The Greens are proposing a SME transformation fund with 1.5 billion euros to enable direct investments in small and medium-sized companies so that they can better finance investments towards climate neutrality.
The fund is intended to become a minority shareholder and support companies in investments in energy efficiency, electrification, process heat, circular economy, digitalization and climate-friendly products.
The Greens introduced the fund into the budget negotiations and proposed an initial filling of 350 million euros for 2027, but the Union and the SPD rejected the request.
The Greens criticize cuts to the Central Innovation Program for SMEs (ZIM) and other programs for small and medium-sized businesses and are calling for an increase in funding for these programs.
Berlin. The Green Party parliamentary group has drawn up a proposal to reorganize state support for small and medium-sized businesses. Economic politician Sandra Stein and housekeeper Katrin Uhlig suggest that a fund should be set up with which the state can invest directly in medium-sized and small companies. The fund is to be endowed with a total of 1.5 billion euros. The application is available exclusively to the Handelsblatt.
The background to the idea is to better support German medium-sized businesses in the transformation to climate neutrality. However, companies often cannot make the massive investments required for this on their own.
Existing state aid for industry from the Climate and Transformation Fund (KTF), the federal funding pot for financing the energy transition and climate protection, is often intended for larger corporations. “In view of the major challenges that medium-sized companies face, this is a real obstacle to innovation,” said Stein.
Given the investments required, medium-sized businesses are facing the “biggest transformation in decades,” says the Greens’ proposal. Although own funds are currently the most common source of financing, 60 percent of small and medium-sized enterprises (SMEs) expect to need external capital in the future, according to a survey by the KfW development bank.
The Greens wanted to address this obstacle with the “SME Transformation Fund”. The idea: Instead of paying out grants, the fund invests directly in the companies. This means that the state can also secure loans from banks to the company, which makes access to them easier.
This would turn a one-off funding into a long-term effective instrument for the transformation of medium-sized businesses. “It gives companies the capital and financial support to make their production efficient, electric and future-proof,” said budget politician Uhlig.
Investments in “energy efficiency, electrification, process heat, circular economy, digitalization as well as climate-friendly products and business models” should be supported, according to the application. The money from income, dividends or repayments should flow back into the fund and be used for further investments in small and medium-sized companies.
At the same time, the Greens emphasize: In principle, the fund should only buy minority shares in companies and should not remain permanently involved. If the medium-sized company is on a viable path to transformation, the state should get out again.
The Greens have already introduced their SME fund into the current budget negotiations in the Bundestag. They have proposed filling the fund with 350 million euros in 2027 and providing a further 1.2 billion euros in the following years. The Green Party budget holders presented the application in the budget committee's adjustment meeting that ran from Thursday to Friday, where, as expected, it was rejected by the Union and the SPD.
There is currently no suitable instrument in the KTF for the transformation of medium-sized businesses, says Katrin Uhlig.
Some Social Democrats in particular are open to the model. However, the coalition's austerity constraints prevented further consideration. There is probably little enthusiasm on the part of the CDU/CSU for the approach of placing such a strong focus on state investments.
For the Greens, however, the issue is not over. You want to continue to support the medium-sized business fund.
Uhlig points out that the KTF is fed from the income generated by the CO₂ price, a significant part of which goes to medium-sized businesses. But it is primarily industry that benefits from the KTF’s expenditure. That's why she and Stein advocate for the new fund.
Overall, the Greens consider the government coalition's budget plans to be anything but medium-sized business friendly. In addition to the new fund, they brought further suggestions to the adjustment meeting.
The focus is on the “Central Innovation Program for SMEs” (ZIM). It supports small and medium-sized companies in developing new products and processes and bringing them to market.
This year the program was so popular that it was in danger of running out of funds prematurely. In July, the Federal Ministry of Economics therefore imposed a freeze on applications, which is still in effect today. The resumption is not planned until the new financial year at the beginning of 2027.
Whether the resources will then be sufficient is also questionable. While 558 million euros were still available in 2026, the coalition will only provide 539 million euros next year due to the cuts. The Greens think this is a mistake: They have proposed increasing the funding for ZIM to 568 million euros.
The situation was similar with the programs “Securing skilled workers for small and medium-sized companies”, which the Greens wanted to increase from 16 to 25 million euros, and “Vocational training for medium-sized companies”, which should increase from 80 to 90 million euros. But they weren't successful, at least now.
