KfW Group and L-Bank promoting innovations in Baden-Württemberg together for the first time

• Global loan agreement for EUR 200 million signed
• One-year pilot project for implementing the ERP Innovation Programme on state level
• Exemplary bundling of federal and state funding

KfW Group and L-Bank, the promotional bank of the state of Baden-Württemberg, have signed on 15 September 2015 a EUR 200 million global loan based on KfW’s ERP Innovation Programme. L-Bank will use the refinancing funds from the ERP Innovation Programme to provide low-interest loans to small and medium-sized enterprises (SMEs) in Baden-Württemberg and thus promote the realisation of their new ideas. Baden-Württemberg boasts a number of companies in which research and development is a particular strength. The collaboration between KfW as the federal promotional bank and L-Bank is a blueprint and lighthouse project for the targeted regional promotion of innovations in SMEs, based on the ERP Innovation Programme.

The new L-Bank "Innovation financing Baden-Württemberg" programme, which is refinanced by the KfW global loan, enables SMEs to invest in the future. It provides highly favourable financing solutions to fund the market-oriented research and development of new products, production processes or services. The programme offers loans of up to EUR 5 million with a term of up to ten years.

"Innovation financing Baden-Württemberg" is also an example for bringing together federal and state funding: in addition to interest rates reduced through the ERP Special Fund, the loans are also subsidised by the state of Baden-Württemberg and L-Bank.

"The most innovative companies in Baden-Württemberg are often smaller and medium-sized enterprises. Through the cooperation with our on-lending partner banks, we are in close contact with these companies. The new programme provides us with an additional way in which to support their investment in pioneering developments in the best way possible. We see great potential for demand here," said Dr Axel Nawrath, Chairman of the Executive Board at L-Bank.

Dr Ingrid Hengster, Member of KfW Group's Executive Board and responsible for domestic promotional business in Germany said: "Innovations are fundamental to sustainable growth. One of KfW's primary functions is therefore to create a positive financing environment for innovators. Tthe close cooperation between KfW and the promotional institutions of the federal states is an important prerequisite for this."

By concluding the loan agreement, KfW and L-Bank are continuing their long-term cooperation with regard to refinancing state-specific funding programmes. A total of 34 agreements with an overall volume of almost EUR 30 billion have been concluded since 1999.