Nearly five million customers, including those in rural areas, will soon have super-fast internet access thanks to EU funding. The European Investment Bank (EIB) announced on Friday that it will provide a loan of 350 million euros to North Rhine-Westphalian telecommunications company Deutsche Glasfaser.
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It aims to expand its network in Germany and reduce gaps. The financial injection is aimed at providing broadband internet to around 460,000 homes and businesses in rural areas where high-capacity networks do not yet exist.
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The connection must provide a bandwidth of up to 10 Gbit/s, i.e. speeds that most consumers in this country and the EU can only dream about. The average download speed in most European countries is currently 100 Mbps or less.
The money comes from the InvestEU funding pot, which the Community set up as a support programme during the corona pandemic. It consists of long-term financing by mobilising private and public resources to support the EU’s political priorities.
“This investment will help bridge the digital divide and enable businesses to expand and create jobs.” EU Economic Commissioner Paolo Gentiloni was confident. “This is a concrete example of Europe investing in the future and leaving no one behind.”
EIB Vice-President Nicola Beer emphasised that better digital services in rural areas make life easier there and the regions themselves more attractive. “In addition, they secure jobs and help people and companies to fully exploit their potential.”
Additional Billions Secured
Areas served by fiber optics will be future-proofed and “equipped for the growing data appetite of modern Internet applications – from cloud computing to telecommunications to distance learning – and for new technologies such as virtual reality and the Internet of Things.”
In addition to the EIB loan, Deutsche Glasfaser has secured billions in financing from commercial banks from 2022. The group has just announced Additional debt financing of 1.25 billion euros For network expansion in rural and suburban areas.
Positive signaling effect for other donors
The company’s shareholders, Swedish investment group EQT and Canadian pension fund OMERS, intend to complement this financing with equity commitments. The group currently has installed two million connections and aims to install more than three million connections by the end of 2026. According to the EIB, the new loan should now also have a “positive signaling effect for future lenders”.
In contrast to other European countries, fiber optic expansion in Germany has been “quite slow so far”, notes the EIB. In 2023, coverage was only 35 percent, while in the EU and Great Britain it was 64 percent on average.
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The project contributes to Germany’s digital strategy and the EU’s “Digital Compass”. As a result, all households should be able to book a gigabit-capable connection by 2030. Deutsche Glasfasser is mainly active in rural areas and describes itself as the leading provider of fibre optic connections to the building (FTTB) in the region.
The group supports cooperation with other network operators on the basis of open access, but complains about increasing duplication by Deutsche Telekom.
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