KfW makes record commitment of EUR 9.7 billion: significant rise in support for developing countries and emerging economies
Press Release from 2018-07-18 / Group, DEG, KfW Development Bank
- KfW Development Bank: almost 40% of all new commitments go to Africa and the Middle East
- More than EUR 3.0 billion committed for projects relating to refugees
- EUR 4.7 billion for global urban development
- EUR 1.6 billion for business investments by DEG
- 1.5 million employees in businesses financed by DEG
In 2017, KfW further increased its commitments for financing and promotion in the field of development cooperation on behalf of the German Federal Government to EUR 9.7 billion (2016: EUR 8.8 billion). Of this total, KfW Development Bank commited EUR 8.2 billion, and DEG EUR 1.6 billion. The activities of KfW Development Bank and DEG span 531 projects in developing countries and emerging economies. Sub-Saharan Africa, North Africa and the Middle East accounted for EUR 3.7 billion (2016: EUR 3.0 billion) of total funding.
"KfW has once again set a new record in its support for developing countries and emerging economies. This growth is due to a significant extent to funding in Africa and the Middle East and reflects the increasingly important role that our commitment is having in these regions in contributing to peace and addressing the root causes of migration," said Dr Joachim Nagel, member of KfW Group's Executive Board.
KfW Development Bank again increased its commitments further, setting a new record high. Last year, around EUR 8.2 billion in financing was provided to developing countries and emerging economies (2016: EUR 7.3 billion). Around 55% of financing was earmarked for climate change mitigation and environmental protection projects. Almost 40% of all new commitments go to development projects in Africa and the Middle East; 65% of the Federal Government's budget funds are channelled to this region.
Internationally, KfW Development Bank currently oversees 117 ongoing projects directly related to refugees in 28 different countries with an overall volume of more than EUR 3 billion. A total of EUR 1.2 billion of new commitments were allocated for projects in this area in 2017. The regional focus of involvement in this field is also the Middle East. These funds will reach around 11 million refugees and people living in the host communities.
KfW also makes a significant contribution to sustainable urban development around the world with EUR 4.7 billion and 58% of new commitments, for example with financing for the metro in Lima, the water supply in Timbuktu and flood protection in Tegucigalpa, the capital of Honduras.
Alongside budget funds, which stem primarily from the Federal Ministry for Economic Cooperation and Development (BMZ), KfW Development Bank committed own funds amounting to EUR 4.9 billion (60%). In this way, it helps the German Federal Government to meet its international objectives and obligations in the fields of poverty alleviation, climate change mitigation, environmental protection and – increasingly - supporting crisis regions.
DEG, a subsidiary of KfW, also had a successful financial year in 2017. It pledged about EUR 1.6 billion to finance investments by private companies in developing countries and emerging economies, and thus maintained the previous year's record high (2016: EUR 1.6 billion). At EUR 830 million, financing for small and medium-sized enterprises in developing countries was once again a focus in 2017. Financing for German companies increased significantly by 70% to EUR 436 million (2016: EUR 253 million).
The 2017 financial year was also encouraging in terms of developmental impact. DEG's existing customers employ around 1.5 million people and generate annual local income of EUR 67 billion in developing countries, of which EUR 14 billion are comprised of wages and salaries. In regional terms, DEG's commitments in Asia developed particularly well at EUR 601 million, recording an increase of around 18 per cent over the previous year. Asia was followed by Latin America with EUR 502 million. By sector, the financial sector and infrastructure projects topped the list.
"In 2018, we want to intensify our efforts to promote innovative business ideas, for example in the area of fin-techs. We see digitalisation as an important trend and driver, also in our partner countries. We also aim to promote ideas by female entrepreneurs in developing countries and contribute to greater participation of women in business," said Christiane Laibach, Chairwoman of the DEG Management Board.