Germany is set to receive a major investment boost from the United Arab Emirates after Abu Dhabi announced plans to invest €40 billion in the country.

The announcement followed talks between UAE President Sheikh Mohamed bin Zayed Al Nahyan and German Chancellor Friedrich Merz in Berlin. The investment is intended to strengthen Germany’s industrial competitiveness and support long-term economic growth.

A significant part of the package will target digital infrastructure, including the development of new data centres with a combined capacity of around one gigawatt. The two countries also agreed to deepen cooperation in energy, trade, defence and security.

The visit also resulted in 29 agreements worth more than €9.4 billion between UAE and German companies. Additional corporate investments are expected as bilateral economic cooperation expands.

Germany and the UAE are seeking stronger partnerships at a time of geopolitical uncertainty and energy-market pressure. Berlin is also working to diversify its economic and energy relationships and reduce excessive dependence on individual major partners.

Separately, Germany and India are also looking to strengthen their strategic relationship. Chancellor Merz and Prime Minister Narendra Modi discussed security cooperation and expressed support for quickly concluding the EU-India Free Trade Agreement.

The new UAE investment commitment could therefore become an important element of Germany’s efforts to attract capital, expand digital infrastructure and strengthen its industrial base.