German Financial Cooperation with MENA
Focal Areas, Approaches and Examples
Practitioners’ Network for European Development Cooperation
Workshop on Cooperation in the MENA Region
Christoph Krieger, Principal Country Manager
Brussels, 25 October 2011
60 Years of KfW
Financing with a Public Mission
● Promotional bank of the Federal Republic of
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Germany
Founded in 1948 as
Kreditanstalt für Wiederaufbau
Shareholders: 80% Federal Republic,
20% federal states
Headquarters: Frankfurt am Main
Branches: Berlin and Bonn
Balance sheet total at end-2010: EUR 504
billion
4,600 employees (2010)
Best rating: AAA/Aaa/AAA
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A Bank with a Wide Array of Functions
Domestic promotional activities
Promotion of SMEs,
Promotion of
entrepreneurs,
housing,
education,
environmental and
climate protection infrastructure and
business start-ups social development
Financing of
municipal
infrastructure
projects and
promotion in
Europe
International
project and
export finance
Promotion of
developing and
transition countries
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Financing Instruments
Governmental Budget Funds
KfW Funds
100% Budget Funds
Development Loans
Grants
Composite financing
Loans IDA conditions
Reduced-interest loans
Promotional Loans
Loans standard FC conditions
LDCs = GDP p.c. < 900 USD
IDA = GDP p.c. < 1.735
other Developing Countries
Leveraging
limited budget funds
100% KfW-Risk
close to market conditions
Broader scope of action
for Cooperation with Developing Countries
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Team MENA at KfW Entwicklungsbank
Our Focal Areas
Board of
Managing Directors
Europe
Asia
Africa
MENA
Latin America
Environment and Climate
MENA
Sub-Saharan
Africa
Climate - Environment - Energy
Water Resources and Solid Waste
Education and Sustainable Economic Development
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German Development Cooperation with MENA
Priority and Partner Countries
Palestinian
Territories
 Priority Countries
 Partner Countries
 KfW-Offices
Lebanon
Syria
Tunisia
Iraq
Morocco
Egypt
Jordan
Yemen
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Focal Areas and Approaches
Water – Sanitation – Solid Waste
Challenges in MENA
 water stress, overexploitation of water resources and climate change
 insufficient urban water supply in parallel with strong urban growth
 water resources and health conditions endangered due to unsufficient sanitation and waste
disposal
Our Approaches:
 strengthen water supply efficiency through water loss reduction programmes
 improve access to adequate water supply and sanitation – urban and rural
 promote resource efficient irrigation in agriculture
Perspectives for Financial Cooperation:
 promoting Integrated Water Resource Management (IWRM) in MENA
 adaptation measures to tackle the consequences of climate change (sanitation, water resource
management)
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Focal Areas and Approaches
Environment – Climate Protection - Energy
Challenges in MENA:
 region is strongly affected by consequences of climate change
 heavy burden on urban areas by pollution of growing industries and thermic power plants
 high dependency on import of fossil fuels (Morocco, Tunisia)
 energy intensity higher-than-average
Our Approaches:
 utilise the enormous potential of Renewables in MENA (wind and solar power)
 promote energy efficiency – strongly neglected in the region
 promote industrial enviromental protection via national enviromental funds
 promote appropriate waste collection – important contribution to climate protection
 support public transport systems
Perspectives for Financial Cooperation:
 partnering the implementation of Mediterranean Solar Plan and the vision Desertec (Dii) – first
solar power plants under preparation in Morocco and Egypt
 exploring the scope of action for energy efficiency and how to kick-off investments
 initiate Recycling Management Systems - waste-to-energy
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Focal Area and Approaches
Education and Sustainable Economic Development
Challenges:
 high population growth, a young population two-thirds younger than 30) high illiteracy rates (in
particular: Morocco, Yemen, Egypt)
 low GDP-growth per capita; many jobs in low productivity areas, unsufficient qualification, high
unemployment in particular young adults (one of main reasons for Arab Spring)
 conflictive region, high frequency of crisis, unsufficient rule of law, fragile states, missing
economic and social opportunities lead to pressure on migration and lack of perspectives
Approaches:
 promote education on all four levels
 on the supply side: access and quality - on the demand side: Financing Eduation
 promote strong and diverse national financial systems to enable development oriented capital
flows
 promote Municipal Financing Systems – establishing systems of financial equalisation between
municipalities
Perspectives for Financial Cooperation:
 creation of SANAD: the MENA Fund for Micro-, Small and Medium Enterprises
 developing approaches for Financing Education in MENA
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Portfolio
Commitments per Country (Million Euro)
