David Rusnok. Sao Paulo, April 15, 2010

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1 David Rusnok Sao Paulo, April 15, 2010

2 Overview 1. KfW The German Promotional Bank General Concept 2. KfW Green Financing Programs in Germany 2.1 Overview 2.2 Example: Building Energy Efficiency Programs 2.3 Environmental Effects 3. KfW Energy Efficiency Programs in Developing Countries 2

3 KfW Bankengruppe Name: KfW Bankengruppe (KfW banking group) Founding: 1948 by a special Law on KfW Shareholders: Federal Republic (80%) & Federal States (20%) Seat: Frankfurt am Main Representative offices: in 62 countries, in Brasil: Sao Paulo and Brasilia Balance sheet total: EUR 400 billion (2009) Commitments: EUR 64 billion (2009) Rating: AAA / Aaa Employees:

4 Funding and On-lending System National and International Capital Markets Bank Risk Enduser Risk Funding Bank Enduser Refinancing KfW Loan Government Funds for Special Credit Programms 4

5 A bank with a wide array of functions Domestic promotional business Promotion of SMEs, entrepreneurs, environmental and climate protection business start-ups Promotion of housing, education, infrastructure and social development Financing of municipal infrastructure projects and promotion in Europe International project and export finance Promotion of developing and transition countries 5 5

6 KfW Green Financing Programs in Germany Example: Building Energy Efficiency Programs

7 Building Energy Efficiency Programs in Germany New buildings Building stock Energy Efficient Construction Energy-efficient rehabilitation 7

8 Heating Energy Savings Capacity roof insulation ca. 10 % solar heaters ca. 5 % external wall insulation ca. 30 % thermal insulation window ca. 10 % insulation of the basements ceiling ca. 5 % modern heating installation ca. 10 % 8

9 Energy Efficient Construction Promotional goal: Eligible measures: Construction of KfW Efficiency Houses Construction or initial purchase of KfW Efficiency Houses Conditions: Loan amount - Loan term - Fixed-interest period - Interest rate - Not more than EUR 50,000 per housing unit - Up to 30 years - 10 years - Subsidized rate, depending on Efficiency standard 9

10 Potential for Building Rehabilitation in Germany Appr. 31 mio. apartments constructed prior to 1984 (approx. 80% of all existing apartments) Approx. 90 % of heating energy is used in buildings constructed before 1984 So far 5 million apartments rehabilitated 10

11 Energy Efficient Building Rehabilitation Program Promotional goal: Eligible measures: Saving of Energy and Reduction of CO 2 emissions Measures that contribute to achieve KfW Efficiency standards including design and supervision Conditions: - Loan amount - Loan term - Fixed-interest period - Interest rate - Up to EUR 75,000 per unit - Up to 30 years - 10 years - Subsidizied rate 11

12 Housing Programs Target: Climate Protection and increased Employment Programs started in 2001 Sponsored by the Federal Government Jahr Budget (Mio. EUR) Loan commitments (Billion EUR) Housing Units Billion Billion ,7 Billion

13 Financing Volume and Employment Impact Jahr Financed Investments More than 11,8 Billion More than 10,7 Billion More than 13 Billion Employment effects* * Jobs ensured for at least 1 year (preliminary estimateted for 2008)

14 Climate and Economic Impact Sustained reduction in CO2 emissions through measures financed from 2006 to 2008: approx. 2,4 Mio. t p.a.** Sustained energy savings through measures in 2006 and 2007 of 2,5 billion kwh p.a., i.e. savings in heating costs in 2008 of approx. 188 Mio. *** 14 **preliminary estimate ***preliminary calculation, basis: prices of 2007

15 KfW Energy Efficiency Programs in Developing Countries

16 Why do we promote Energy Efficiency in Developing Countries? In DC EE often least cost option contributing to Mitigate risks of climate change Increase securtity of supply (energy mix, resource availability) Reduce import dependency and reduce price volatility Increase productivity and competitiveness Promote technology development and local production of climate firendly technology Create employment and income and thereby reduce poverty Transfer of KfW s expertise & commercial success in domestic EE programs to DC 16 16

17 Which kind of EE projects do we support in the area of financial cooperation? Supply Side EE Energy Efficiency in thermal power stations for heat and electricity Rehabilitation and modernization of Transmission systems Energy Efficiency in Power and Heat Distribution systems Demand Side EE EE in Industry/ SME (i.e. motors/drives/ventilators, compressed air, heat recovery) EE in Buildings (i.e. heating systems, windows, insulation) EE in Households (i.e. appliances, lighting) Accompanying support for Sector Reform Programs like tariff reforms, design standards for new plants and district heating 17 17

18 Success Factors Not all markets applicable for Financial Sector EE Programs Choose (sub-) sectors with energy tariffs at least close to market level Offer standardized loan products Incorporate local EE know-how (energy auditors, ESCOs, vendors, suppliers) Train staff at Financial Institutions and support final -borrowers (i.e. by cofinancing of energy audits) Support accompanying marketing & awareness rising campaigns 19 19

19 Obrigado! For further information: David Rusnok Senior Project Manager KfW Carbon Fund Rua Verbo Divino 1.488, 3. andar Sao Paulo Brasil Tel: