Friedrich Merz’s government is launching a “Germany Fund” to attract up to €130bn in private investments for higher-risk projects, a move designed to supercharge a massive public infrastructure and defence spending drive aimed at reviving the German economy.

The so-called Deutschlandsfonds, which will be anchored in state development bank KfW and led by its chief executive Stefan Wintels, would be seeded with about €30bn in public money and loan guarantees, according to two people with knowledge of the matter.

It will offer an array of investment vehicles and projects to channel private funds into sectors including tech and defence start-ups, energy infrastructure and critical minerals projects. An official announcement by the finance and the economy ministers is scheduled for Thursday.