Bank aus Verantwortung
The financing of energy efficient
refurbishment: KfW‘s offer for
municipalities.
FORUM ANNUEL DU CFDD
Accélérer la rénovation énergétique des bâtiments
Brussels, 16.03.2017
Dr. Dominik Bach
1. KfW at a glance.
1948 – Financing reconstruction
Photo sources: See footnotes at the back
Promotional mandate defined by KfW Law
›3
More than 65 years of KfW
Financing with a public mission
› Promotional bank of the Federal Republic of Germany
› Established in 1948 as Kreditanstalt für Wiederaufbau
› Shareholders: 80% Federal Republic,
20% federal states
› Headquarters: Frankfurt am Main
Branches: Berlin, Bonn and Cologne
› Representative offices: 80 offices and representations
worldwide
› Balance sheet total 2015: EUR 503 billion
› Financing volume 2016: EUR 81.0 billion
› 5,966 employees (2015) 1
› Best long-term rating: AAA/Aaa/AAA
1) The average number of employees including temporary staff but without
members of the Executive Board and trainees
›4
Today – Improving economic, social, and ecological living conditions
Focus on three mega-trends
Globalization and
technical change
Demographic change
>EUR 150 milliondomestic lending volume per day
Climate and environmental
protection
›5
6
A bank with a wide array of functions
We promote
development
Promotion of
developing countries and
emerging economies
International business
We promote Germany
Promotion of housing construction
and refurbishment, improved
accessibility and education
Financing of municipal infrastructure
and global loans
Promotion of SMEs,
business founders,
start-ups, energy efficiency,
innovation
Domestic promotion
We support
internationalisation
International
export and project finance
Promotion of environmental and climate protection
Mittelstandsbank Kommunal- und
Privatkundenbank/Kreditinstitute
KfW IPEX-Bank KfW Development Bank,
DEG
2. KfW offer for municipalities and
municipal companies.
›7Annual Due Diligence Meeting on March 20, 2014
Germany consists of approximately:
› 300 (rural) districts,
› 100 urban districts,
› more than 11,000 municipalities
8
Administrative divisions of GermanyKfW promotes the municipal level
9
Loan Application ProcessHow to profit from KfW‘s promotional programs
Municipalities
Municipally-owned
enterprises, non-profit
organizations
Direct Application
No collaterals
Loan agreement and disbursement
Application via
customer‘s bank
Loan agreement
and
disbursement
Transfer of
approved
application to KfW
Refinancing loan
Customer‘s Bank
Passes credit through
Collaterals
Overlooking the Big PictureFocussing on quarters/neighbourhoods for urban energy refurbishment processes
Basis: Energy concept of the German Government (2010)
Targets of a KfW program: „initiate broad und locally adjusted investments in energy efficiency and
renewable energies (…)“
Neighborhood approach for energetic urban renovation is explicitly emphasized and corroborated in
the governmental „action program climate protection 2020“
(Federal Ministry for the Environment and Building, 2014)
Refurbishment of
Buildings
Energy Supply Systems
Renewable Energies
Urban Planning and
Construction
Real Estate Industry
Demographic Change
Integrated approach for promotion of energy efficiency in buildings KfW-Promotional programmes
›11
New building Existing building
Energy Efficient
Refurbishment- loans
- grants for investment
- grants for planning and
technical assistance/
supervision
Energy Efficient
Construction
Buildings (residential/ public/ commercial): promotion of energy efficiency measures
Investments
Residential building Non-residential building
New building Existing building
Energy efficient Construction and Refurbishment
(public buildings)
KfW- Energy Efficiency Programme (commercial
buildings)
KfW- Financing Initiative to support energy transition
Buildings: use of renewable energy
InvestmentsKfW-programs for renewable energy; EE construction/refurbishment
BAFA (market stimulation)
Concept Development: financial support / grants
Management: financial support / grants for implementation & co-ordination manager
Urban districts: concept development and implementation of energy efficiency measures
Investments: soft loans for the improvement of energy efficiency in energy supply
KfW‘s public sector programmes
Programs for the public sector / municipalities and municipal companies
Energy Efficient Urban Redevelopment
Integrated Neighbourhood Concepts and Implementation Management (Grant)
2016: EUR 10.2 m promotional volume
Efficient Supply in Urban Districts
Enhancement of supply systems‘ energy efficiency (heat, cold, water, sewage) (loans)
2016: 143.4 m
Energy Efficient Construction and Refurbishment
energy efficient construction and refurbishment of non-residential buildings in municipalities (loans)
2016: EUR 591.3 m
3. KfW offer for municipal buildings
specifically.
