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Schutte, speaker, plenary 3

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  • 1. ADFIAP 33 Annual Meeting, May 10 – 12, 2010, Canada Innovative Financing for a Greener Economy „Financing a Lower Carbon Economy“ ● Haje Schütte, Division Chief, Financial and Private Sector Asia
  • 2. KfW Bankengruppe in brief ● Germany’s flagship development agency, founded in 1948 ● Shareholders: 80 % Federal Republic of Germany, 20 % German federal states ● Headquarter in Frankfurt am Main, branches in Berlin, Bonn and Cologne ● Representative offices: approx. 50 offices and representations worldwide ● Balance sheet total at year-end 2009: EUR 400 bn ● Explicit and direct guarantee from the Federal Republic of Germany, expressly provided in the KfW law ● Rating: AAA/Aaa/AAA with stable outlook ● Zero risk weighting of KfW’s bonds and notes ● One of the leading frequent issuers on the international capital markets 2
  • 3. Business areas: overall business volume as of 31 December 2009 (EUR 63.9 bn) KfW Mittelstandsbank Promotion of small- and medium-sized enterprises, 37 (SME Bank) business start-ups and other commercial clients in Germany KfW Privatkundenbank Housing programmes, environmental and climate (Private Client Bank) protection, and educational finance for private clients in Germany 25 KfW Kommunalbank Financing for public clients, such as municipalities and (Municipal Bank) regional promotional banks 15 International project & 14 Customized financing for exports and project export finance & corporate financing world-wide KfW‘s public (KfW Development Bank) & private sector 7 Promotion of developing (DEG) development & transition countries cooperation activities 2 Financial Markets Treasury and funding, securitization, and other capital markets-related activities 3
  • 4. KfW's business model – proven and successful ● Unique: proven and valid business model ● Promotional activities unchanged ● Stable or increasing operating result despite global crisis Customer Customer's Capital bank market Promotional mandate State liability Defined by Institution owned by the Federal Republic and the KfW Law federal states Backed by Understanding II reached with EU Commission 4
  • 5. KfW-Funding for the protection of the environment and climate KfW funding for environment and climate 2009: Funding for environment and Commitments Total 2009 climate 2009 KfW Bankengruppe 63.9 billion EUR* 19.8 Mrd. EUR Investment Promotion in Germany and Europe 49.4 billion EUR 16.5 Mrd. EUR KfW Development Bank 3.5 billion EUR 1.6 Mrd. EUR DEG 1.0 billion EUR 0.7 Mrd. EUR KfW IPEX-Bank 8.9 billion EUR 1.1 Mrd. EUR *with securitization Of which 70% for funding to promote renewable energy and energy efficiency 5
  • 6. KfW-funding for climate Climate funding (renewable and energy efficiency) 2007 - 2009: Renewable energy Commitments year Energy efficiency KfW Bankengruppe 2007 4.4 billion EUR 6.2 billion EUR KfW Bankengruppe 2008 5.3 billion EUR 8.1 billion EUR KfW Bankengruppe 2009 6.344 billion EUR 10.630 billion EUR Investment Promotion in Germany and Europe 5.710 billion EUR 9.845 billion EUR KfW Development Bank 304 million EUR 322 million EUR DEG 62 million EUR 52 million EUR KfW IPEX-Bank 268 million EUR 391 million EUR 6
  • 7. KfW SME Bank: Funding for industrial environmental protection and climate protection General environmental Renewable Innovative Energy efficiency protection energy pilot projects KfW program for renewable energy ERP program for environmental protection and energy efficiency Environment innovation for private clients companies / SME, program for companies municipalities A general environmental protection investments, for private clients, focus on transportation as well as other energy companies / SME, Power generation efficiency investments (bigger companies, efficient municipalities wind, solar energy, geothermal energy generation) energy, water, biogas, biomass large scale projects with for SME demonstration character Heat market B energy efficiency investments bio mass, bio gas, (only on demand side) geothermal energy, big solar Complemented by grant funding for advisory services energy, including heat storage Facility and EE heat networks 7
  • 8. KfW Mittelstandsbank (SME Bank): Commitments for industrial environmental protection and climate protection Distribution of funding by KfW Mittelstandsbank: 84 Mio. € 388 Mio. € 372 Mio. € 5245 Mio. € KfW-program for renewable energy ERP program for environmental protection and energy efficiency: general investments ERP program for environmental protection and energy efficiency: energy efficiency investments Environment innovation program 8
  • 9. KfW Private Client Bank and KfW Municipal Bank: Program for energy efficient housing construction and rehabilitation Energy efficiency Energy efficient housing construction Energy efficient rehabilitation - municipalities for private clients, housing companies, for municipalities, including municipal companies municipalities purpose: energetic rehabilitation and investments purpose: new construction of KfW energy effiency for energy savings in schools, public swimming houses 70 and 55 (EnEV2007) pools, kindergardens, youth clubs Social investments – energetic building rehabilitation Energy efficient rehabilitation for non-for-profit organisations loans for private clients, housing companies, purpose: as above municipalities / grants for private clients purpose: rehabilitation into KfW energy efficiency Global loans in Eastern Europe with the Energy houses 100 and 70 (EnEV2007) / special purpose Efficiency Finance Facility of the EU investments purpose: energy efficiency in the industrial sector and building sector 9
