News from 2020-08-06 / KfW Development Bank
A green response to Corona
EU and KfW support fund for sustainable growth in the EU Neighbourhood

Small businesses in the EU's Eastern and Southern Neighbourhood countries that invest "green" receive support in the Corona crisis: energy efficiency, better use of resources and the use of renewable energies are promoted. KfW provides EU risk capital of EUR 75.5 million to the Green for Growth Fund (GGF).
The Corona crisis has also severely affected the EU's neighbouring countries. Companies have suffered substantial losses due to lockdown measures, especially in the area of catering and tourism. As a result, many households have lower incomes and jobs are at risk. Remittances from family members who work in the EU are also falling short. As a result, incomes have declined sharply, while expenditure on rent and living costs are ongoing. Risks for local businesses and banks have increased, and commercial finance is becoming scarcer and more expensive. At the same time, the EU's neighbouring countries have less financial capacity to deal effectively with the consequences of the Corona crisis. Lower tax revenues will further restrict state budgets.

In this situation, the EU has decided to help its neighbours. The reconstruction measures are intended to support sustainable goals. The Green for Growth Fund, which KfW helped to initiate, has been focusing on renewable energies and greater resource and energy efficiency since 2009. KfW is now providing the fund with additional EUR 75.5 million from EU funds in the form of risk capital and grants for complementary measures. This will mobilise a volume of more than EUR 1 billion for investments by private households, project investments and especially for small and medium-sized enterprises - from the Caucasus to Eastern Europe and North Africa. The funds are channeled to businesses and households through some 50 local financial institutions or made available for direct investments into eligible projects and businesses.
The GGF will deploy the EU capital in the target region on a revolving basis for 20 years. The aim is to support over 55,000 final borrowers there to save more than 5 gigawatt hours of energy and over 1,600 kilotonnes of carbon dioxide emissions per year. In view of the effects of the pandemic, households and companies will be particularly dependent on additional and/or more flexible financing in the coming months.
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