Press Release from 2016-04-21 / Group, Sustainability, DEG, KfW Development Bank

KfW records high volume of commitments in development cooperation again

KfW provides EUR 4.3 billion for climate and environmental protection (60%)
Approximately EUR 1 billion in support for crisis regions in North Africa/Middle East
EUR 654 million in direct aid for refugees in 2015
DEG commits EUR 1.1 billion for private investment in developing and emerging countries

In 2015 KfW disbursed the second highest sum of funding and grants to developing and emerging countries after the record year in 2014. For projects and programmes in Africa, Asia, Latin America and South-East Europe a total of around EUR 7.8 billion was pledged in 2015 on behalf of the German federal government (previous year: EUR 8.8 billion; 2013: EUR 6,7 billion; 2012: EUR 6,2 billion). Of this amount, EUR 4.3 billion went into climate and environmental protection (previous year: EUR 5.4 billion), primarily into funding renewable energies and climate change adaptation measures.

The funding provided by KfW for developing and emerging countries comprised projects in various sectors. Different funding instruments are used, tailored for the given partner so that the projects and programmes can exert the maximum effect. The initiatives range from overcoming causes of flight and alleviating the suffering in refugee camps, through grants to protect tropical forests in Latin America to a promotional loan for a climate-friendly metro system in India. Furthermore, DEG offers funding for private companies, for example to open up a dry construction training centre in Iraq or to work with smallholders in East Africa, thereby giving them the chance to earn income.

"Promoting global climate and environmental protection, the growing number of trouble spots and the resultant waves of refugees worldwide coupled with the rising importance of cities remain the greatest challenges of the years ahead. The huge range of our projects offers access to energy for broad swathes of the rural and urban populations in developing and emerging countries. Additionally, the stabilisation measures reach many people in the crisis-hit countries and in neighbouring states", revealed Dr Norbert Kloppenburg, Member of the Executive Board of KfW Group.

Thanks to its projects and programmes, KfW helps 2.5 million people gain access to energy for the first time. Some 3.4 million children and young people are reached as part of the education projects, while the water, waste water and waste disposal projects ensure a marked improvement in the living conditions for 10.8 million people.

KfW Development Bank:

In 2015 KfW made 307 new pledges of funding amounting to EUR 6.7 billion. Alongside budget funds stemming primarily from the Federal Ministry for Economic Cooperation and Development (BMZ), KfW made use of own capital amounting to EUR 4.3 billion (64%, previous year: 73%). In this way, KfW supports the German federal government in fulfilling its international objectives and obligations with regard to fighting poverty, helping refugees (EUR 645 million in new commitments; ongoing measures totalling EUR 1.6 billion) as well as climate and environmental protection.

Some 60% of the funding, or roughly EUR 4 billion, was dedicated to the last of these areas, with EUR 2.5 billion going to global climate protection and EUR 1.2 billion to financing climate change adaptation measures.

DEG:

KfW subsidiary DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH committed around EUR 1.1 billion in 2015 to fund private investments in developing and emerging countries. This facilitated business investments amounting to EUR 5.7 billion. Funding for small and medium-sized enterprises was a priority. Around 60% of the new commitments in 2015 were destined for this important target group. For investments in Africa and other promising markets DEG pledged EUR 566 million. "There are a great number of developing countries with huge potential. DEG is purposefully involved here to promote entrepreneurial initiative and create prospects for the people", emphasised Bruno Wenn, Chairman of DEG Management Board. In addition to funding from its own capital, DEG co-finances pilot projects and feasibility studies via promotional programmes as well as advising companies.

A total of 115 German enterprises were funded by DEG last year to the tune of EUR 164 million for developmental projects in emerging and developing countries.

An assessment of the DEG portfolio shows that the companies co-financed by DEG employ approximately one million people. They contribute to national revenue by means of annual tax payments amounting to roughly EUR 1.5 billion. They also improve the energy supply by producing 8 terawatt hours (TWh) of electricity each year from renewable energies for about 9 million people.