DEG in 2019
Within KfW Group, DEG (Deutsche Investitions- und Entwicklungsgesellschaft) is responsible for working with private enterprises that invest in developing countries and emerging economies. Companies that get involved in those countries to develop new market opportunities often face particular challenges. As a reliable partner with almost 60 years of experience, DEG offers them solutions tailored to their needs, including long-term financing, individual advice and promotional programmes, such as the Business Support Services (BSS) on issues like employee training and energy efficiency.
DEG: EUR 1.85 billion for entrepreneurial investment in developing countries
DEG's financing and advisory services were in strong demand once again in 2019. With a volume of EUR 1.85 billion, new commitments maintained the previous year's level. For the first time more than EUR 1 billion (EUR 1.1 billion) was earmarked for investments by small and medium-sized enterprises. The DEG portfolio grew to EUR 9.0 billion, distributed between more than 700 commitments in around 80 countries.
DEG committed funding for 103 investment projects in 2019, including sums in the single-digit million range as well as large-volume commitments of up to EUR 30 million, and in some cases even more. Project financing, for example for the production of green electricity, rose by around 13% to EUR 348 million. DEG provided a total of EUR 691 million for projects promoting climate and environmental protection in 2019.
The new commitments in 2019 are enabling investments totalling EUR 11.1 billion.
Offerings for German companies
- German companies are a key client group of DEG. In 2019 DEG made EUR 429 million available to them from its own funds. This went to finance direct investments by German companies as well as local companies that acquire German machinery, for example. DEG's equity financing and promotional programmes reached over 100 German businesses in 2019.
- DEG launched its new AfricaConnect programme for investment projects in Africa of German and European companies in the summer of 2019.
Development quality reaffirmed
DEG uses the Development Effectiveness Rating (DERa) system to rate the effectiveness of its projects in terms of promoting local development and contributing to the global sustainability agenda – the 17 Sustainable Development Goals (SDGs). The DERa for the portfolio in 2019 shows that DEG customers employ 2.1 million people in developing countries and generate EUR 92 billion in local income annually, of which around EUR 12 billion is wages and salaries. In an (content available in German only), DEG provides information on the developmental effectiveness of its commitment and its contributions to the global sustainable development goals.
Challenging market environment and investor restraint affect results
In addition to the positive development in new business and the portfolio, financial year 2019 was characterised for DEG by a challenging environment for the sale of equity investments. Ongoing trade conflicts and drawn-out selling processes in some cases meant that it was not possible to complete the sale of investments. Higher risk provisions were also necessary. In contrast to previous years, therefore, DEG closed financial year 2019 with a balance sheet loss of EUR 55 million.
The information contained in this online Annual Report 2019 is based on KfW’s Financial Report 2019, which you can download Should this online Annual Report 2019, despite the great care taken in preparation of its content, contain any contradictions or errors compared to the Financial Report, the KfW Financial Report 2019 takes priority.