Germany

GE-11:KfW financing initiative energy transition

Policy Description

The KfW public bank set up a new loan programme in 2012 targeted at large companies which plan to implement large scale efficiency projects. The programme promotes new investment in technologies that consume at least 15% less final energy than the branch average of comparable technologies as well as replacements that lead to a minimum improvement of final energy demand of 20%. Concerned are buildings and machines (excluding for residential use), innovations in energy efficiency, production, storage and transmission as well as renewable energy. The loans provide 50-100% of the debt financing needed. 

Description

The KfW public bank set up a new loan programme in January 2012 in response to the governments’ decisions to accelerate the energy transition.

The loan programme is targeted at large companies with an annual business volume of the group between 500 million and 4 billion EUR. The programme promotes new investment in technologies that consume at least 15% less final energy than the branch average of comparable technologies as well as replacements that lead to a minimum improvement of final energy demand of 20%. Concerned are buildings and machines (excluding for residential use), innovations in energy efficiency, production, storage and transmission as well as renewable energy. Eligible are technology costs for: Heating, cooling, lighting, CHP, building shell, electric motors, pumps, compressed air, process heat and cold, ICT. Also eligible are personnel costs and costs for travel, material, ICT, consultancy and services, investment costs, test series, quality management.

The loans provide 50-100% of the debt financing needed. Loans amounts range between 25 to 100 million EUR per project. This programme thus finances large scale projects only. Companies can apply for maximum one project per year.

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).The interest rate is fixed for maximum 10 years. The loan duration can be up to 20 years. [1], [2] 

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

Position in the Pyramid

About Us

Participation: Voluntary

Period

Start Date: 2012

Policy Linkages

Supports CHP Law (Kraft Wärme Kopplungsgesetz) Supporting Measure
Supports Voluntary agreements with German industry Effort Defining

Agencies Responsible

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

Primary Objective: Energy

Objective

Supporting investments in energy efficiency measures

Target Group

large companies with an annual business volume of the group between 500 million and 4 billion EUR

Driver of energy consumption or emissions affected by policy: Total energy use / Specific energy consumption / Technology implementation

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

Coverage

All in target group

Quantitative Target? no

Progress Monitored? yes

Monitoring Done By

Organisation Type Organisation Name
Government Agency KfW (German development Bank)

Verification Required? yes

Verification Done By

Organisation Type Organisation Name
Government Agency KfW (German development Bank)

Enforced? yes

Enforcement By

Organisation Type Organisation Name
Target Group

Requirements on the Target Group

Support by Government

Implementation Toolbox

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 N/a
Estimated costs/benefits for industry N/a
Estimated cost for government N/a

References & Footnotes

References

[1] KfW-Finanzierungsinitiative Energiewende , Programme overview, homepage KfW, http://www.kfw.de/kfw/de/Inlandsfoerderung/Programmuebersicht/KfW-Finanzierungsinitiative_Energiewende/index.jsp acessed on 21.02.2013

[2] Merkblatt KfW-Finanzierungsinitiative Energiewende, Programmnummer 291, Investitionskredite für größere Vorhaben gewerblicher Unternehmen im Rahmen der Energiewende, version of 09/2012, http://www.kfw.de/kfw/de/I/II/Download_Center/Foerderprogramme/versteckter_Ordner_fuer_PDF/6000002284_M_291.pdf accessed on 21.03.2012