Bavarian Transformation Fund: 350 million euros for innovation and change

With its new Bavarian Transformation Fund, the Free State of Bavaria has sent a strong signal of change to the economy: Industrial change will now be actively supported with new financial resources in line with the transformation and sustainability strategy – technologically, ecologically and structurally. Companies in Bavaria will thus receive financial incentives to invest in digitalisation, climate neutrality and the development of technological innovations. The fund is providing a total of 350 million euros for the transformation of the Bavarian economy. 100 million euros of this is earmarked for the automotive industry, which is facing particular challenges in its transformation. Many of the funding modules are based on the established BayTP+ funding programme, which specifically targets technology-driven projects.

New boost for Bavaria's industry

The demands on companies in Bavaria are constantly growing: in order to remain competitive, investments in decarbonisation, digitalisation and the development of new technologies are essential. Added to this are changing market conditions, regulatory requirements and pressure to develop sustainable business models.

Against this backdrop, the Bavarian Transformation Fund was launched – a multi-million-euro funding instrument that will be in place from now until the end of 2028. With the launch of this programme, the Bavarian Ministry of Economic Affairs is providing new financial impetus for companies in the state. The aim of the state funding is to support Bavarian companies in times of change in making their processes, products and structures fit for the future.

The funds from the new fund can be combined with LfA investments and co-financing from the federal government or the EU, if applicable, thus becoming a flexible instrument for companies undergoing change.

Three core areas of funding

The 350 million euros comes from the capital stock of the former Bavarian Transformation and Research Foundation and will be allocated to three core areas. This funding is available to companies in the Bavarian industry across all sectors:

• R&D projects for the development of new or significantly improved products, production processes and knowledge-based services (within the framework of BayTP+)
• Process and organisational innovations aimed at increasing efficiency, agility or sustainability (new to the fund)
• Recycling innovations such as chemical or biochemical plants for recycling plastics (new to the fund)

Technology funding from BayTP+ as a basis

The transformation fund is structurally based on the proven Bavarian Technology Funding Programme Plus (BayTP+). This programme offers a platform for technology-driven individual projects and supports the development and application of new technologies. With the launch of the fund, the existing programme will be expanded and more closely aligned with the challenges of industrial transformation.

BayTP+ is now being supplemented in terms of content by, among other things, the funding of process and organisational innovations, such as the digitalisation of internal processes, and the funding of recycling technologies that contribute to the circular economy and climate protection.

Further information on BayTP+ can be found in our previously published blog article on BayTP+.

Bavarian Transformation Fund vs. Transformation Fund Bavaria

The Bavarian Transformation Fund (350 million euros) provides support in the form of non-repayable grants and (not to be confused with) the Transformation Fund Bavaria of the LfA (200 million euros) with equity capital.

The Bavarian Transformation Fund particularly promotes technology- and environment-oriented projects, such as those aimed at decarbonisation, resource efficiency or digitalisation. Depending on the size and location of the company, grants of between 10% and 30% of eligible costs can be awarded, and in individual cases even more – for example, if there is a particular environmental benefit or high energy efficiency. The minimum investment volume is generally 200,000 euros.

Equity capital or mezzanine financing forms (e.g. silent partnerships, profit participation rights, subordinated loans) are not part of this fund – supplementary instruments such as the Transformation Fund Bavaria of the LfA are available for this purpose. The integration of mezzanine capital in LfA investments ensures the leverage effect of private investments.

Further programmes: Transformation@Bayern

The special programme ‘Transformation@Bayern’ (T@B) complements existing funding instruments by providing targeted support to SMEs in their digital and innovative transformation, particularly in structurally weaker regions of Bavaria. It offers investment grants for projects that go beyond the general BRF or GRW criteria and address specific aspects of transformation.

Your next steps: EurA supports you with your application

The new transformation fund offers great opportunities, but also presents companies with formal and substantive challenges when applying. As an experienced funding consultancy with over 25 years of expertise, EurA supports you throughout the entire process, from application preparation to project support and accounting.

We work with you to analyse your company's innovation and transformation potential and develop a tailor-made funding strategy. This ensures that your project meets the requirements of the funding guidelines and that you can take full advantage of the potential offered by government support. The new funding pot may open up new opportunities for innovation projects. If you are seeking funding from the fund, existing outlines can be reviewed and, if necessary, reworked. Please feel free to contact us.

Take advantage of our comprehensive consulting services for funding in Germany. Arrange a non-binding consultation with our funding experts now and have your project reviewed for eligibility.

Text: Birgit Miriam Hering