Practices

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Saving Energy in Europe: 15 Good Practice Case Studies - Financing and Delivery of Energy Saving Measures: KFW, Germany

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The EEB has compiled a great showcase of different good practice case studies that will hopefully inspire similar projects all over Europe. In order to achieve our energy saving goals and reap the benefits they offer we can no longer afford to see these good practice schemes as isolated cases, as the ‘select exemplary few’. These case studies should be replicated, expanded, developed and deepened so that these approaches become the norm, every day practice - not the alternative. This Good Practise Case Study demonstrates how energy saving incentives/schemes introduced at different levels (state, borough, city etc.) can result in reduced energy use.

 

Aims and Objectives:    KfW (Kreditanstalt für Wiederaufbau) is a promotional bank in the Federal Republic of Germany which supports change and encourages forward-looking ideas in Germany, Europe and throughout the world.

Implementation Timeframe:

KfW began promoting energy efficiency in housing in the early 90s and launched in 1993, along with the CO2 reduction programme, the first programme strictly focused on energy efficiency. The CO2 rehabilitation programme (today renamed to energy-efficient construction and rehabilitation) started in 2001 and is sponsored by the federal Government.

How it Works: 

The KfW Financing Programmes for energy efficiency support a financial framework for investments targeted especially at residential buildings. The investors are given long term, low interest loans supported with professional, independent advice. The loans have fixed interest rates ranging over 10 years with repayment starting after two years. The loans can amount up to €75,000. In addition to the reduction in CO2 emissions, KfW’s financing schemes provides thousands of jobs, mainly in the construction industry. Once successful, the loan applicant has to inform KfW about the use of the funds according to the programme conditions. This programme has contributed significantly to help meet the climate goals of Germany.

Results:

The loans granted by KfW in 2008 to German entities for the financing of energy efficiency investments in residential buildings added up to €6,343 million. This initiated an annual reduction of greenhouse gas emissions amounting to 837,000 tonnes of CO2 emissions. In 2009 the loans given to finance energy efficiency investments in residential buildings amounted to €8,864 million and resulted in annual greenhouse gas emission savings of 1,175,000 tonnes of CO2 emissions. In 2010 the loans amounted to €8,746 million and resulted in annual greenhouse gas emission savings of 1,049,000 tonnes of CO2 emissions. Further effects were achieved by KfW financing measures for energy efficiency investments in firms and municipalities

Key Benefits:

Reduction in Greenhouse gas emissions

  • 2008:  837,000 tonnes
  • 2009:  1,175,000 tonnes
  • 2010:   1,049,000 tonnes

Loans granted in

  • 2008:  € 6,343 million
  • 2009:  € 8,864 million
  • 2010:  € 8,746 million

For further details and elaboration on any of the issues touched upon in this case study, please contact the European Environmental Bureau, by clicking here.

Contact information for KFW, here.

Author(s) information

Name

The European Environmental Bureau (EEB)

Lessons learnt

KfW’s schemes show that when supported by expert advice and low interest loans, people are more likely to invest in energy efficiency improvements in their homes. The concept of combining access to loans with access to impartial, professional advice via one agency helps to simplify an often complex and overwhelming process. A history of poor and unreliable services and unaccredited agencies delivering below par improvements has done little to build trust for the householder. With good promotion these loan schemes can start a ‘wave’ of energy saving investments that can also help businesses and create jobs. National Energy Efficiency Funds could provide an essential role in developing packages that can help leverage private capital for energy saving projects. They could act as one stop shops for service providers and customers, to identify, direct and access finance for energy saving in a transparent and quality controlled manner.

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