13
KfW-Promotional programs for energy efficiency in buildingsOverview
loans
Municipalities /
Municipal companies
Non-residential Buildings
Corporates,
Self-employed
Residential Buildings
Energy -efficient
Construction &
Refurbishment
loans / grants
„Everyone principle“
KfW-Efficiency House and
Single Measures
customers
Program
available for
Energy -efficient
Construction &
Refurbishment
KfW-Efficiency House and
Single MeasuresKfW-Efficiency House and
Single Measures
14
15
Energy-Efficient Construction and RefurbishmentProgram facts
Main Targets
› Reduction of overall carbon
dioxide pollution and energy
expenditures for non-
residential buildings through
energy efficient renovation
and through energy-efficient
new buildings
Beneficiaries
› Municipalities, municipally
owned companies, non-profit
organizations
Designated Use
Investments in energy-efficient new buildings or in energy-efficient
refurbishments of non-residential buildings in municipalities (e.g.
schools, town halls, administrative buildings)
› single measures (e.g. thermal insulation of exterior walls, roof,
basement ceiling, modernization of heating system) or
› Full refurbishment according to legal energetic standards for a
comparable new building
› Combination of loan and - in case of full refurbishment – grant
(according to achieved energetic level)
16
Non-residential buildings – public sector clientsEnergy-efficient Construction and refurbishment for non-residential buildings (construction introduced in 10/2015)
KfW-Efficiency House 70
KfW-Efficiency House 70
KfW-Efficiency House 55
Promotional Level based
on the Energy Efficiency
Ordinance
KfW-Efficiency House 100
KfW-Efficiency House
Monument
Single Measures
--
17,5 %max. 175 EUR/sqm
5%
max. 50 EUR/sqm
7,5%max. 100 EUR/sqm
10 %max. 100 EUR/sqm
5%max. 50EUR/sqm
--
17,5 %max. 175 EUR/sqm
5%
max. 50 EUR/sqm
7,5%max. 100 EUR/sqm
10 %max. 100 EUR/sqm
Interest RatePartial Debt
Relief
Risk-adjusted
interest rate
from 1% p.a.
effective*+
Promotional Loan
Risk-adjusted
interest rate
from 1% p.a.
effective
*
+
*as per
08.03.2017
Co
nstr
ucti
on
Re
furb
ish
me
nt
Promotional
volume
2016:
EUR 458m
Volume 2016:
EUR 133m
Risk-adjusted interest rate
From 1% p.a. effective
• Only small differences compared to promotional offer for corporate sector non-residential buildings:
• Municipalities: direct loans from KfW (no on-lending) from 0.05% p.a. effective interest rate (without ceiling)
• Public companies/non-profit companies: on-lending, conditions based on risk-adjusted interest rate
• Collateral in line with usual banking requirements
• Maturities 10/20/30 years; amortisation-free period 1-3 years
Up to
EUR 25m
per
investment
rest
Up to
EUR 25m
per
investment
interest
16
The higher the level of
energy efficiency
achieved, the higher
the level of promotion
Defining a KfW Energy Efficiency House› 1. reduction of complexity to two factors as a basis for standardisation
Transmission heat loss HT´energy loss of the building through its
components (building envelope)Annual Primary energy
demand QP
(required energy demand for
heating, ventilation and hot
water; considering the
energy source, heat
generation, storage,
distribution etc.)
17
Defining a KfW Energy Efficiency House
› 2. Standard setting + creating a brand (here for residential buildings)
18
Energy
efficiency Transmission
heat loss (HT´)
70 %55 %
Annual primary
energy demand (QP)
(in % of the reference building of EnEV 2007)
KfW-EH 55
KfW-EH 70
KfW-EH 100
85 %70 %
100 %85 %
115 %100 %
KfW-EH 85
130 %115 %KfW-EH 115
Heritage 175 %160 %
The photo shows an example for advertising a new construction, the EH standards refer to refurbishments, except EH 55, which is at the same
time today the minimum standard for new buildings, the others being EH 40 and EH 40plus.
