KfW's programmes for energy-efficient construction and refurbishment have positive impacts on the climate and public coffers

• They reduce pressure on public budgets by up to EUR 10.6 billion, according to the Jülich Research Centre
• It estimates that each euro of funding relieves public finances by up to EUR 5.40
• Programmes combine cyclical impetus with energy conservation and climate action

KfW’s promotional programmes for energy-efficient construction and refurbishment increase net revenues of the federal, state and local governments as well as social security funds by up to EUR 10.6 billion. This is the finding of a study conducted by the Jülich Research Centre on behalf of KfW. Every euro invested acts as a multiplier and reduces the burden on public coffers by a net EUR 3.80 to EUR 5.40. KfW’s promotional programmes ease pressure on public budgets by leading to increases in public revenues or reductions in public expenditure that exceed the costs of the programmes.

“KfW’s promotional programmes work on two levels. Not only do the investments they promote save energy, they also provide positive impetus for the local economy. The state always benefits as well through lower transfer payments and higher revenues from taxes and levies”, said Dr Jörg Zeuner, Chief Economist of KfW Group.

KfW’s programmes for energy-efficient construction and refurbishment, which it conducts on behalf of the Federal Ministry of Economics and Energy, enable the long-term financing of investments in the modernisation and construction of energy-efficient residential, commercial and municipal buildings at low interest rates. More than 400,000 private residential units alone were financed in 2016. The programmes contribute to achieving the energy-policy objectives of the German Federal Government. The government intends to make the existing building stock almost climate-neutral by 2050. It made funds totalling EUR 1.95 billion available to KfW for interest rate reductions and grants for the 2016 funding year. During the period under review, investments totalling EUR 45 billion were promoted under the programmes. The study attributes around EUR 21 billion of this sum to measures aimed at compliance with higher efficiency standards and recognises them as induced investments.

Information on the study by the Jülich Research Centre on behalf of KfW:

The aim of the study was to analyse the impacts of KfW’s programmes for energy-efficient construction and refurbishment on public budgets for the 2016 funding year. The analysis covered the programmes “Energy-efficient Construction (153)”, “Energy-efficient Refurbishment (151, 152, 430)”, “IKK - Energy-efficient Construction and Refurbishment (217/218)”, “IKU - Energy-efficient Construction and Refurbishment (220/219)” and “KfW Energy-efficient Construction and Refurbishment” for commercial buildings (276, 277, 278).

The study on the impact on public budgets can be found at www.kfw.de/evaluationen (available only in German).

The contributions of the programmes to climate action are presented in the regularly published monitoring reports: www.kfw.de/evaluationen (available only in German).