Joint Press Release:

• Demand doubled despite coronavirus crisis
• About EUR 14.5 billion in KfW promotional business since the beginning of 2020

Good news for climate change mitigation and the labour market: despite the ongoing COVID-19 pandemic, the German Federal Government’s promotional programmes for renewable energy and energy efficiency in the building sector continue to see high demand in the second quarter of 2020. The positive trend from January to March has continued.

Federal Minister Peter Altmaier: “These are excellent developments in difficult times! With our programmes, we are promoting the energy transition in the building sector. And we are helping small and medium-sized enterprises and the many local skilled trades businesses, thus securing income and jobs. Climate change mitigation and supporting the economy go hand in hand in these programmes.”

One reason for the sharp rise in promotional figures is the significant programme improvements made at the beginning of the year, which involved implementation of the resolutions of the Climate Cabinet by the German Federal Government. The more attractive promotional terms and conditions continue to pay off, as a look at the programmes for energy-efficient construction and refurbishment (EBS programmes) shows. They are being implemented by KfW Group on behalf of the German Federal Government. In the first half of 2020, loans and grants totalling EUR 14.5 billion were committed under the EBS programmes. This enabled investments to be financed in more than 215,000 residential units and in commercial and municipal buildings. These investments prevent CO2 emissions of over 400,000 tonnes and secure more than 400,000 jobs. The total investment volume in the first half of 2020 amounted to around EUR 38.5 billion.

Dr Ingrid Hengster, Member of KfW’s Executive Board: “Following the decisions of the Climate Cabinet and the improvements in our Energy-efficient Construction and Refurbishment programme, demand for KfW promotional loans and grants is booming. Even the coronavirus pandemic was unable to stop this trend. Overall, more than twice as much was invested in energy-efficient buildings and other energy-efficiency measures in Germany in the first six months of the year as in the same period of the previous year. In the case of private construction, this increase is even more than 180 per cent. This represents an additional 55,000 energy-efficient residential units with a commitment volume of around EUR 6.5 billion. All this shows that promotional instruments are very well suited to initiating forward-looking investments and thus stimulating both climate change mitigation and the labour market in Germany.”

Sustained high demand is also reflected in the modified market incentive programme for heat from renewable energy sources, which is being implemented by the Federal Office for Economic Affairs and Export Control (BAFA) under the name “Heating with Renewable Energy”. Here, around 110,000 applications for funding for heating systems that use renewable energy were received in the first half of 2020. In about half of the cases, applications were also submitted for the newly introduced replacement premium for oil heating systems.

Torsten Safarik, President of BAFA, commented: “An increase of over 190 per cent compared to the same period last year in the Heating with Renewable Energy programme, even despite the coronavirus crisis! This great demand is good news for the climate, the people in the country and the German economy. As BAFA, we contribute to this through fast, simple and unbureaucratic procedures.”

In total, more than 210,000 applications for funding were submitted in the first half of 2020 under the above-mentioned promotional programmes, including commercial and municipal buildings – an increase of around 165 per cent compared with the same period the previous year. The wave of investment in the building sector triggered by the modified programmes is thus still continuing.