Lebanon 46
Palestinian
Territories 436
Syria 133
Morocco 439
Tunisia 375
Jordan 281
Regional 20
Yemen 277
Iraq 3
Egypt 1.228
Total: 3.238 Million Euro
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Portfolio
Commitments per Sector (Million EUR)
Other
88
Democracy and
Peacebuilding
114
Energy and
Enviroment
765
Water and Sewerage
1.844
Sustainable
Economic
Development
173
Education
254
Gesamt: 3.238 Mio. Euro
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Wind Energy Morocco
Tapping Own Resources
Problem
 fast growing energy demand
 very limited proper energy resources
 Morocco‘s high dependency on imported fossil fuels
Approach
 utilise the first-class wind power potential
 finance new wind power plants
 generate more than 500 GWh/annually
Impact
 provision of environmental friendly energy and sustainable utilisation of natural resources
 electricity generation for 2 million inhabitants – private households
 saving around 340.000 t CO2
 reducing Morrocco‘s expenditures on fossil fuel imports
Contribution
 Wind Park Tanger (140MW): 50 m EUR (FC-Loan)
 Wind Park Essaouira (60MW): 50 m EUR (FC-Loan)
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Education Programme Palestinian Territories
Combined Forces for Better Education
 Problem
 high illiteracy rates, high unemployment rates
 insufficient quality in education
 the multitude of active donors in the field of education is a challenge for budgetary planning
 Approach
 joint donor mechanism to coordinate the implementation of the national education strategy
 learner-friendly enviromments in schools, innovative and adapted infrastructure build with labour-
intensive measures to generate incomes
Impact
 higher level of quality in education
 reduction of administrative costs
 strengthening the Ministry for Education
Costs and Contribution
 total costs: 419 m EUR
 FC-Contribution: 77 m EUR (grant)
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Improved Water and Wastewater Services Programme (IWSP)
Protecting Health and Environment in Egypt
Problem
 health and environmental risks due to insufficient water
supply and waste water systems
 high necessity for investments in infrastructure
 water utilities lack capacity
Approach
 investments to rehabilitate, expand and construct
water and waster water treatment plants
 accompanying measures to support water utilities
 NIF – joint financing mechanism (EU, AFD, EIB, FC),
KfW as the lead financier
Impact
 sustainable improvement of the water supply and waster water systems in the Niledelta
 improvement of the utilities‘ performance and its staff capacities
 support for sector reforms programme management
Contribution
 61 m EUR (loan) for investments and 8,3 m EUR (grant) to support the water utilities
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Water Resource Management in Jordan
Recycling Water Resources with Multiple Use
Problem
 extreme and increasing water shortages
 overexploitation of water resources
 high population growth
Approach
 Re-use of treated waste water for irrigation in
agriculture
 Re-use of irrigation water for drinking water
 electricity generation from gravity pipes
Impact
 20 liter drinking water daily extra for each inhabitant of Amman
 electricity for 10.000-15.000 households
 Irrigation in the Jordan Valley to be ensured
Contribution
 investment costs for Re-use components: 22,5 m EUR (FC development loan)
 Re-use components are part of a broader Water Resource Management Programm
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Regional Fund SANAD
Access to Finance for Small and Medium Enterprises
Problem
 commercial banks avoid financing for micro, small and medium
enterprises (MSME)
 despite liquidity in the market, finance for MSMEs hard to obtain
 MSME account for around 70% of employment in MENA
Approach: establishing a Fund…
 to combine public and private investors
 to disburse loans, guarantees and equity
 open to (micro-) finance institutes of all MENA countries
 managed by a private consultant
Impact
 mobilisation of private liquidity
 improving access to finance for local enterprises
Contribution
 expected: 20 m EUR (grants) + 10 m EUR equity share; assumed fund volume in 5 years 75100 m EUR
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Thank You for Your Attention…
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Contact in Frankfurt
September 2011
L II c
Wolfgang Reuß
(3593)
First Vice President
Director MENA
Offíce: Susanne Reinhardt (2119) / Fax (3279)
Office L2c3/4/5: Michaela Lessmann (8903)
L2c1
Country Team
L2c2
KC Water Near East
L2c3
Education and Sustainable
Economic Development
L2c4
Water North Africa
L2c5
Climate and Environment
André Ahlert (2155)
Egypt
Stefan Zeeb (2584)
Babette Stein v. Kamienski
(3705)
Dr. Jörg Dux (1926)
Kurt Hildebrand (2890)
Sylvia Paschke
(4077)
Jordan, Palestinian Territories,
Israel
n
Christoph Krieger (2405)
Tunisia, Morocco, Algeria
Alexander v. Kap-herr (9355)
Syria, Yemen
Moritz Remé
Lebanon, Iraq
Manuel Schiffler
(4325)
Dr. Stefan Gramel
(4845)
Alexander Grieb
(4732)
Wolfgang Pfaff-Simoneit
(4145)
Sebastian Jacobi
(1672)
Theodor Dickmann (2068)
Olaf Goerke
(9356)
Dr. Konar Motafoglu (9942)
Gerald Scholz
(2969)
Mandana Bahrinipour
Frank Determann
Eberhard Knapp, ext.
