1. ADFIAP 33 Annual Meeting, May 10 – 12, 2010, Canada
Innovative Financing for a Greener Economy
„Financing a Lower Carbon Economy“
● Haje Schütte, Division Chief, Financial and Private Sector Asia

2. 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
2

3. Business areas: overall business volume
as of 31 December 2009 (EUR 63.9 bn)
KfW Mittelstandsbank Promotion of small- and medium-sized enterprises, 37
(SME Bank) business start-ups and other commercial clients in
Germany
KfW Privatkundenbank Housing programmes, environmental and climate
(Private Client Bank) protection, and educational finance for private clients in
Germany 25
KfW
Kommunalbank Financing for public clients, such as municipalities and
(Municipal Bank) regional promotional banks 15
International project & 14
Customized financing for exports and project
export finance
& corporate financing world-wide
KfW‘s public (KfW Development Bank) & private sector 7
Promotion of developing
(DEG) development
& transition countries
cooperation activities
2
Financial Markets Treasury and funding, securitization, and other capital
markets-related activities
3

4. KfW's business model – proven and successful
● Unique: proven and valid business model
● Promotional activities unchanged
● Stable or increasing operating result despite global crisis
Customer Customer's Capital
bank market
Promotional mandate State liability
Defined by Institution owned by the
Federal Republic and the
KfW Law federal states
Backed by Understanding II reached with EU Commission
4

5. KfW-Funding for the protection of the environment and climate
KfW funding for environment and climate 2009:
Funding for environment and
Commitments Total 2009 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
*with securitization
Of which 70% for funding to promote renewable energy and energy efficiency
5

6. KfW-funding for climate
Climate funding (renewable and energy efficiency) 2007 - 2009:
Renewable energy
Commitments year Energy efficiency
KfW Bankengruppe 2007 4.4 billion EUR 6.2 billion EUR
KfW Bankengruppe 2008 5.3 billion EUR 8.1 billion EUR
KfW Bankengruppe 2009 6.344 billion EUR 10.630 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
6

7. KfW SME Bank:
Funding for industrial environmental protection
and climate protection
General environmental Renewable Innovative
Energy efficiency
protection energy pilot projects
KfW program for
renewable energy
ERP program for environmental protection and
energy efficiency Environment innovation
for private clients
companies / SME, program
for companies
municipalities
A general environmental protection investments, for private clients,
focus on transportation as well as other energy companies / SME,
Power generation
efficiency investments (bigger companies, efficient municipalities
wind, solar energy, geothermal
energy generation)
energy, water, biogas, biomass
large scale projects with
for SME demonstration character
Heat market
B energy efficiency investments
bio mass, bio gas,
(only on demand side)
geothermal energy, big solar
Complemented by grant funding for advisory services
energy, including heat storage
Facility and EE heat networks
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8. KfW Mittelstandsbank (SME Bank):
Commitments for industrial environmental protection
and climate protection
Distribution of funding by KfW Mittelstandsbank:
84 Mio. €
388 Mio. €
372 Mio. €
5245 Mio. €
KfW-program for renewable energy
ERP program for environmental protection and energy efficiency: general investments
ERP program for environmental protection and energy efficiency: energy efficiency investments
Environment innovation program
8

9. KfW Private Client Bank and KfW Municipal Bank:
Program for energy efficient housing construction
and rehabilitation
Energy efficiency
Energy efficient housing construction Energy efficient rehabilitation - municipalities
for private clients, housing companies, for municipalities, including municipal companies
municipalities
purpose: energetic rehabilitation and investments
purpose: new construction of KfW energy effiency for energy savings in schools, public swimming
houses 70 and 55 (EnEV2007) pools, kindergardens, youth clubs
Social investments – energetic building
rehabilitation
Energy efficient rehabilitation
for non-for-profit organisations
loans for private clients, housing companies, purpose: as above
municipalities / grants for private clients
purpose: rehabilitation into KfW energy efficiency Global loans in Eastern Europe with the Energy
houses 100 and 70 (EnEV2007) / special purpose Efficiency Finance Facility of the EU
investments purpose: energy efficiency in the industrial sector
and building sector
9

10. KfW Private Client Bank and KfW Municipal Bank:
Commitments for energy efficient housing construction
and rehabilitation
Distribution of funding by KfW Private Client Bank
and KfW Municipal Bank
KfW Municipal Bank: KfW Private Client Bank:
70 Mio. €
3.094 Mio.€
207 Mio. €
63 Mio. €
25 Mio. €
5.770 Mio.€
226 Mio. €
Global loans Europe Fresh water suppy Energy efficient rehabilitation
Solid waste managent Energy savings
Energy efficient housing construction
Sanitation
10

11. KfW Development Banks: Funding for international
climate protection - examples
energy efficiency energetic housing rehabilitation in
Eastern Europe
renewable
geothermal energy in Kenya
energy
biodiversity and „green saving books“ in Vietnam
… forest protection forest management in Peru
adaptation water management in Jordan
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12. Climate Finance – New Commitments
KfW Development Bank 2008
…Sectors
Energy
Mill. €
Transport
Mitigation 1120 Forests/Ag.
40%
Water
Adaptation 400
Others
…Regions
Others 2161
Asia & Oceania
Sub-Sahara Africa
MENA
Eastern Europe
Latin America 12

13. KfW Carbon Fund
● Program to buy emmission reduction certificates from investments by German and
European companies
 efficient 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 2009
 CO2-compensation of business trips by German government and parliament
 development of programs in developing and emerging countries
 policy advise in international negotiations
13

14. KfW Carbon Fund - Portfolio 31 Dec 2009
Total Purchase of CO2-Certificates: 28.1 Mio tonnes CO2e
● Countries of Origin ● Technologies
2% 7% Landfill Gas
each 1%
1% 3%
5% Renewable Energy:
China Wind
4% 29%
Brazil Renewable Energy:
37% India Hydro
Egypt Fossil Fuel Switch
11%
Mexico
Energy Efficiency:
20% Malaysia Others
Honduras Renewable Energy:
Biomass
Rest 7%
Coal Mine Gas
Transport
20%
28% 17% Rest
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15. Climate Financing From
Other 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
15

16. 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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17. Contact
Haje Schütte KfW Bankengruppe
Division Chief Palmengartenstrasse 5–9
Private and Financial Sector Asia 60325 Frankfurt am Main
Fon +49 69 7431 - 4096
Fax +49 69 7431 – 2944
haje.schuette@kfw.de
Dr. Jochen Harnisch Fon: +49 69 7431-9695
Coordinator Climate Change Policy jochen.harnisch@kfw.de
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18. Back-up
18

19. Credit Lines in Ukraine
• Increasing demand for energy
• High energy intensity:
Problem
- 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
Approach
• 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
Effects
• Generation of know-how in the financial sector
• More effective use of energy has positive effects
on climate
19

20. “Global Climate Fonds” (GKF) of BMU-ICI
• Increasing demand for energy in transition and
Problem
developing countries world wide
• Dependency on fossil fuels
• High energy intensity and GHG emissions
• Structured fund with risk sharing provisions
Approach
• 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
Effects
• Generation of know-how in the financial sector
• Mitigation impact of broad use of EE / RE
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21. Energy efficiency funds
- innovative PPP approach for climate protection
Asset Investment
Portfolio Managers The Fund Investors
A Shares
Issue Proceeds
Loans
to SMEs,
- Lending through
private financial institutions Dividends/Redempt.
households
and small SICAV-SIF
SICAV-SIF B Shares
RE projects Issue Proceeds
-Pool (Luxembourg)
Funding Dividends/Redempt.
for ESCOs,
larger industrial
Direct lending
companies,
- Issue Proceeds
small EE/RE projects C Shares
Dividends/Redempt.
Custodian
Auditors
Bank
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22. Concentrated Solar Power (CSP) in India
• Increasing demand for energy due to
economic development and population growth
Problem
• 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
Approach
• 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
Effects
• CO2 savings of more than 25,000 tons p.a.
• First experiences with this innovative
technology
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