Federal investment guarantees protect investments by German companies against political risks in developing, emerging and former transition countries. In this way, investment guarantees help safeguard projects undertaken in a difficult environment. Where projects abroad are in jeopardy, the Federal Government can intervene at the diplomatic level to protect these project. This also benefits small and medium-sized enterprises.

Coverage can be provided for the following types of investments:

  • Equity investment

  • Capital provided to branch offices or permanent establishments (endowment capital)

  • Equity-like loans from a shareholder or a bank

  • Other asset-related rights, e.g. from service contracts in the commodities sector or from certificates of indebtedness)


A guarantee offers protection from the following risks:

  • Nationalisation, expropriation or equivalent measures

  • War, armed conflict, revolution and unrest or terrorist acts relating to such events

  • Breach of legally binding commitments by state or state-controlled bodies

  • Payment moratoriums or restrictions on conversion or transfers

Strong increase in guarantees issued for small and medium-sized enterprises and first-time applicants

In 2022, the Federation provided investment guarantees for projects worth €2.3 billion (2021: €2.6 billion). Despite a small decrease in the volume of new coverage, the number of applications approved was considerably higher at 43 than in the preceding year (2021: 30). In 2022, 47% of the applications approved were filed by small and medium-sized enterprises – the highest share since 1995. This shows that effective coverage against political risks has become much more important for companies and especially small and medium-sized enterprises that venture onto new foreign markets. Moreover, 52% of the guarantee holders took out an investment guarantee for the first time. This is considerably higher than even the large share of first-time guarantee holders in 2021 (40%).

The high level of interest in hedging against political risk also manifests itself in a large increase in applications for guarantees. It has become apparent that German companies are continuing to invest considerable sums in developing countries and emerging economies and that these investment decisions are often contingent on the availability of investment guarantees protecting them against the political risks that are being felt across the globe.


Prerequisites for an investment guarantee to be issued

Investment guarantees can only be issued for projects deemed worthy of support. The project must have a positive impact on Germany and on the development of the country where the investment is made. Furthermore, the investment must not pose problems in terms of its environmental, social and human rights impact. German companies are explicitly called upon to comply with the OECD Guidelines for Multinational Enterprises and to live up to their human-rights related due-diligence responsibilities as set out in the German National Action Plan on the Implementation of the UN Guiding Principles and Business and Human Rights.

For the federation to be able to issue an investment guarantee, the investment must also be subject to sufficient legal protection in the country where it is made. This is normally deemed to be the case if there is an investment promotion and protection treaty in place between Germany and the relevant country. Applications are approved or rejected by an Interministerial Committee chaired by the Federal Ministry for Economic Affairs and Climate Action and involving business experts from the private sector.

Investment guarantees can only be issued for new investments. This means that the application for an investment guarantee must be made before the investment is made.