  • 10. KfW Private Client Bank and KfW Municipal Bank: Commitments for energy efficient housing construction and rehabilitation Distribution of funding by KfW Private Client Bank and KfW Municipal Bank KfW Municipal Bank: KfW Private Client Bank: 70 Mio. € 3.094 Mio.€ 207 Mio. € 63 Mio. € 25 Mio. € 5.770 Mio.€ 226 Mio. € Global loans Europe Fresh water suppy Energy efficient rehabilitation Solid waste managent Energy savings Energy efficient housing construction Sanitation 10
  • 11. KfW Development Banks: Funding for international climate protection - examples energy efficiency energetic housing rehabilitation in Eastern Europe renewable geothermal energy in Kenya energy biodiversity and „green saving books“ in Vietnam … forest protection forest management in Peru adaptation water management in Jordan 11
  • 12. Climate Finance – New Commitments KfW Development Bank 2008 …Sectors Energy Mill. € Transport Mitigation 1120 Forests/Ag. 40% Water Adaptation 400 Others …Regions Others 2161 Asia & Oceania Sub-Sahara Africa MENA Eastern Europe Latin America 12
  • 13. KfW Carbon Fund ● Program to buy emmission reduction certificates from investments by German and European companies  efficient climate protection within the European Emission Trading System  cooperation with European development banks (EIB and other) ● Promotion of climate protection investments primarily in developing and emerging countries  renewable energy, energy efficiency  synergies with KfW loan business ● Provider of services and advisor of German government  selling of emission certificates in 2008 and 2009  CO2-compensation of business trips by German government and parliament  development of programs in developing and emerging countries  policy advise in international negotiations 13
  • 14. KfW Carbon Fund - Portfolio 31 Dec 2009 Total Purchase of CO2-Certificates: 28.1 Mio tonnes CO2e ● Countries of Origin ● Technologies 2% 7% Landfill Gas each 1% 1% 3% 5% Renewable Energy: China Wind 4% 29% Brazil Renewable Energy: 37% India Hydro Egypt Fossil Fuel Switch 11% Mexico Energy Efficiency: 20% Malaysia Others Honduras Renewable Energy: Biomass Rest 7% Coal Mine Gas Transport 20% 28% 17% Rest 14
  • 15. Climate Financing From Other Members of KfW Group DEG ● Loans and equity to private firms investing in developing and emerging economies ● Financing in 2009: new business EUR 1.0 billion ● New business in climate protection in 2009: EUR 710 million IPEX Bank ● Financing exports - total commitments in 2009: EUR 8.9 billion ● Export financing in the energy and environment sector: EUR 1.1 billion 15
  • 16. KfW Bankengruppe: Financing a Lower Carbon Economy ● Environmental protection and climate protection is a cross cutting top priority ● Provision of preferential funding within specific programmes ● Wholesale funding for broad scale investments via financial institutions ● Leveraging private sector funding ● Provision of complementary advisory services ● Close monitoring and energy audits of funded investments 16
  • 17. Contact Haje Schütte KfW Bankengruppe Division Chief Palmengartenstrasse 5–9 Private and Financial Sector Asia 60325 Frankfurt am Main Fon +49 69 7431 - 4096 Fax +49 69 7431 – 2944 haje.schuette@kfw.de Dr. Jochen Harnisch Fon: +49 69 7431-9695 Coordinator Climate Change Policy jochen.harnisch@kfw.de 17
  • 18. Back-up 18
  • 19. Credit Lines in Ukraine • Increasing demand for energy • High energy intensity: Problem - Out-dated technology in production - Low energy-efficiency of houses • Economic performance of the Ukraine heavily depends on energy prices • KfW-Credit for the local ProCredit bank Approach • ProCredit provides financing products with low interest rates for EE-purposes to households and small and medium-sized firms • KfW provides consultancy services • Increased competitiveness of firms Effects • Generation of know-how in the financial sector • More effective use of energy has positive effects on climate 19
  • 20. “Global Climate Fonds” (GKF) of BMU-ICI • Increasing demand for energy in transition and Problem developing countries world wide • Dependency on fossil fuels • High energy intensity and GHG emissions • Structured fund with risk sharing provisions Approach • Refinancing local banks to promote EE/RE for households and small and medium-sized firms • GKF provides refinancing + technical assistance • Platform for donor / investor coordination • Increased availability of EE/RE loan products • Better awareness for climate friendly solutions Effects • Generation of know-how in the financial sector • Mitigation impact of broad use of EE / RE 20
  • 21. Energy efficiency funds - innovative PPP approach for climate protection Asset Investment Portfolio Managers The Fund Investors A Shares Issue Proceeds Loans to SMEs, - Lending through private financial institutions Dividends/Redempt. households and small SICAV-SIF SICAV-SIF B Shares RE projects Issue Proceeds -Pool (Luxembourg) Funding Dividends/Redempt. for ESCOs, larger industrial Direct lending companies, - Issue Proceeds small EE/RE projects C Shares Dividends/Redempt. Custodian Auditors Bank 21
  • 22. Concentrated Solar Power (CSP) in India • Increasing demand for energy due to economic development and population growth Problem • Barriers to the exploitation of solar energy - Higher investment costs - Lack of financial resources and know-how • Installation of the first CSP plant in Asia Approach • Additional revenue via CDM certification • Transfer of knowledge from implementation of CSP technology in Spain and USA (IPEX) • Supply of clean energy for 50,000 people Effects • CO2 savings of more than 25,000 tons p.a. • First experiences with this innovative technology 22