Resumption and expansion of grant funding for energy-efficient urban rehabilitation for municipalities

• The KfW funding programme is now being relaunched under improved terms
• EUR 75 million in promotion for 2025
• Impetus given to energy-efficient refurbishment in over 1,800 neighbourhoods
• Municipalities receive up to 90% grants for integrated strategies and accompanying renovation management

As of today, municipalities will receive grants for planning and implementing energy-efficient measures in neighbourhoods. The German Federal Ministry for Housing, Urban Development and Building and KfW are resuming the promotion of climate action and adaptation measures for municipalities, thereby providing further impetus for greater energy efficiency in urban and rural areas. A total of EUR 75 million are available for this in 2025. In all, 1,800 neighbourhoods have received funding so far, leading to extensive, coordinated local investments in the decarbonisation of the building stock, the expansion and modernisation of the energy supply, and the utilisation of renewable energy sources. With the restart of funding, municipalities now have the opportunity to swiftly and effectively translate municipal heating planning into concrete actions.

Melanie Kehr, Executive Board Member of KfW, said:

“With the funding, we are assisting municipalities in two ways. On the one hand, the grant supports the planning of energy-efficient neighbourhoods. At the same time, we are making it possible to employ qualified personnel to implement the solutions quickly. In doing so, we are contributing to the acceleration of the municipal heating transition while simultaneously stimulating growth for the local economy. This is a first but important step towards creating future-proof urban districts that work well on an environmental, social and economic level."

The resumption also brings about improvements: The subsidy rate for financially weak municipalities will be increased to 90% of eligible costs. The funding period for the accompanying renovation management will also be extended to up to five years and the maximum amount increased to EUR 400,000.

It will be possible to apply for this promotional programme “Energy-efficient Urban Rehabilitation - Grant” at KfW again from 26 November 2025.

Further information:

Information on the KfW programme can be found at: Energetische Stadtsanierung - Zuschuss (432) (in German).