Total volume of KfW’s Green Bond issuances passes the EUR 100 billion milestone

• Sustainable finance is firmly established in the capital market
• International demand for “Green Bonds – Made by KfW” continues unabated

Milestone for KfW Group’s Green Bonds: With its current EUR 5 billion Green Bond issue, the promotional bank has passed the mark of EUR 100 billion in total volume of green bonds. Since its Green Bond Programme was launched in 2014, KfW has become one of the world’s largest green bond issuers.

The funds from the KfW Green Bonds are specifically allocated to promotional loans and selected projects that make a measurable contribution to climate protection and sustainable development. The investor base has grown continuously and broadened considerably since 2014. Whereas European institutional investors dominated order books at the start, the group of investors is now much more internationally diversified. Today, investors regularly include pension funds, insurance companies, central banks and commercial banks as well as asset managers from around the world.

“Passing the mark of EUR 100 billion shows that sustainable finance is now mainstream in the capital market,”

said Stefan Wintels, CEO of KfW.

“Our promotional programmes and the persistently high demand in the capital market highlight the fact that both borrowers and investors continue to invest specifically in climate action and environmental protection. As a promotional bank, we are thus supporting the transition to a climate-neutral economy both on the supply and demand side. We will systematically continue on this path.”

Growing volumes and currency diversification of KfW’s Green Bonds

After an initial annual total volume of EUR 2.7 billion, a record annual high of EUR 16.2 billion was reached in 2021. Up to EUR 15 billion in Green Bonds is to be issued this year. KfW has been active in the market for green bonds in Australian dollars, Swedish kronor, Chinese renminbi and euros since the start of the year. The transactions have a total equivalent value of approximately EUR 6 billion.

KfW is one of the few issuers emitters in the world to issue green bonds in the most diverse currencies. Besides the euro as anchor currency, it has issued green bonds in 13 other currencies so far with the aim of attracting as broad an international investor base as possible.

Framework for green bonds is being continuously expanded

Since the start of its Green Bond issuances, KfW has developed its corresponding framework on an ongoing basis. Whereas the programme initially focused exclusively on renewable energies, the addition of energy-efficient buildings in 2019 was a key milestone. This broader basis for sustainable financing enabled KfW to bring its first green EUR 3 billion transaction to the market – the largest green bond issue in this market segment at the time.

In two further updates, the framework was expanded through the addition of financings in the categories of “clean transportation”, “corporate investments for climate change mitigation” and “biodiversity”. In order to accommodate the desire of investors for geographical diversification, selected international financings, both in the context of German Financial Cooperation as well as of project and export finance, were also incorporated.

Green Bond Principles: Transparency, standardisation and reporting create trust

In its pioneering role for green bonds, KfW has actively contributed to the development of the internationally recognised Green Bond Principles of the International Capital Market Association (ICMA). On that basis KfW developed its own framework, which is systematically aligned with the Green Bond Principles. Thus, in addition to providing its investors with an independent second party opinion (SPO) on the framework itself, KfW also provides a regular allocation report on the use of proceeds and a report on the environmental and social impact, referred to as an impact report. Furthermore, Deloitte verifies the proper allocation of KfW’s green bond proceeds and issues a limited assurance opinion.

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