KfW's European commitment

DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, a subsidiary of KfW Group, is providing its long-standing customer, the Co-operative Bank of Kenya (“Co-op Bank”), with a long-term loan of USD 25 million. Co-op Bank will use these funds to set up a credit line intended exclusively for micro, small and medium-sized enterprises (MSMEs) that are managed or owned by women.

This financing is the first to be made by DEG in which a guarantee from the European Fund for Sustainable Development Plus (EFSD+) is used to secure part of the loan. EFSD+ was established as part of the EU’s Global Gateway Initiative to boost cooperation with the private sector and to enable projects particularly relevant in terms of development policy. The credit line will help to close existing gaps in funding for MSMEs on the local credit market in Kenya.DEG: First financial commitment with EU guarantee | DEG (deginvest.de)

DEG press release of 30 April 2024

At the JEFIC High Level Meetings on 18 June 2024, Christiane Laibach (Member of Executive Board of KfW) and Gert Jan Koopman (Director General at DG NEAR) signed the EFDS+ guarantee agreement ‘Supporting a market-oriented Green Transformation in the Western Balkans and European Neighbourhood East regions.’ The EU’s EFDS+ guarantee used to safeguard default risks of development and promotional loans amounting to EUR 260 million. The secured loans enable investments in renewable energy and network infrastructure in target regions. After an initial starting phase of three years, the EFDS+ guarantees will secure loans with a duration of 15 years until 2042.

• The EFDS+ guarantee agreement includes an additional component for technical support to the amount of EUR 13 million.
• The investment programme is one of six programmes of the KfW Development Bank (currently in cooperation with DEG) with a guarantee volume of up to EUR 1.1 billion in total, which was approved by the EU in 2022.
• The loan borrowing strengthens the commercialisation of national energy suppliers while promoting their market maturity.

Currently only 38% of a total 2.5 billion tonnes of waste is recycled and reintegrated into economic value chains. Through the 'circular economy' concept, products and processes are being redeveloped so that resources can be used many times over and hence the amount of waste is being reduced. The advantages of transitioning from a linear business model towards a circular economy include not only environmental benefits, but also a reduced resource dependency and the creation of jobs through innovations and the development of materials, products and processes. To support this transformation, the circular economy is an important pillar of the European Green Deal.

To implement circular economy, the six main public promotional banks of the European Union (BKG Poland, CDC France, including BpiFrance, CDP Italy, ICO Spain, KfW Germany as well as the EIB) decided to launch the Joint Initiative on Circular Economy (JICE). JICE shall provide long-term financing for projects which accelerate the transformation towards circular economy. The participating JICE partners aimed to provide at least ten billion Euros of investments in circular economy projects by the end of 2023. The goal has now been exceeded and projects worth €11.6 billion have been funded across a wide range of sectors, including agriculture, industry and services, mobility, urban development, waste and water management. Projects span all stages of the value chain and the life cycle of products and services, from design to value recovery.

Characterised by JICE’s success to date, the members have decided to prolong the initiative by another two years and have determined a higher goal for circular economy projects of 16 billion Euros by the end of 2025. At the same time JICE has gained another member: Invest-NL (Netherlands) is now part of the initiative.

The Joint Initiative on Circular Economy (JICE) reaches EUR 8.9 billion and continues its efforts

North Macedonia’s efforts to decarbonise the energy sector received another boost with the signing of a grant agreement on 18 March 2024 to increase the capacity of Bogdanci Wind Park.

The grant for EUR 9.2 million from the EU’s Western Balkans Investment Framework was signed between the state-owned ‘Power Plants of North Macedonia’ (AD ESM) and KfW Development Bank to develop the second phase of this already-successful wind park.

Phase 2 will increase the capacity of the wind park by up to 15 MW, which is expected to produce around 50 GWh of electricity annually, equivalent to the energy demand of around 6,000 households. In total, over 22,000 households will be supplied with more reliable and sustainable electricity.

"With the process of decarbonisation, it is of great importance to increase investments in renewable sources in order to increase energy security and mitigate the negative impacts on the climate," stated Pablo Obrador, Director of the Energy Division for Western Balkans and Turkiye at KfW Development Bank.

