KfW Development Bank
Promoting Energy Efficiency in Buildings
Claudia Loy
Asia Pacific Union for Housing Finance
New Delhi, 31 January 2012
Agenda
1
KfW at a Glance
2
The German Way
3
The International Perspective
India – Energy Efficiency in New Residential Housing
Southeast Europe – Promoting EE in SME and Housing
China – Energy Efficient Refurbishment of Residential Housing
2
KfW
Public Promotional Bank with Wide Array of Functions
Domestic Promotion
We promote Germany
International Business
We ensure internationalisation
Financing of
Promotion of
municipal
SMEs,
Promotion of infrastructur
business
International
e projects
housing and
start-ups and
project and
and
education
environexport finance
promotion in
mental &
Europe
climate
protection
Promotion of Environmental and Climate Protection
We promote
development
Promotion of
developing and
transition
countries
3
KfW
A Strong Environmental and Climate Protection Bank
Commitments in 2010:
EUR 25,3 billion
for environmental and climate protection
EUR 23 billion
for energy efficiency (EUR 11.5 bn)
and renewable energies (EUR 11.3 bn)
► KfW is the no. 1 Environmental Bank in
Germany and one of the world’s leading
financing institutions for EE and RE
4
Agenda
1
KfW at a Glance
2
The German Way
3
The International Perspective
India – Energy Efficiency in New Residential Housing
Southeast Europe – Promoting EE in SME and Housing
China – Energy Efficient Refurbishment of Residential Housing
5
System of Energy Efficiency Promotion
Information and
Consulting
Promotional
Programmes
Legislation, Rules and Regulations, Technical Standards
► German Energy Conservation Ordinance (EnEV)
6
One of the essential elements for promoting
EE in Housing
Making energy demand transparent!
"KfW-Efficiency House" –
the performance standard for buildings
in Germany!
7
KfW Efficiency House Standard
Primary Energy
Demand (kWh/m2/a)*
e.g. 108-63
KfW-115
e.g. 94-55
KfW-100
= 115 % of NL**
= 100% of NL
e.g. 80-47
KfW-85
e.g. 66-39
KfW-70
= 70 % of NL
e.g. 52-30
KfW-55
= 55 % of NL
e.g. 38-22
KfW-40
= 85 % of NL
= 40 % of NL
N
E
W
B
U
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D
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G
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*Acctual values vary, depending on the reference building according to the German Energy Conservation
Ordinance (EnCO)
**NL = New Building Level according EnCO
B
U
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L
D
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G
S
T
O
C
K
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Promoting EE in housing – KfW in Germany
Funding and On-lending system
Capital
market
Loan (maturity
e.g. 30 years)
Loan (maturity
e.g. 30 years)
Funding
Individual
homeowner
Bank
Interest
subsidy
German
Government
Refinancing
Margin
for credit
risk and
handling
0.75%
Interest rate
depending on
efficiency
standard
9
Promoting EE in housing – KfW in Germany
Results
Year
Budget
Loan
Subsidies Commitments
CO2reduction
Housing
Units
(million €)
(1000 tons p.a.)
(in 1000)
(million €)
Investments
(million €)
2007
850
3,336
568
204
5,127
2008
1,300
5,127
767
280
8,552
2009
2,035
8,677
1,452
617
17,724
2010
1,337
8,746
1,049
953
21,330
10
Key Elements of Success
● Financial incentives based on energy performance of building -
not individual measures
● Performance Assessment Tool robust and easy to handle
● Accepted Performance Standards or Label - more important
than legal building codes
● Training of auditors
● High energy prices
11
THANK YOU!
For more information, please contact:
Claudia Loy,
Head of Energy Sector and Policy Division
Silke Hermes,
Senior Project Manager
KfW Development Bank,
Energy - Asia,
silke.hermes@kfw.de
+49 69 7431 9786
KfW Office Building “Westarkade”,
Electricity Consumption: 98 kWh/p.sqm/p.a.
12
Agenda
1
KfW at a Glance
2
The German Way
3
The International Perspective
India – Energy Efficiency in New Residential Housing
Southeast Europe – Promoting EE in SME and Housing
China – Energy Efficient Refurbishment of Residential Housing
13
Promoting EE Buildings in India
Results-based Tool and Label
Joint Assessment Tool developed by
Fraunhofer Institute and TERI, India
- Based on the whole-building-approach
(Flexibility)
- Robust energy performance assessment
(Comparability)
- Easy to use by architects and auditors
(Scalability)
- Easy to compare different EE design,
material and technology combinations
(Optimization)
- Basis for Energy Efficiency Label
(Communication)
14
Agenda
1
KfW at a Glance
2
The German Way
3
The International Perspective
India – Energy Efficiency in New Residential Housing
Southeast Europe – Promoting EE in SME and Housing
China – Energy Efficient Refurbishment of Residential Housing
15
South East Europe
Promotion of EE in SME and Housing
Key Features:
 EE loan programmes for SMEs & Housing via various partner banks
Average loan size: EUR 115,000 (SME), EUR 2,200 (Housing)
 No/ only slightly reduced interest rates
Total loan volume: EUR 215 million (2010)
Additional TA for Capacity Building & co-finance of energy audits
 target: minimum of 20% savings on energy
Typical Measures for Energy Efficiency in Residential Buildings:
● High-performance windows;
● Installation of thermostatic valves; etc.
