By Holger Hansen
BERLIN (Reuters) – German Finance Minister Olaf Scholz has agreed to provide 240 million euros (205 million pounds) in assistance to four states affected by government plans to phase out coal-powered energy, a government source told Reuters on Thursday.
Germany wants to phase out coal by 2038 and the four states that are home to the mining industry want government assistance to limit the economic impact of the transition to renewables.
A commission set up to draft a phaseout strategy said in January that the government should inject some two billion euros a year over two decades in Germany’s three mining belts.
The state of Brandenburg and Saxony where the Lausitz mining region is located will get more than 40 percent of the funds, which will be used to improve the railway and road networks in the region.
The mining regions in North Rhine-Westphalia in the west and Saxony Anhalt in the middle of the country will share the rest of the funds, the source said.
In addition to infrastructure projects, the money will be used to finance research and development centres and promote tourism. About 100 such projects will be funded by 2021.
Both Brandenburg and Saxony hold regional elections in September in which the Alternative for Germany (AfD) party is expected to double its share of the vote.
Chancellor Angela Merkel’s conservatives and their Social Democrat junior coalition partners are expected to lose voters to both the AfD and the ecologist Greens, polls show.
(Writing by Joseph Nasr; Editing by Susan Thomas)