Promotional year 2017: KfW scales back financing volume slightly as planned

Frankfurt am Main (ots) -

- Volume of business reaches EUR 76.5 billion (2016: EUR 81.0
billion)
- Promotion of start-ups, innovation and energy efficiency grows
significantly
- Financial Cooperation with increasing commitment volume
- Export and project finance in a highly competitive environment
at EUR 13.8 billion (2016: EUR 16.1 billion)
- Promotion of energy-efficient construction and refurbishment
since 2006 results in annual carbon savings of 9.4 million
tonnes

As planned, KfW scaled back its promotional business slightly in
2017, with a total business volume of EUR 76.5 billion (2016: EUR
81.0 billion). In Germany, KfW reduced its funding by around 6% to
EUR 51.8 billion last year in view of the strong economic development
and the continued positive financing environment for commercial and
private investors. Promotion focused on innovation, start-ups and
energy efficiency, which recorded considerable growth. International
business reached a volume of EUR 23.5 billion (2016: EUR 24.9
billion) and was marked by a significant increase in commitments in
Financial Cooperation with developing and emerging countries, which
amounted to EUR 8.2 billion (2016: EUR 7.3 billion). Export and
project finance reached a volume of business of EUR 13.8 billion
(2016: EUR 16.1 billion) in a highly competitive environment.

As in previous years, KfW continued to focus its promotional
activities in 2017 on qualitative targets such as support for climate
change mitigation and environmental protection. The percentage of
financing of projects in the area of green finance, for example, rose
from 31% in 2010 to its current level of 43%. KfW also consequently
continues to foster sustainability on the capital market, for
example, through its increased involvement in the green bond sector
or the even stricter orientation of its sustainable investment
approach in its liquidity portfolio.

Just as important as green finance for KfW is support for small
and medium-sized enterprises in investment finance. Roughly 52,000
start-ups and SMEs benefited from KfW funding in 2017. Overall, the
ratio of KfW financing related to SMEs was 44% in 2017 (2016: 41%).

Dr Günther Bräunig, Chief Executive Officer of KfW, said: "2017
was a good and successful promotional year. For us, our promotional
mandate and promotional impact are the focus. When the financing
environment and general macroeconomic conditions are as good as they
are at present, we as a promotional bank concentrate more on areas of
particular relevance to the future, such as innovation,
digitalisation and energy efficiency in Germany, as well as the
sustainable improvement of living conditions in the partner countries
of our Financial Cooperation."

Details on the business sectors' promotional activities

The volume of new business in the Mittelstandsbank (SME Bank)
business sector last year amounted to EUR 21.9 billion, thus
exceeding the already high level of the previous year (2016: EUR 21.4
billion). The result mainly reflects the high demand for investment
loans in the areas of energy efficiency, digitalisation and
innovation.

At EUR 6.0 billion, commitments in the priority area of general
corporate finance fell slightly short of the previous year's level
(2016: EUR 6.4 billion). Start-up financing developed positively at
EUR 3.8 billion, once again surpassing the already solid result from
2016 (2016: EUR 3.6 billion) despite a general downturn in start-up
activities.

Innovation financing posted a very strong result the previous year
and, with commitments of EUR 2.0 billion, was well above the previous
year's figure (2016: EUR 0.6 billion). In July 2017, KfW expanded
this priority area to include digitalisation and launched the new ERP
Innovation and Digitalisation Programme, which provides even better
support for SMEs investing in this area. With a commitment volume of
approx. EUR 1.5 billion, it significantly exceeded expectations.

By further developing its ERP Venture Capital Fund investments and
subscribing to its participation in High-Tech-Gründerfonds III (HTGF
III), KfW took the first steps towards realigning equity finance in
2017. In future, the financing offering in the venture capital
segment will be pooled and substantially expanded in a separate
subsidiary. A total of around EUR 2 billion is to be made available
over the next ten years via venture capital funds for growth-oriented
high-tech companies. KfW is thus making an important contribution to
increasing the volume of venture capital in Germany and closing
financial gaps for start-ups.

With a promotional business volume of EUR 10.2 billion (2016: EUR
10.7 billion), the environment priority area delivered an excellent
performance in 2017. In the promotional programmes for energy
efficiency projects of commercial enterprises, the already very
impressive figure from the previous year was exceeded at EUR 5.7
billion (2016: EUR 5.2 billion). This priority area was strengthened
in 2017 by the introduction of a programme to promote investment in
the avoidance or utilisation of waste heat in companies. Commitments
in the KfW Renewable Energies programme, in contrast, fell short of
the previous year's record figures of the (2016: EUR 4.7 billion),
but still reached a solid level of EUR 3.9 billion.

The business sector Kommunal- und Privatkundenbank/Kreditinstitute
(Municipal and Private Client Bank/Credit institutions) can look back
on a very successful financial year in 2017. The commitment volume of
EUR 29.9 billion was again at a very high level (2016: EUR 33.7
billion).