The Bogdanci Wind Park has shown outstanding results in its ten years of operation.

Through the production of over 1000 GWh of electricity, it exceeded the production plan foreseen in the project and in 2021 it produced 1.95% of the country’s total electricity generation. The completion of this second phase will contribute to the creation of new jobs, development of the local community and improvement of the energy infrastructure.

“The huge sustainable energy potential of North Macedonia, especially through wind and solar energy, is an enormous opportunity for the country, which is important in the advancement of the Green Agenda”, emphasized Holger Schröder from the European Commission’s Directorate for Neighbourhood Policy (DG NEAR). He added, “The modernisation and climate transformation of the energy sector – with the support of Team Europe – is a key part of the EU accession process. The EU will continue to be a strong partner in providing assistance for the implementation of renewable energy projects with the goals of promoting economic growth, environmental protection and ultimately bringing the Republic of North Macedonia closer to the European Union."

“As part of our joint global commitment, the development of renewable energy is a key priority of Germany's engagement in the Republic of North Macedonia. The Bogdanci wind park contributes to the greening of the energy sector. And what's more important: it also makes it more sustainable," said Petra Drexler, Ambassador of the Federal Republic of Germany.

This investment is a continuation of the EU’s support for North Macedonia’s energy transition.

The projects have been identified as Flagship investments under the Economic and Investment Plan for the Western Balkans

The VC fund of funds “Wachstumsfonds Deutschland” (Growth Fund Germany) has reached its EUR 1 billion target volume. A key building block of the Future Fund of the German Federal Government has thus been completed. The Wachstumsfonds Deutschland one of the largest VC funds of funds ever to be set up in Europe. It is funded primarily by private resources. Besides the Federal Government and KfW Capital as anchor investors, the fund has more than 20 major institutional investors including insurers, superannuation funds, foundations, asset managers and large family offices such as Allianz, BlackRock, Debeka, Generali Deutschland AG, Gothaer Versicherung, HUK-Coburg, the RAG-Stiftung, SIGNAL IDUNA, Stuttgarter Lebensversicherung a.G., Tecta, and Württembergische Lebensversicherung AG.

Together with other investors, the Wachstumsfonds invests in German and international VC funds with a focus on Europe and Germany. This will significantly improve access to urgently needed growth capital for start-ups and innovative technology firms while strengthening Europe and Germany as an innovation location. KfW Capital acts as both an investment intermediary and an investment advisor for the Wachstumsfonds Deutschland. The fund will be managed by the fund service platform Universal Investment Group.

What is special about the structure of the Wachstumsfonds Deutschland is that it is composed of two parallel investment vehicles, consider the different risk preferences of the individual groups of investors. The German Insurance Association (GDV) and its members played an important role in accompanying the structuring of the Wachstumsfonds.

https://www.kfw.de/About-KfW/Newsroom/Latest-News/Pressemitteilungen-Details_787712.html

A zero-carbon future is on the horizon for regional trains between Berlin and the surrounding Brandenburg area. The railway company Niederbarnimer Eisenbahn (NEB) plans to replace diesel locomotives with the first battery-powered trains from December 2024. It has ordered 31 new Mireo Plus B trains from Siemens for the ten East Brandenburg lines between Berlin and the Polish border.These trains will use the overhead contact lines on electrified sections of the route to charge the batteries and power the trains on non-electrified sections. They are therefore extremely energy efficient and do not generate air pollution, especially compared to the diesel trains currently in use. As soon as the railway’s electricity comes entirely from renewable sources, the trains will run on zero emissions.The European Investment Bank (EIB) is financing the project with an investment loan of up to EUR 95 million for the development and purchase of the trains. The European Commission is supporting the project with funds from the Connecting Europe Facility (CEF) for Transport and the NER programme.

This railway project is one of the first operations to fully meet both the climate and sustainability goals of the EU promotional bank. The EIB funds will be pooled together with around EUR 70 million from KfW IPEX-Bank and up to EUR 34 million from NordLB into a special purpose vehicle under the umbrella of Alpha Trains.

KfW IPEX-Bank press release of 4 January 2022