Germany

GE-4:KfW Environmental and Energy Efficiency Programmes (formally ERP)

Policy Description

As of 1 January 2012, the German Development Bank KfW has introduced two programs, the KfW Energy Efficiency Programme and KfW-Environment Programme. The programmes provide loans for the financing of environment protection and energy saving investments for private companies and self-employed persons. Activities can be financed as long as they have positive impact on the environment. In the energy efficiency programme the maximum amount loaned is EUR 25 million. The financing share can be up to 100 % for small companies. Lenders can receive up to three repayment-free start-up years. 

Description

As of 1 January 2012, the German Development Bank KfW has introduced two programs, the KfW Energy Efficiency Programme and KfW-Environment Programme. The programmes provide loans for the financing of environment protection and energy saving investments for private companies and self-employed persons. Activities can be financed as long as they have positive impact on the environment. The loan application is done via local banks. Interest rates are set by the local bank according to a risk assessment (including the financial situation of the company and the quality of securities). In the energy efficiency programme the maximum amount loaned is EUR 25 million. The financing share can be up to 100 % for small companies. Lenders can receive up to three repayment-free start-up years. [1], [2].

 

The two programmes replace the former ERP (European Recovery Programme) Environmental Protection and Energy Efficiency Programme, which was a loan programme from the German Development Bank KfW. Compared with the previous ERP environment and energy efficiency programmes, the new KfW programme also includes and encourages measures for resource efficiency and material savings. Renewable energy and CHP projects are excluded from these programmes as they are financed via other programmes. [3]

 

SMEs with an annual energy bill of over EUR 5,000 can also apply for an energy audit provided by KfW (see GE-8). Applications for such an audit have to be made with a regional partner of KfW, for example, the Chamber of Commerce, economic development corporation or local energy agency. The grant for the initial consultation is 80% of the eligible consultancy costs, up to a maximum of EUR 1,280. The grant for detailed advice is 60% of the eligible consultancy costs, up to a maximum grant of EUR 4,800. [5]

Policy Information Expand this section for information on the key features of the policy, such as its date of introduction, categorization, main objective(s) and linkages with other policies.

Policy Categorisation

Policy Instrument Type: Economic, Incentives & Subsidies, Economic, Incentives & Subsidies

Position in the Pyramid

About Us

Participation: Mandatory

Period

Start Date: 2012

Policy Linkages

Supports Voluntary agreements with German industry Effort Defining
Supported By CHP Law (Kraft Wärme Kopplungsgesetz) Supporting Measure
Supported By 30 Pilot Network Project Supporting Measure

Agencies Responsible

KfW (German development Bank)
German emissions trading authority (DEHSt)

Primary Objective: Energy

Objective

­- Supporting investments in energy efficiency measures ­- Supporting investments in environmental protection measures

Target Group

private companies, companies under an energy contracting, and self-employed professionals. In addition the environmental programme also includes public-private partnerships as target group.

Driver of energy consumption or emissions affected by policy: energy saving or energy efficiency improvement (energy efficiency programme) / emission reductions or energy saving (environmental protection programme)

Implementation Information Expand this section for information on targets, monitoring, verification and enforcement regimes, and implementation requirements and tools.

Coverage

All in target groups

Quantitative Target? no

Progress Monitored? yes

Verification Required? no

Enforced? no

Sanctions: None

Requirements on the Target Group

None apart from application and reporting via standardised route. Borrowers apply directly for the loans to their own bank.

Support by Government

N/a

Implementation Toolbox

N/a

Complexity of Implementation

Government

Case-by-case evaluation of application

Target Group

Applicants need to fill out standardised application forms

Impacts, Costs & Benefits Expand this section to find information on policy effectiveness and efficiency.

Impact Quantitative Estimate Qualitative Estimate
Estimated effect on energy consumption or emissions ­An annual saving of 37 kt CO2 was calculated for 2008 [4] ­KfW Energy efficiency programme 2009-2010: energy savings of 2.9 PJ/a (electricity conversion factor: 1) ­KfW Environment programme 2009-2010: energy savings of 1.4 PJ/a (electricity conversion factor: 1) ­KfW Environmental program 2003-2009: savings 2003-2007: 3.8 PJ/a (electricity conversion factor: 1) [6]
Estimated costs/benefits for industry total amount of loans disbursed under the two programmes: ­2009: 1.3 billion EUR ­2010: 1.5 billion EUR ­2011: 3.2 billion EUR [7]
Estimated cost for government N/a

References & Footnotes

References

[1] KfW, Energieefficienzeprogramma, http://www.kfw.de/kfw/de/Inlandsfoerderung/Programmuebersicht/KfW-Energieeffizienzprogramm/ and http://www.kfw.de/kfw/en/Domestic_Promotion/Our_offers/Energy_efficiency_ans_environmental_protection_in_enterprises.jsp#KfWEnergyEfficiencyProgramme. Accessed 16/2/2012

[2] MURE II Industry, Environmental and Energy Efficiency Programme (ERP-Umwelt- und Energieeffizienzprogramm), http://www.isisrome.com/data/mure_pdf/industry/GER43.PDF, accessed 16/2/2012

[3] BMWi Förderdatenbank, http://www.foerderdatenbank.de/Foerder-DB/Navigation/Foerderrecherche/suche.html?get=674f885d4e4416c9d48d5669d9ff3631;views;document&doc=11591, accessed 21/2/2012.

[4] Eichhammer et al.: Ermittlung der Klimaschutzwirkung des Integrierten Energie- und Klimaschutzprogramms der Bundesregierung IEKP und Vorschlag für ein Konzept zur kontinuierlichen Überprüfung der Klimaschutzwirkung des IEKP. Fraunhofer ISI, Karlsruhe 2010

[5] KfW, Energieberatung Mittelstands, http://www.kfw.de/kfw/de/Inlandsfoerderung/Programmuebersicht/Energieberatung_Mittelstand/index.jsp, accessed 02/04/2012

[6] BMWi (Federal Ministry of Economy): 2. Nationaler Energieeffizenz Aktionsplan (NEEAP), 2011, http://www.bmwi.de/DE/Mediathek/publikationen,did=438584.html

[7] KfW: Förderzahlen 2011, Frankfurt am Main, http://www.kfw.de/kfw/de/KfW-Konzern/Medien/Material_fuer_die_Presse/PDF-Dateien_Praesentationen/2011/120201_KfW_Foerderzahlen_2011.pdf

Footnotes

(*1) Extensive evaluations are available on elements of the program, specifically on the renovation of buildings. No overall evaluation could be found on the entire program.