Autobahn GmbH."
As noted, the coalition parties intend to raise capital through borrowing by Autobahn GmbH. To facilitate this, the company would receive revenues from road administration (e.g. truck tolls and, potentially, passenger vehicle tolls). The coalition agreement mentions borrowing “to a limited extent,” which could refer to either traditional borrowing on the credit market or borrowing from the Federal Government via a shareholder loan.
-
Borrowing on the credit market
The current legal framework prohibits Autobahn GmbH from borrowing “on the market” (Section 7 of the Infrastructure Company Establishment Act – Infrastrukturgesellschaftserrichtungsgesetz). Therefore, this regulation would need to be amended to implement such a model. Additionally, it raises the question of whether a constitutional amendment is also required. This depends on the legal interpretation of Article 90, Section 1 of the Basic Law. Opinions differ on the scope of this article, which creates significant legal uncertainty.
Without a constitutional amendment—requiring a two-thirds majority in both the Bundestag and Bundesrat, which appears unlikely—there is a substantial risk that this financing model would be deemed unconstitutional.
-
Borrowing from the Federal Government (shareholder loan)
"The loan terms must reflect market conditions, particularly regarding the loan period and interest rate."
A shareholder loan, where the Federal Government acts as the lender, is not considered market borrowing under prevailing legal opinion. Therefore, Section 7 InfrGG does not restrict this model. However, the key issue is its compatibility with the “debt brake” (Schuldenbremse) in the Basic Law. The borrowing arrangement would only fall outside the scope of the debt brake if it is considered balance-sheet neutral and qualifies as a “financial transaction”.
Two aspects must be considered: firstly, the loan terms must reflect market conditions, particularly regarding the loan period and interest rate. Secondly, Autobahn GmbH must be able to repay the loan from its own revenues, not from the federal budget. Otherwise, the “debt brake” would be triggered. This would require amending the truck toll regulation to ensure Autobahn GmbH has sufficient independent revenue.
Conclusion
"Borrowing by Autobahn GmbH could help raise capital for renovating, expanding and modernising road infrastructure."
Borrowing by Autobahn GmbH could help raise capital for renovating, expanding and modernising road infrastructure. However, traditional borrowing poses a risk of violating the Basic Law. Therefore, borrowing from the Federal Government via a shareholder loan appears to be the more viable option—provided the loan terms do not conflict with the debt brake provisions.
At the same time, the overall project volume in the federal motorway sector is expected to increase significantly in the coming years. This adds to the importance of private financing models such as PPPs. A key question will be the extent to which legally robust financing structures can be established to mobilise sufficient capital while remaining compliant with constitutional requirements. For market participants seeking to engage in PPPs, a clearly defined legal framework and early consideration of financing constraints will be essential for successful project planning and structuring.
Click here to view all articles in our series about the German federal government’s 2025 coalition agreement which offer a legal and practical assessment of selected topics from the coalition agreement.
[1] Coalition agreement between CDU, CSU, and SPD – Responsibility for Germany, 21st legislative period, p. 25.
[2] ibid.
