In a press release dated 10/09/2025, the state of Brandenburg (Link)   has been informed that local authorities in the state can take out loans at reduced rates from the Investment Bank of the State of Brandenburg (ILB) as part of a municipal investment programme (KIP 2025-2029). All interest costs above one per cent are to be borne by the state from the state budget. The municipalities can use these loans to fulfil their mandatory tasks and for important investments in services of general interest.

With regard to the utilisation of the (soon to be launched) KIP, no competition or public procurement law issues arise for local authorities. This is because the taking out of loans and credits by contracting authorities is excluded from the scope of application of competition and public procurement law. The utilisation of a loan by a local authority does not constitute a public contract. A loan does not serve to procure services or goods, but is a financing measure.

The budgetary principles of efficiency and economy nevertheless require local authorities to take out loans on the best possible terms. To this end, it is regularly necessary to obtain at least three offers. At the same time, municipal budget law offers flexible justification approaches for proceeding differently in individual cases. However, it remains to be seen how the state will ensure under budgetary law that local authorities in a budgetary crisis can also participate in the KIP.