Schutte, speaker, plenary 3

ADFIAP 33 Annual Meeting, May 10 – 12, 2010, CanadaInnovative Financing for a Greener Economy

„Financing a Lower Carbon Economy“● Haje Schütte, Division Chief, Financial and Private Sector Asia

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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

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Business areas: overall business volumeas of 31 December 2009 (EUR 63.9 bn)

KfW Mittelstandsbank (SME Bank)

Promotion of small- and medium-sized enterprises, business start-ups and other commercial clients in Germany

KfW Privatkundenbank(Private Client Bank)

Housing programmes, environmental and climate protection, and educational finance for private clients in Germany

KfW Kommunalbank(Municipal Bank)

Financing for public clients, such as municipalities and regional promotional banks

International project & export finance Customized financing for exports and project

& corporate financing world-wide

Promotion of developing & transition countries

KfW‘s public (KfW Development Bank) & private sector (DEG) development cooperation activities

Financial Markets Treasury and funding, securitization, and other capital markets-related activities

37

25

15

14

7

2

444

KfW's business model – proven and successful

● Unique: proven and valid business model● Promotional activities unchanged● Stable or increasing operating result despite global crisis

Promotional mandate

Defined byKfW Law

Backed by Understanding II reached with EU Commission

State liability

Customer Customer'sbank

Capitalmarket

Institution owned by the Federal Republic and the

federal states

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KfW-Funding for the protection of the environment and climate

KfW funding for environment and climate 2009:

*with securitization

Of which 70% for funding to promote renewable energy and energy efficiency

Commitments Total 2009Funding for environment and 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

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KfW-funding for climate

Climate funding (renewable and energy efficiency) 2007 - 2009:

Commitments year Renewable energy Energy efficiency

KfW Bankengruppe 2007 4.4 billion EUR 6.2 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

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KfW SME Bank: Funding for industrial environmental protectionand climate protection

Innovativepilot projects

General environmental protection Energy efficiency Renewable

energy

KfW program for renewable energy

for private clientscompanies / SME,municipalities

Power generationwind, solar energy, geothermal energy, water, biogas, biomass

Heat market bio mass, bio gas, geothermal energy, big solarenergy, including heat storage Facility and EE heat networks

Environment innovationprogram

for private clients, companies / SME,municipalities

large scale projects withdemonstration character

ERP program for environmental protection and energy efficiency

for companiesA general environmental protection investments, focus on transportation as well as other energy efficiency investments (bigger companies, efficient energy generation)

for SMEB energy efficiency investments (only on demand side) Complemented by grant funding for advisory services

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KfW Mittelstandsbank (SME Bank): Commitments for industrial environmental protectionand climate protection

84 Mio. €

5245 Mio. €

388 Mio. €

372 Mio. €

KfW-program for renewable energyERP program for environmental protection and energy efficiency: general investmentsERP program for environmental protection and energy efficiency: energy efficiency investmentsEnvironment innovation program

Distribution of funding by KfW Mittelstandsbank:

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Energy efficient housing construction

for private clients, housing companies, municipalities

purpose: new construction of KfW energy effiency houses 70 and 55 (EnEV2007)

Energy efficient rehabilitation

loans for private clients, housing companies, municipalities / grants for private clients

purpose: rehabilitation into KfW energy efficiency houses 100 and 70 (EnEV2007) / special purpose

investments

KfW Private Client Bank and KfW Municipal Bank:Program for energy efficient housing construction and rehabilitation

Energy efficiency

Energy efficient rehabilitation - municipalities

for municipalities, including municipal companies

purpose: energetic rehabilitation and investments for energy savings in schools, public swimming

pools, kindergardens, youth clubs

Social investments – energetic building rehabilitation

for non-for-profit organisationspurpose: as above

Global loans in Eastern Europe with the Energy Efficiency Finance Facility of the EU

purpose: energy efficiency in the industrial sector and building sector

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KfW Private Client Bank and KfW Municipal Bank:Commitments for energy efficient housing construction and rehabilitation

