Structuring and Implementing Schemesto Improve Energy Efficiency in the Residential Building Sector

The Experiences of KfW

Gudrun Gumb

Senior Project Manager

KfW Bankengruppe, Product Development Housing Programmes

June, 19th 2009

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KfW Bankengruppe in brief

Promotional bank of the Federal Republic of Germany

Founded in 1948

Shareholders: Federal Republic of Germany (80%), German federal states (20%)

Headquarters: Frankfurt am Main; branch offices: Berlin and Bonn

Representative offices: around 50 offices and representations worldwide

Balance-sheet total at the end of 2008: EUR 395 billion

Financing volume 2008: EUR 70,6 billion

4.228 employees in 2008

Rating: AAA/Aaa/AAA

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KfW BankengruppeEnvironmental and climate protection

Environmental and climate protection is a major promotionalpriority! Total commitments in this

sector in 2008: EUR 19.5 bn

Förderbank and Mittelstandsbank EUR 14.5 bn KfW Entwicklungsbank EUR 1.7 bn KfW IPEX-Bank EUR 2.6 bn DEG EUR 0.7 bn

Commitments in 2008 for:

renewables EUR 5.3 bn energy efficiency EUR 8.1 bn

KfW Bankengruppe is one of the world's biggest financing institution for energy efficiency and renewable energy

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Energy Efficiency in the ResidentialBuilding Sector Agenda

Basic facts

Regulatory Framework

Programme Details

KfW-Efficieny House Standard

Summary: Incentives and Factors of Succes

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Capability of energetic renovation in Germany 39 mio housing units 75% built before 1979 potential of renovation 20 mio housing units

Programme started in 2001 450.000 loans Commitment volume of roughly 24 billion euros 1,2 mio housing units

Sponsored by federal funds Budget to fund programme incentives: 2008 through 2011 annually app. EUR 1.4

billion

Energy Efficiency in the Residential Building Sector Basic Facts

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German Energy Conservation Ordinance (EnCO)(Energieeinsparverordnung – EnEV)

Energy efficiency requirements for new and existing buildings  

Energy Efficiency in the Residential Building Sector Regulatory Framework

„Promotional Programmes“

„Information andConsulting“

and other regulations

I N S T R U M E N T I N S T R U M E N T

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Building stockNew building

Energy Efficiency in the Residential Building Sector Programme Details

Energy-Efficient Construction

subsidised interest loans max. 75.000 EUR per housing unit additional repayment bonus possible KfW-Efficiency House standard or single measures grants as an alternative to loan

max. 13.125 EUR per housing unit additional special support available

Energy-Efficient Rehabilitation

Higher energy efficiency means better conditions.

subsidised interest loans max. 50.000 EUR per housing unit KfW-Efficiency House standard two promotional stages

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Energy Efficiency in the ResidentialBuilding Sector KfW-Efficiency House Standard

Abbreviations:NL = New Building Level according EnCO

Primary Energy Demand (kWh/a)

130-66 kWh/a

85-44 kWh/a

65-33 kWh/a

= 100 % of NL

= 70% of NL

= 55 % of NL

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Energy Efficiency in the Residential Building Sector KfW’s on-lending system

refinancing loan (maturity e.g. 20 years)

loan to homeowner (maturity e.g. 20 years)

Interest rate:

1.41%*

BankIndividual

homeownerInterest

rate: 0.66%* Margin for

credit risk and

handling 0.75%*German

Government

Capital market

Interestsubsidy

Funding

* p.a. eff.

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Energy Efficiency in the Residential Building Sector Summary: incentives and factors of success

Factors of success to reach broadscale impacts Transparency and Standardization

KfW-Efficiency House as a successful brand for energy efficiency in Germany - confirmed by an energy consultant

KfW‘s Onlending – System

En

ergy E

fficiency

Incentives for houseowners subsidised intrest loans additional repayment bonuses

possible grants possible Higher efficiency means higher

promotion

Structuring and Implementing Schemes to Improve Energy Efficiency in the Residential Building SectorThe Experiences of KfW

Gudrun Gumb

Senior Project Manager

KfW Bankengruppe, Product Development Housing Programmes

June, 19th 2009

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Annex:Energy Efficient Construction and Rehabilitation budget and promotional effects

Y E A R

V O L U M E

Commitment Volumemio EUR

Investmentsmio EUR

2006

2007

2008

20091. quarter

1.500

850

1.400

1.500

4.970

6.998

6.669

1.466

11.845

10.739

13.387

2.673

Budget p.a.mio EUR

Housing Unitsnumber

327.592

204.184

280.483

63.084

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Annex Energy Efficient Construction and Rehabilitation -Energy-efficient Construction

Promotional goal/ target group:

Conditions:

Eligible measures:

- Financing share

- Loan amount

- Loan term

- Disbursement amount

- Fixed-interest period

- Free of redemption

- Off-schedule repayment

Construction or initial purchase of KfW Efficiency- Houses

To finance the construction of KfW-Efficiency Houses/ all investors who construct a KfW-Efficiency House

- 100% of the construction/investment costs

- No more than EUR 50,000 per housing unit

- Up to 30 years

- 100%

- 10 years

- At least 1 year, no more than 5 years

- At no cost at any time during the fixed-interest period

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Annex Energy Efficient Construction and Rehabilitation Energy-efficient Rehabilitation (Loan Variant)

Promotional goal/ target group:

Conditions:

Eligible measures:

- Financing share

- Loan amount

- Loan term

- Disbursement amount

- Fixed-interest period

- Grace years

- Off-schedule repayment

all measures that contribute to achieve KfW-Efficiency House; individual measures thal fullfill the technical requirements of the program

- Up to 100% of the eligible costs

- No more than EUR 75,000 or 50,000

per unit

- Up to 30 years

- 100%

- 10 years

- Up to 5 years

- At no cost at any time during the fixed-interest period

+ addl. repayment

bonus (5% or 12.5%) is

possible dep. on degree of

rehabilitation

+ addl. repayment

bonus (5% or 12.5%) is

possible dep. on degree of

rehabilitation

save energy and reduce CO2 emissions in residential buildings /

all investors in measures at resedential buildings

+ addl. grants for

special support+ addl. grants for

special support

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Annex Energy-efficient Rehabilitation program (Grant Variant)

Promotional goal/ target group:

Conditions:

Eligible measures:

- individual measures

- KfW-Efficiency House 100

- KfW-Efficiency House 70

- 10% of the eligible investment costs, no more than EUR 7,500 per housing unit

To save energy and reduce CO2 emissions in residential buildings/owners (natural persons) of single and two-family houses or apartments

- 17.5% of the eligible investment costs, no more than EUR 13,125 per housing unit

- 5% of the eligible investment costs, no more than EUR 2,500 per housing unit

all measures that contribute to achieve KfW-Efficiency House including planning and supervision, as well as secondary work; individual measures thal fullfill the technical requirements of the program

+ addl. grants for

special support+ addl. grants for

special support