● Insulation of walls, roof and basement ceilings and pipe
● Modernization of hot water boilers and meters, heat systems;
16
Agenda
1
KfW at a Glance
2
The German Way
3
The International Perspective
India – Energy Efficiency in New Residential Housing
Southeast Europe – Promoting EE in SME and Housing
China – Energy Efficient Refurbishment of Residential Housing
17
China
Energy Efficient Refurbishment of Housing Blocks
Starting Point: GiZ Pilot Scheme
3 pilot buildings in Tangshan (2006 – 2009)
● 30-50% reduction of energy demand for heating
by thermal insulation of walls and roofs, double-glazed windows,
refurbishment of heating systems
Current stage:
KfW Program Climate Protection in Urban Areas
2010-2012
 Tangshan: Volume: € 23.64 m, refurbishment of 800,000 m²
 Tonghua: Volume: € 36.36 m, refurbishment of 1,100,000 m²
● Aim: 50-60% reduction of energy demand for heating
● CO2 Reduction of 0,32 m tons per year
● agreement on high efficiency standards
● Choice of most cost-effective measures
Know-how transfer & quality control during planning and
implementation
Before refurbishment
355 kWh/m²y
After refurbishment
144 kWh/m²y
18
KfW Development Bank
Promoting EE in Buildings Worldwide - Examples
Housing
Public Buildings
Southeast Europe
South Africa
EUR 30 million
EUR 50 million
Commercial Buildings
China
EUR 20 million
India
India
EUR 50 million
EUR 50 million
China
EUR 60 million
(in planning)
Turkey
EUR 30 million
Jordan
EUR 34 million
Southeast Europe
EUR 35 million
Mexico
Albania
EUR 85 million (in planning)
Croatia
Turkey
EUR 25 million
(in planning)
Global: EUR 290 million
Global: EUR 150 million
Global: 150 million
19
Back-up
20
KfW
Financing with a public mission
● Founded in 1948 as promotional bank of
the Federal Republic of Germany
● Shareholders: 80% Federal Republic,
20% federal states
● Headquarter: Frankfurt am Main
Branches: Berlin and Bonn
● Representative offices: around 70 offices
and representations worldwide
● Balance sheet total at the end of 2010:
EUR 450 billion
● About 4,530 employees (2010)
● Top rating: AAA/Aaa/AAA
● Zero-weight under Basel II
21
KfW Development Bank
Global Energy Sector Commitments 2006 - 2010
Total Commitments in the Energy Sector (cumulative 2006-2010):
of which renewable energy:
Other renewable
generation 30%
Electrical
transmission/
distribution
23%
Other renewable
(CTF): 12%
Power nonrenewable 2%
Energy
policy/Energy
efficiency 8%
EUR 3,739 million
EUR 2,281 million
Gas distribution
3%
Coal-fired power
plants 3%
Hydro-electric
power plants
8%
Biomass 1%
Wind power 9%
Solar energy 1%
Commitments for Demand-Side Energy Efficiency since 2006:
Asia
Europe/Caucasus
Latin America
CRS categorisation
31 %
27 %
23 %
22
Promoting EE Buildings in India
Energy Efficient New Housing Programme
Loan (Eur 50 million) and Technical Assistance (EUR 1.5 million)
to the National Housing Bank (NHB) as apex bank to
refinance sub-loans for buyers of energy efficient new urban apartments
● Highest energy savings potential in new apartment blocks for middle
income residents: 46-51% depending on climate zone - out of which
► 20-36% Building Envelope
► 16-22% Appliances
● Investments to achieve up to 40% savings financially attractive at 5 yr.
payback (Average FIRR 25%)
● Preconditions for feasibility:
- optimization of whole building design at planning stage
- early contact to advise architects/developers
- robust energy performance assessment tool
- training of auditors and energy advisors
23
Promoting EE Buildings in India
Promotional Programme Status
● Early stage of implementation: Agreements signed 12/2010, first
disbursement 07/2011, TA tender ongoing
● Five residential housing developments located in the composite
climate zone being evaluated:
● 23 individual buildings assessed and optimized with the
Fraunhofer/TERI assessment tool
● Energy efficiency certificates under preparation by TERI:
● Covering 17,000 apartment units to be built in the next 5 yrs with
● Savings of up to 2000 kwh p.a. per apartment; and
● Expected total savings of 22,000 tCO2 p.a.
● Fraunhofer/TERI tool is being amended for the hot-dry and warm-humid
climate zones (by November 2011)
24
Promoting EE Buildings in India
Promotional Programme – Next Steps & Challenges
Next steps under the Programme TA:
● Establish the „Energy Efficient Housing“ brand and label in the Indian
market
● Train energy auditors and architects in the energy assessment of new
residential buildings with the Fraunhofer/TERI tool
● Achieve EE assessment and certification endorsement by public and
private institutions
Continuous Challenges to the Promotional Programme:
● No mandatory minimum EE standard for residential buildings
● Multiple ministries and public agencies dealing with the residential
building sector
● Lack of sustainable financial incentives to promote EE residential
buildings
25
Apartment Developer Website
26
Pre-Constructed Housing Company Website
27
Construction Material & Pre-Constructed
Housing Company Advertisement
28
Real Estate Agent Advertisement
29
Energy Efficiency House Label
30