With a commitment volume of EUR 18.9 billion (2016: EUR 20.8
billion), the priority area of housing once again made the most
significant contribution in 2017. In particular the grant programmes
for energy-efficient construction and refurbishment and
age-appropriate conversion experienced a considerable surge in
demand. This accounted for around 59% of the housing commitments
(2016: 49%). The simple online application via the new KfW grant
portal has played a key role in supporting this development.

With a promotional business volume of EUR 3.9 billion (2016: EUR
4.1 billion), infrastructure financing made a stable contribution. A
decline in volume due to the special facility "Refugee Accomodation",
which had already expired in 2016, was almost fully offset by
increased demand in promotion for municipal environmental protection
and climate change mitigation.

The priority area education and social development reached a
commitment volume of EUR 2.2 billion (2016: EUR 2.3 billion). The
number of promotional commitments rose to 100,291 (2016: 97,830),
with a particular increase in demand for the Federal Education and
Training Assistance.

In the area of global funding of the promotional institutions of
the federal states, a contract volume of EUR 3.9 billion (2016: EUR
4.4 billion) was concluded.

Individual financing of banks declined with commitments of EUR 0.9
billion (EUR 2.1 billion). This was partly due to a decline in the
refinancing provided by KfW for export financing of banks as a result
of the difficult situation in several important export countries.

International financing:

In the Export and project finance business sector, for which KfW
IPEX-Bank is responsible, new commitments added up to EUR 13.8
billion (2016: EUR 16.1 billion) in 2017, in a highly competitive
market environment. These commitments were often concluded in
syndication with other banks. The largest commitments came from the
Power, Renewables and Water sector department with EUR 2.6 billion,
of which a significant portion was accounted for by on- and offshore
wind farms. This underscores KfW IPEX-Bank's efforts to make a
significant contribution to environmental protection and climate
change mitigation.

The KfW Development Bank business area again increased its
commitments substantially. Last year, around EUR 8.2 billion in
financing was provided to developing countries and emerging economies
on behalf of the German Federal Government (2016: EUR 7.3 billion).
Around 55% of financing was earmarked for climate change mitigation
and environmental protection projects. Nearly 40% of all new
commitments account for development projects in Africa and the Middle
East; 65% of the federal budget funds is channeled to this region.

KfW Development Bank currently has 117 ongoing projects relating
to refugees in 28 different countries with an overall volume of over
EUR 3 billion. A total of EUR 1.2 billion of new commitments were
granted for refugee-related projects in 2017. The regional focus of
involvement is the Middle East

DEG had a successful financial year in 2017. It pledged about EUR
1.6 billion to finance investments by private companies in developing
and emerging countries, and thus continued the previous year's
positive figure (2016: EUR 1.6 billion). DEG achieved an increase in
risk capital financing in the form of investments and mezzanine
financing. At EUR 563.0 million, this was around 20% higher than the
previous year's figure. Financing for small and medium-sized
enterprises was once again a focus in 2017 with EUR 830 million.
Financing for German companies increased significantly to EUR 436
million.

By investing in securitisation transactions and green bonds, the
Financial markets business sector contributed a total of EUR 1.5
billion in 2017 (2016: EUR 1.3 billion) to the promotion of SMEs and
financing for climate change mitigation and environmental protection.
While around EUR 1.2 billion was invested in securitisation
transactions in 2017, a volume of EUR 1 billion is planned for SME
securitisation in Germany and Europe for 2018.

KfW supported climate action through its green bond portfolio in
2017, buying green bonds with a volume of around EUR 350 million. KfW
is planning to invest an additional amount of around EUR 300 million
in green bonds for 2018.

In order to fund its promotional business, KfW raised funds of EUR
78.2 billion in the international capital markets in 2017. A total of
145 bonds were issued in 10 currencies. Around 88% of the funds were
raised in the core currencies of euros and US dollars. Unlike in the
two previous years, the euro was the currency with the largest share
of the total funding volume in 2017. At around 53%, the EUR share was
at a multi-year high. As part of its green bond activities, KfW
issued green bonds in four different currencies (euro, US dollar,
British pound, Australian dollar) in a record volume of EUR 3.7
billion in 2017. This included the largest KfW Green Bond ever issued
with a volume of EUR 2 billion.

For 2018, KfW is planning a funding volume of EUR 70-75 billion.
With its established and sustainable issue strategy and an explicit
and direct guarantee from the German Federal Government, KfW
considers itself to be in an ideal position to achieve its planned
volume of funding.

Pressekontakt:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM), Wolfram Schweickhardt
Tel. +49 (0)69 7431 1778, Fax: +49 (0)69 7431 3266,
E-Mail: Wolfram.Schweickhardt@kfw.de, Internet: www.kfw.de

Original-Content von: KfW, übermittelt durch news aktuell