KfW Group and BayernLabo conclude new global loan agreement to promote energy-efficient and affordable housing in Bavaria

• Low-interest loans for publicly funded construction of energy-efficient rental housing
• Contribution to the energy transition and the attainment of climate change mitigation targets

KfW Group and BayernLabo, the promotional and municipal bank of the Free State of Bavaria, are expanding their cooperation which aims to improve the energy efficiency of residential buildings: a global loan agreement for EUR 50 million was signed on 14 October 2019 to promote the construction of new publicly subsidised energy-efficient rental housing on the basis of the KfW “Energy-efficient Construction” programme funded by the German Federal Government.

BayernLabo is also granting additional discounts on the funds provided by KfW, which will be used to promote social housing in Bavaria. Investment projects designed to achieve the KfW Efficiency House standards 40 Plus, 40 and 55 in the KfW “Energy-efficient Construction” programme will be promoted.

“Meeting climate change mitigation targets in the building sector depends to a large extent on how quickly we are able to move towards the goal of climate-neutral housing. At the same time, we need more affordable housing. These two goals may not contradict each another. Climate change mitigation will only be widely accepted by society if it is possible to create additional social housing that meets highwith good energy efficiency standards. Combining the strengths of KfW and BayernLabo is a successful model in this area,” says Dr Ingrid Hengster, Member of KfW Group's Executive Board.

Promoting the energy-efficient refurbishment of residential buildings and non-residential buildings in the municipal and social infrastructure is the focus of the long-standing global loan cooperation between KfW and BayernLabo, which was supplemented by support for the construction of new, energy-efficient municipal non-residential buildings. The cooperation is now being further expanded by the joint efforts to promote the construction of new energy-efficient residential buildings. Once again, federal and state subsidies are combined in a meaningful way to the advantage of the final borrowers.