AN INITATIVE OF
KfW (credit institution for reconstruction) Bank was established in 1948 and is a public bank 80 per cent owned by the national Government of Germany and 20 per cent by the German Länder (regional governments). It does not take customer deposits, rather it raises funds almost entirely via international capital markets. In 2019 KfW raised EUR 80.6 billion from these to finance its activities.
As a public development bank, KfW has a broad mandate to finance and promote sustainable development. Consequently, it is involved in lending for green energy, technological innovation, start-up businesses, public and social infrastructure, education, and numerous other areas. Furthermore, unusually among special-purpose financial intermediaries, its activities are not confined to Germany. Its development banking arm funds projects in developing countries on behalf of the German Government.
The KfW Bank also lends extensively for affordable housing and to improve housing sustainability. It finances home purchase and construction loans, and home renovation and energy upgrading loans for individual households. It also loans to private, public, and non-profit organizations for the construction of new energy-efficient homes, the energy-efficient refurbishment of older residential buildings, and the creation of accessible housing.
In addition to its important work in raising finance for the projects it funds, the KfW Bank also has significant technical expertise on the design and implementation of these projects, informed by a comprehensive and sophisticated ongoing programme of project evaluation and research.[1]
As a result, the bank also plays an important role in informing government policy on priorities for social, economic, as well as environmental investment and international development, thereby shaping policy reform[2].
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[1] For more information on the scope of work of KFW contributing to sustainable development, see https://www.centreforpublicimpact.org/case-study/kfw-development-bank/
[2] Ulf Moslener, Matthais Thiemann and Peter Volberding, “National Development Banks as Active Financiers The Case of KfW”, in The Future of National Development Banks, Stephany Griffith-Jones and Jose Antonio Ocampo, eds. (Oxford, Oxford University Press, 2018), pp. 198-230.
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https://www.kfw.de/