Danish energy and construction sector expecting billions

Oscar Lundberg

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500 billion euros. That’s the amount Germans will invest in defense, infrastructure, and green transition. The money will be used over the next 12 years for infrastructure such as roads, bridges, schools, and digitalization. And that’s good news for Danish companies.

“It’s difficult to overestimate how much this course change can mean for Germany and thus also for Denmark. Germany is our most important trading partner, so it has enormous significance for us,” says Søren Kristensen, chief economist at Sydbank.

Good for the Construction Industry

Danish contractors are already in the German market and are suppliers for large infrastructure projects. And the industry can expect even more orders to come in the near future.

The expansion of the German defense will also create opportunities for the construction sector. New weapons factories and barracks will need to be built.

“The Germans will need to expand weapons factories, and that can provide orders for companies in the construction industry. That’s also what we’re seeing now in Denmark, where many barracks need to be built,” says Allan Sørensen.

A Potential Downside

The increasing demand for building materials, however, could affect construction companies that are not participating in the building boom.

“Conversely, material prices in construction may also rise, and that can hit some of the Danish construction companies that don’t have much to do with Germany,” explains Allan Sørensen.

Good for Danish Energy Technology

Part of these billions is earmarked for new climate initiatives, which is perfectly suited for Danish energy companies.

“This is where we are really strong in Denmark. It plays right into the large Danish production of energy technology, whether it’s wind turbines, pumps, thermostats, and so on, which can profit from it,” says Allan Sørensen.

German Energy Hunger

In addition, there is the almost insatiable need for energy, in the form of electricity and hydrogen, demanded by German heavy industry.

“There are high hopes in Germany that we can get hydrogen via land-based pipes from Denmark. But it requires decisions, and it requires investments,” emphasizes Josche Muth, Ørsted’s Head of Regulatory & Public Affairs in Germany.
CEO of the Danish-German Chamber of Commerce Andreas Wenzel agrees:

“We are trying to decarbonize our heavy industry. We are looking for a competitive, sustainable, and secure supply of energy. Denmark is one of our most important partners in this,” says Andreas Wenzel to Energiwatch.

This article first appeared in iRadar.dk, our sister publication in Denmark.