63 Mio. €207 Mio. €

25 Mio. €

70 Mio. €

226 Mio. €

Global loans Europe Fresh water suppySolid waste managent Energy savingsSanitation

KfW Municipal Bank:

3.094 Mio.€

5.770 Mio.€

Energy efficient rehabilitation

Energy efficient housing construction

KfW Private Client Bank:

Distribution of funding by KfW Private Client Bank and KfW Municipal Bank

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KfW Development Banks: Funding for international climate protection - examples

energy efficiency

renewable energy

„green saving books“ in Vietnambiodiversity and

water management in Jordanadaptation

energetic housing rehabilitation inEastern Europe

geothermal energy in Kenya

forest management in Peru… forest protection

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400

1120

2161

Climate Finance – New CommitmentsKfW Development Bank 2008

Mitigation

Adaptation

…Sectors

…Regions

Mill. €

Others

40%

Energy

Transport

Forests/Ag.

Water

Others

Asia & Oceania

Sub-Sahara Africa

MENA

Eastern Europe

Latin America

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KfW Carbon Fund

● Program to buy emmission reduction certificates from investments by German and European companiesefficient 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 2009CO2-compensation of business trips by German government and parliamentdevelopment of programs in developing and emerging countriespolicy advise in international negotiations

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37%

28%

20%

5%1%each 1%

China

Brazil

India

Egypt

Mexico

Malaysia

Honduras

Rest

29%

20%17%

7%

11%

4%

3%

2% 7% Landfill Gas

Renewable Energy:Wind

Renewable Energy:Hydro

Fossil Fuel Switch

Energy Efficiency:Others

Renewable Energy:Biomass

Coal Mine Gas

Transport

Rest

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KfW Carbon Fund - Portfolio 31 Dec 2009

● Countries of Origin ● Technologies

Total Purchase of CO2-Certificates: 28.1 Mio tonnes CO2e

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Climate Financing FromOther 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

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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

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Contact

Haje Schütte KfW BankengruppeDivision Chief Palmengartenstrasse 5–9 Private and Financial Sector Asia 60325 Frankfurt am Main

Fon +49 69 7431 - 4096Fax +49 69 7431 – [email protected]

Dr. Jochen Harnisch Fon: +49 69 7431-9695Coordinator Climate Change Policy [email protected]

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Back-up

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Credit Lines in UkrainePr

oble

mA

ppro

ach

Effe

cts

• Increasing demand for energy• High energy intensity:

- 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• 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• Generation of know-how in the financial sector• More effective use of energy has positive effects

on climate

2020

“Global Climate Fonds” (GKF) of BMU-ICI Pr

oble

mAp

proa

chEf

fect

s

• Increasing demand for energy in transition and developing countries world wide

• Dependency on fossil fuels• High energy intensity and GHG emissions

• Structured fund with risk sharing provisions • 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• Generation of know-how in the financial sector• Mitigation impact of broad use of EE / RE

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Energy efficiency funds- innovative PPP approach for climate protection

Investors

SICAV-SIF

Issue Proceeds

Issue Proceeds

Dividends/Redempt.

Issue Proceeds

-

-

-Pool

Asset Portfolio

Investment Managers

CustodianBank Auditors

The Fund

Dividends/Redempt.

Dividends/Redempt.

A Shares

C Shares

B Shares(Luxembourg)

Issue Proceeds

Issue Proceeds

Dividends/Redempt.

Issue Proceeds

-

Funding for ESCOs, larger industrial companies,small EE/RE projects

Loans to SMEs,private households and small RE projects

Asset Portfolio

Direct lending

Lending through financial institutions

Investment Managers

CustodianBank Auditors

The Fund

Dividends/Redempt.

Dividends/Redempt.

SICAV-SIF

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Concentrated Solar Power (CSP) in India Pr

oble

mAp

proa

chEf

fect

s

• Increasing demand for energy due to economic development and population growth

• 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• 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• CO2 savings of more than 25,000 tons p.a. • First experiences with this innovative

technology

Schutte, speaker, plenary 3

Technology

Transcript of Schutte, speaker, plenary 3