Photo Credits/References
Title slide: full-page image / KfW / Stephan Sperl
Slide 2: KfW-Bankengruppe / Historisches Konzernarchiv
Slide 3, KfW-Bankengruppe / Historisches Konzernarchiv
Slide 4, left: KfW-Bildarchiv / Thomas Klewar
Slide 4, middle: KfW-Bildarchiv / Thomas Klewar
Slide 4, right: KfW-Bildarchiv / photothek.net
Slide 13, KfW Photo Archive / Thomas Klewar
Slide 16, left: KfW picture library / Thomas Klewar
Slide 16, right: KfW picture library / Thomas Klewar
Slide 19, http://www.blohm-bau.de/images/news/aktionshaus-fam-130-pop-up.jpg
›19
Bank aus Verantwortung
Dr. Dominik Bach
KfW Bankengruppe
Liaison Office to the EU
Square de Meeûs 37
1000 Brussels, Belgium
Thank you for your attention!
Bank aus Verantwortung
Back-up slides
Energy Efficient Urban Redevelopment
Target: Holistic solutions for energy-efficient urban areas
Public funding: Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety
Beneficiaries: Municipalities, municipal companies, non-profit organizations
Grant Program (Pr. 432)
› Promoting integrated neighborhood strategies and implementation management
Promotional Loan Program (Pr. 201/202)
› Promoting efficient supply in urban areas via investments in heat/cold, water supply/wastewater disposal
infrastructure
Promotional loans and grants
2015 2016
Number Volume (mio. EUR) Number Volume (mio. EUR)
Pr. 201 - Loan
(municipalities)39 30.4 36 33.1
Pr. 202 - Loan
(municipal
companies, non-
profit organizations)
22 48.2 29 110.4
Pr. 432 - Grant
(municipalities)153 9.9 169 10.2
Energy Efficient Urban Redevelopment (Grant)Program facts
Beneficiaries
› Municipalities (directly)
regardless of their size, urban
and rural quarters alike
› Other urban protagonists,
particularly municipally-
owned companies, housing
companies, private building
owners (indirectly via the
municipality)
Application Entitlement
› Municipalities only
Designated Use
Pre-investment measures for
energetic urban renovation:
› A. Concept development:
max. 65 % of the costs (no
ceiling); promotional period: 1
year
› B. Refurbishment
Management:
max. 65 % of the cost of
personnel; max. 150.000
EUR over 3 years (extendible
to 5 years upon application)
Efficient Supply in Urban DistrictsProgram facts
Main Targets
› Incentivize district-based
investments in heat and
water supply infrastructure
and take advantage of
potential for efficiency
enhancement
Beneficiaries
› Municipalities, municipally
owned companies, non-profit
organizations
Designated Use
Sustainable enhancement of
energy efficiency with regard to
municipal supply systems in
urban quarters
› Heat and cold supply (highly
efficient combined heat and
power generators based on
natural gas or biogas, heat
accumulators and heat grids)
› Water supply (substitution of
older engines and pumps)
› Wastewater disposal (e.g.
drain water heat recovery
systems)
Energy Efficient Building Construction and Refurbishment
KfW Efficiency House 70
KfW Efficiency House 100
KfW Efficiency House Heritage
Protection
Single Measures
17,5 %max. 175 EUR/sqm
10,0 %
max. 100 EUR/sqm
7,5 %
max. 75 EUR/sqm
5,0 %
max. 50 EUR/sqm
Efficiency Investment
Loan
Partial debt relief Energy Costs
Same
subsidized
interest rate
applies for all
promotion
levels
+
-Co
nstr
uction 5,0 %
max. 50 EUR/sqm
KfW Efficiency House 70
KfW Efficiency House 55
Re
furb
ish
men
t
Same
subsidized
interest rate
for all
promotion
levels
+
Programs for the public sector / municipalities and municipal companies