German Municipalities Report Growing Investment Backlog
A KfW Research survey indicates that the perceived investment backlog in German municipalities increased by 15.9% to EUR 215.7 billion in 2025. School buildings and transport infrastructure are most affected.
Municipalities across Germany are facing a continually worsening investment backlog, according to the annual KfW Municipal Panel survey. In 2025, the perceived backlog reached a record EUR 215.7 billion, marking a significant 15.9% increase from the previous year. This figure represents the total sum municipalities would need to invest to bring their infrastructure up to adequate quality and quantity standards.
The survey, conducted by the German Institute of Urban Affairs (Difu) on behalf of KfW Research, found that school buildings face the largest backlog, requiring an estimated EUR 67.8 billion, or 31% of the total. Roads and transport infrastructure follow, with a backlog of EUR 53.4 billion (25%). KfW Chief Economist Dirk Schumacher noted that the heightened need for school building investments may be linked to the upcoming legal entitlement to all-day primary schools in 2026.
Significant investment backlogs were more frequently reported by larger municipalities. The survey also revealed regional disparities, with certain southern German municipalities reporting fewer issues compared to those in states like North Rhine-Westphalia. Furthermore, 19% of municipalities reported minimal or no capacity for infrastructure upkeep, a figure that rose to 32% concerning road maintenance.
While municipalities plan to invest EUR 48 billion in 2025, actual spending has historically fallen short, with an estimated EUR 30 billion spent in 2024. Schumacher highlighted non-monetary factors such as staffing shortages in planning authorities, complex documentation, and protracted approval processes as key obstacles to investment execution.