Merkel’s administration announced an exit from coal power in February, saying it will wean the nation off the fossil fuel over two decades. The government pledged to compensate utilities and cushion the blow in lignite and hard-coal centers in Eastern Germany and on the Rhine River. As many as 60,000 jobs are linked to coal mining and power generation.

The government is “keeping it’s promise” to switch the regions’ fossil-fuel linked jobs into clean energy, Economy Minister Peter Altmaier said in a statement in Berlin Wednesday. The aid package — which needs parliamentary approval — will help Germany achieve its climate goals for 2030 and put it on the right path for meeting 2050 targets, he said.

Regional governors in the coal regions have demanded front-loading of financial aid, meaning they want to see money paid out quickly to turn fossil-fuel assets into new enterprises and jobs. The potential political fall-out of not doing so may be costly.

The cabinet’s decision on structural aid coincides with the European Parliament election. The populist Alternative for Germany party has strong support in eastern states and the party opposes plant closures and questions climate change.

The coal exit is also being managed by a second bill that will spell out the pace of plant closures and potential compensation for utilities like RWE AG, STEAG GmbH and Uniper SE. The government expects to finalize a draft by the fall.

(By Brian Parkin and Birgit Jennen)