KfW and Green HousingCapital market Interest subsidy Funding AAA Rating (State liability) Promotional mandate defined by KfW Law › Refinancing through KfW and on-lending through

Bank aus Verantwortung

KfW and Green Housing Karl von Klitzing

KfW Development Bank

Cape Town, 18 November 2014

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2 Thema der Präsentation / Ort / Datum [TT. Monat Jahr]

More than 60 years of KfW Financing with a public mission

›  Promotional bank of the Federal Republic of Germany

›  Established in 1948 as Kreditanstalt für Wiederaufbau

›  Shareholders: 80% Federal Republic, 20% federal states

›  Headquarters: Frankfurt am Main Branches: Berlin, Bonn and Cologne

›  Representative offices: 80 offices and representations worldwide

›  Balance sheet total 2013: EUR 464,8 billion

›  Financing volume 2013: EUR 72.5 billion

›  5,374 employees (2013)

›  Best long-term rating: AAA/Aaa/AAA



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Domestic and International Business Areas KfW Group aims for sustainable improvement of the economic, social, and ecological conditions of people’s lives

SME Bank Promotion of SME, business start-ups and other commercial clients in Germany

Municipal and Private Client Bank/ Credit Institutions

Housing, environmental and climate protection, educational finance for private clients as well as financing for public clients

Export & project finance

Customized financing for exports and project & corporate financing world-wide

Promotion of developing & transition countries

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

31 %

40 %

19 %

9 %

Dom

estic

bus

ines

s In

tern

atio

nal b

usin

ess

38 % Environment investment quota: 47 % Domestic

SME quota:

Based on year-end 2013 data.

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KfW Development Bank and DEG Our Competencies

We provide more than money – our core competencies:

1. Climate and environment protection We are the world's largest financier of renewable energies in

developing countries.

2. Financial sector development We are world leaders in the area of financial system

development and microfinance.

3. Water We are one of the most important suppliers of expertise and the

world‘s third largest bilateral donor in the water sector.

4. Development research We promote interaction and synergies between scientific

research and practice.



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Locations KfW Development Bank and DEG

Manila

Taschkent

Jerewan Baku

Tiflis

Jakarta

Beijing

Ulan Bator

Bangkok

Hanoi Dhaka

Phnom Phen

Kathmandu Kabul

Islamabad

Bishkek Dushanbe

Neu-Delhi

Mumbai Mexiko-Stadt

São Paulo

Managua

Brasilia La Paz Lima

Tegucigalpa

Quito

Bogotá

Guatemala-Stadt

Kairo

Sana´a

Amman Damaskus Ramallah-Al-Bireh Rabat

Windhoek

Addis Abeba

Maputo

Daressalam

Nairobi Kampala

Lusaka

Pretoria

Kigali

Ouagadougou Dakar

Accra

Jaunde

Bamako

Cotonou

Kinshasa

Niamey

Lilongwe

Abu Dhabi

Johannesburg

Moskau

Ankara Skopje

Belgrad Pri!tina Sarajevo

Podgorica Tirana

Kiew

Istanbul

San Salvador

Juba

Jerewan Tunis

January 2013

Vientiane



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KfW Development Bank: Distribution of new commitments in 2013 (5.3 billion EUR)

6

Sub-Saharan Africa: 23% of KfW’s 2013 commitments



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On-lending Principle Neutrality in lending business (no branch network of our own)

Refinancing loan

Loan to customer

Interest

Customer’s bank Customer

Interest Margin for credit risk and handling

Government or KfW

Capital market

Interest subsidy

Funding AAA Rating (State liability)

Promotional mandate

defined by KfW Law

›  Refinancing through KfW and on-lending through commercial banks.

State Guarantee

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Consistent energy standards for residential and commercial buildings KfW-Efficiency house concept

Benchmark is the efficiency standard of a new building according to the German building code (energy conservation ordinance).

transmission heat loss primary

energy demand per sqm



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§

§

§

§ §

E n e r g i e e f f i z i e n z

Regulatory minimum requirements Best practice research

Primary Energy D

emand

Development of regulatory minimum requirements of energy efficiency of new constructed houses compared to best practice and research

3-liter- houses

Solar- houses

Low-energy- houses

Zero-energy- houses Plus-energy- houses

Development of Energy Efficiency in Buildings in Germany



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•  Harmonization of regulation, legislation and promotion

•  Technical standards

•  Information and awareness

Domestics Lessons Learnt in Germany

Comprehensive Framework Eligibility Criteria

KfW-Efficiency House Assessment & Evaluation

•  Residential and commercial properties eligible

•  Incentives for different groups provided

•  Brand for energy efficiency

•  Creates visibility & transparency

•  Auditors

•  Assessment and calculation tools

•  Meters, measuring devices

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ECOCASA Mexico Project Cycle and Operation

SHF*-IDB*-KfW define an operational outline to determine the eligibility of the proposed projects in a efficient manner; under 5 stages:

! " # $ %

!"#"$%&"' (#)$*)+,%-./%%$ 012.3.45!.3.627 2,-)-8,)$.5-+"'9":,)'; !"<)''%$$):%'

&'()*+,-&'(.(/01 &'()*+,-234510,3(6 7..'(801 9(6/,'5+,3(6-:(06 ;*<36-(=-9(6/,'5+,3(6-

>(',<0<*-:(06

?@2

AB

1.  The housing developer presents a low carbon housing project for ECOCASA financing. 2.  An independent consultant runs a simulation of the project, considering the energy

performance of the house with the SISEVIVE-ECOCASA tool, developed by INFONAVIT**. 3.  SHF, IDB and KFW accept or reject the project proposal on the basis of clear eligibility

criteria. 4.  SHF notifies the financial intermediary and assigns the concessional loans to the project. 5.  The developer with the concessional funds begins construction of the project.

*Sociedad Hipotecaria Federal (SHF), the Inter-American Development Bank (IDB) **INFONAVIT, the National Workers’ Housing Fund, It is the largest social mortgage financial institution in Mexico, and a strategic partner in the implementation of the ECOCASA Program 11



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Energy Efficient Homes in India Project Volume and Financing Mechanism

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•  KfW provides concessional loan of EUR 50 million to NHB

•  NHB refinances local banks and housing finance companies

•  Banks issue loans to the buyers of energy efficient apartments

•  Complementary technical assistance for capacity building of stakeholders (e.g. developers and finance institutions)



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International Housing Solutions, South Africa Project

›  “Green” trustee participation of EUR 15 Mio. on International Housing Solutions

›  Construction of 25.700 apartments, of which 5.000 are energy efficient

›  Waterfall structure with lower target returns for green investors

Partner

›  Private Equity Fund, 3 billion ZAR with a PPP ownership structure

›  First fund in South Africa with an EE focus

›  Home buyer/tenants are for the most parts customers of the middle class (up to 16.000 ZAR)

›  Energy efficiency certification via the IFC EGDE Tool



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Conclusion Catalysts for the Promotion of Green Housing

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Concessional Conditions

Monitoring

Technology

Regulatory Framework

Consumer Awareness

Technical Standards

Political

Commitment



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Contact

Karl von Klitzing

E-mail: [email protected]

KfW Bankengruppe

Palmengarten 5-9

60325 Frankfurt am Main

Germany

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Documents

KfW and Green HousingCapital market Interest subsidy Funding AAA Rating (State liability) Promotional mandate defined by KfW Law › Refinancing through KfW and on-lending through