Germany will finance a subsidy package worth €10 billion ($10.9 billion) for a planned Intel Corp. chip facility in Magdeburg via its special climate and transformation fund, according to people familiar with the plans.
(Bloomberg) — Germany will finance a subsidy package worth €10 billion ($10.9 billion) for a planned Intel Corp. chip facility in Magdeburg via its special climate and transformation fund, according to people familiar with the plans.
Chancellor Olaf Scholz’s ruling coalition established the €178-billion fund in July last year to pay for Germany’s transformation to a more sustainable economy and for climate protection measures. Financed partly by income from emissions trading and carbon pricing, money from the fund was also allocated to ease the burden on consumers and companies from high energy prices.
Spokespeople for the Economy Ministry in Berlin did not immediately respond to a request for comment.
Intel plans to invest about €30 billion in the semiconductor site in the former communist east, which Scholz said Monday represents the single largest foreign direct investment in German history.
The US company initially agreed to build the facility at a cost of about €17 billion with just short of €7 billion in government aid but postponed the start of construction due to economic headwinds.
The enlarged subsidy package will include both traditional support in the form of financial subsidies as well as price caps on energy, people familiar with the deal have said.
Speaking at an industry lobby conference in Berlin on Tuesday, Economy Minister Robert Habeck argued that the government is getting more value for money with the revised agreement.
“People can of course tell me not to spend any money but when we spend less for more investment it seems to have been pretty well negotiated,” he said.
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