Cornelia Penzel
Bettina Zoch
Matthias Zilbauer
Jan Wiegelmann
(9028)
(3583)
(2659)
(3952)
(9003)
(4727)
(9556)
(4189)
Ditlinde von Davidson
(2418)
Bruno Schoen
(2310)
Thomas Linsenbold(2787)
Reinhard Schmidt (2131)
Gert Strübing, ext. (4635)
Thorsten Waibel (3934)
Gunter Walter
(3143)
Dr. Bernd Wiebusch(2633)
Claudia Bürkin (Cairo Office)
(*7511)
Tatjana Bruns
(3474)
Bernd Hasel
(2593)
Wolf Muth
(4788)
Thomas Prien
(9807)
Christoph Twerenbold (Rabat
Office)
(1701)
Bernhard Schenk, ext. (4108)
Verena Willand (4442)
Helmut Asam
(9110)
Katharina Brinkmann (3350)
Susanne Schröder (3751)
Contracts:
Julien LeChuiton
(8456)
E-mail: Firstname.Surname@kfw.de
Tel/Fax: +49-69-7431-xxxx
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Contact in MENA
Tunisia
Markus Schlömann
Local Representative
Tunis
Tel.: 00216-28 770 128
E-mail:
markus.schloemann@kfw.de
Palestinian Territories
Director:
Marc Engelhardt
German House
Abdullah Joudah Street
Bldg. 35,
Al Bireh, Palästina
Tel. 00972-2240-0730
Fax: 00972-2240-0731
E-mail: kfw.albireh@kfw.de
Palestinian
Territories
Tunisia
Lebanon
Daniel Neuwirth
Programme Coordinator
Hamra Gefinor Centre
Block D, Office 401/3,
Clemenceau Street, Beirut,
Libanon
Tel. 00961-1740-304
Fax: 00961-1740-304
E-mail:
Daniel.Neuwirth_extern@kfw.de
Iraq
Morocco
Jordan
Director:
Bettina Tewinkel
Mohammed Baseem AlKhammasch Street No 13
P.O. Box 926 238
Sweifieh, Amman
11190 Jordan
E-mail: kfw.amman@kfw.de
Egypt
Morocco
Director:
Silke Stadtmann
2, Avenue Tour Hassan
10020 Rabat/Marokko
Tel. 00212-3770-9893
Fax: 00212-3770-9315
E-mail :
kfw.rabat@kfw.de
Syria
Director:
N.N.
German House
Al Mehdi Ben Barakeh Street
26
Damskus, Syrien
Tel. 00963-11-3318-124
Fax: 00963-11-3318-126
E-mail: kfw.damaskus@kfw.de
Yemen
Egypt
Director:
Dr. Jens Mackensen
4 D, Al Gezira Streed
(3rd Floor)
Zamalek 11211, Kairo
Tel.: 00202-2736-9525
Fax: 00202-2736-3702
E-mail: kfw.cairo@kfw.de
Yemen
Director:
Bernd Schönewald
Hadda Area, Street No. 21,
Villa No. 19
Sana´a, Jemen
Tel.: 00967-1426-352
Fax: 00967-1426-350
E-mail: kfw.sanaa@kfw.de
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