Germany: EIB boosts high-speed internet with €350m InvestEU-backed loan

• The EIB loan to fibre broadband provider Deutsche Glasfaser will enable up to 460,000 rural German households to access fibre optic internet.
• The project builds on the company’s existing network and will bring high-speed connections to underserved areas.
• The loan is backed by the European Union’s InvestEU programme and addresses lack of investment in digital infrastructure in less populated areas.

The European Investment Bank (EIB) is lending fibre broadband provider Deutsche Glasfaser (DG) €350 million to expand its network in Germany. The project will make high-speed internet available to some 460,000 homes and businesses in rural areas that lack high-capacity broadband.

The network will provide retail internet services that are as much as 10 gigabits per second (Gbps) – faster than the broadband speed to which most consumers currently have access. The average download speed in most European countries is in the range of 100 megabits per second (Mbps) or below. Fibre optic infrastructure can support much higher bandwidth than traditional copper-based broadband technologies like DSL, VDSL or cable.

This project benefits from risk sharing under the InvestEU programme of the European Union. It aims to address a lack of investment in high-speed digital infrastructure in less populated areas, where the costs and risks are typically higher for providers.

“Improving digital services in rural areas will enhance living conditions and make these regions more attractive,” said EIB Vice-President Nicola Beer.  “At the same time, it will safeguard jobs and support both individuals and businesses in reaching their full potential. It makes these regions ‘future-proof’ by accommodating the growing bandwidth demands of modern internet applications – from cloud computing to remote work and education – and emerging technologies like virtual reality and the Internet of Things. Bridging the digital divide between rural areas and urban centres is essential to help rural regions compete more effectively, driving both economic growth and social progress.”

The EIB loan comes on top of €5.8 billion in financing from commercial banks that DG secured in 2022, enabling the company to expand a network that currently spans more than 2 million homes that have the potential to be connected. By the end of 2026, DG aims to make available fibre connections to over 3 million households in Germany, with a longer-term ambition to reach up to 6 million households in the country. The EIB loan has a positive signalling effect for further fundraising.

“We are pleased that the EIB is supporting us on our journey to bridge the digital divide in rural parts of Germany,” said DG Chief Executive Officer Andreas Pfisterer, “As the leading fibre player in rural and sub-urban Germany, we are clearly focused on bringing consumers and businesses in these areas to a state-of-the-art fibre network. Our integrated model of retail and wholesale via our open access platform is a key differentiator in the market and is an attractive offer for both the municipality and the citizens,”.

Only about 35% of households reached full-fibre connectivity in 2023 as opposed to an average 64% across the EU plus the UK. This project will support the targets of the German Digital Strategy and the European Digital Compass to provide all households with gigabit connectivity by 2030.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality. The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Deutsche Glasfaser Group is the leading fibre broadband provider in rural and sub-urban Germany. As a FTTH pioneer and industry leader, Deutsche Glasfaser plans, builds and operates open-access fiber networks for private households, businesses and public institutions. The company aims to roll-out fiber networks across the nation, thereby contributing significantly to Germany’s digital transformation. With innovative planning and construction methods, Deutsche Glasfaser is the technology leader for fast and cost-efficient FTTH deployment. Deutsche Glasfaser is backed by the experienced digital infrastructure investors EQT and OMERS.