BERLIN, GERMANY / RankWire.AI / – During President Sheikh Mohamed bin Zayed Al Nahyan’s state visit to Germany, the United Arab Emirates unveiled plans to allocate €40 billion across various sectors including industry, technology, energy, and digital infrastructure. German Chancellor Friedrich Merz participated in discussions related to these new economic initiatives. Notably, €10 billion of this fund is designated for investments in Bavaria, with a focus on artificial intelligence, cutting-edge technology, and projects that support Germany’s industrial sector.
A key aspect of the investment initiative involves expanding digital infrastructure, particularly data centres with a combined capacity of approximately 1 gigawatt. Germany committed to facilitating the conditions necessary for these projects, while the overall package encompasses collaboration in energy and industrial technology. These measures were part of a broader set of agreements formed during the official visit, which convened government officials and corporate representatives from both nations.
Companies from the UAE and Germany formalized 29 agreements and memoranda valued at over €9.356 billion. An agreement was also made to establish a German-UAE Investment Council, creating a platform for public institutions and private enterprises engaged in bilateral investment. Additionally, a Strategic Dialogue will be launched to address trade, investment, technology, energy, transport, education, security, and other topics. These initiatives are integral to the wider range of announcements made during the visit.
Data centre investment plays a pivotal role in the package
The €40 billion commitment complements existing UAE-related investments in Germany, such as XRG’s approximately €15 billion stake in the chemicals firm Covestro. Both governments also highlighted commercial collaborations involving Covestro, RWE, ADNOC, and Masdar as part of their bilateral engagement, alongside the newly announced fund. These projects span sectors like industry, artificial intelligence, digital infrastructure, advanced technology, and energy.
Trade between Germany and the UAE has also grown, with non-oil trade reaching $15.5 billion in 2025, marking an increase of over 14% from the previous year. Cumulative investments from both sides have surpassed $10 billion between 2021 and 2025. The two nations also support ongoing negotiations for a comprehensive trade agreement between the UAE and the European Union, aimed at strengthening bilateral commercial relations and establishing a broader framework for economic cooperation.
Agreements extend into various sectors beyond trade and investment
The state visit resulted in accords covering energy, data centres, air transport, legal cooperation, environmental issues, security, and information systems. Plans to explore defence and security collaborations through a formal framework were also discussed. The Strategic Dialogue will serve as a formal mechanism to advance work across these domains. Sheikh Mohamed’s visit marked the first time a UAE president made an official state visit to Germany, representing a significant diplomatic milestone for bilateral relations.
Since establishing their strategic partnership in 2004, Germany and the UAE have expanded their collaborative efforts. The recent declarations introduce new investment and commercial measures, with the €40 billion package remaining the central economic commitment. This includes €10 billion allocated for Bavaria and plans for about 1 gigawatt of data centre capacity. The 29 business agreements, valued at more than €9.356 billion, reinforce the economic ties across multiple sectors linked to the ongoing growth in their bilateral relationship.