Federal budget support for climate projects in developing countries fell 23% in 2025 from a year earlier. Growth in mobilised loans and private investment partly offset the decline in grants.
Germany provided €4.7 billion from federal budget resources for international climate protection and adaptation projects in developing and emerging economies in 2025, down from €6.1 billion in 2024. The development and environment ministries announced the figures on Tuesday, Reuters reported. The decline was nearly 23%.
Previous governments led by Angela Merkel and Olaf Scholz had pledged to increase budget-funded climate finance to at least €6 billion a year by 2025. The latest figure therefore fell short of that commitment.
Mobilised loans and private investment partly offset the decrease in public grants. Those funds rose to €6.1 billion. Germany’s combined contribution was around €10.8 billion, compared with approximately €11.6 billion the previous year. The categories differ: budgetary support includes grants, while mobilised finance consists largely of loans that recipients must repay.
Development Minister Reem Alabali Radovan said Germany was increasingly using capital-market funding and private investment as public budgets tighten. Environment Minister Carsten Schneider said the government wanted to expand the tools available for climate-friendly investment.
One channel is KfW, the state development bank, which raises money on capital markets and lends it for projects such as solar and wind farms in the Global South. The government described the total contribution as having fallen only slightly, but the larger share of repayable finance means the total does not represent grants alone.