India

India needs energy, in fact far more than it currently produces. Around a tenth of today's energy requirements are not met. And that at a time when the economy and population are expanding. The huge power outage in July 2012, during which over 600 million people – a tenth of the world's population – were forced to manage without electricity for hours, illustrates in a very dramatic way something which is a daily problem in India. At the same time, the Indian energy sector is an enormous burden on the environment and climate. Around two thirds of energy comes from fossil fuels, especially coal. The majority of the power stations are also outdated, inefficient and emit a disproportionate amount of greenhouse gases and other pollutants.

To bridge these energy gaps, and at the same time enable further climate-friendly growth, the Indian government has begun to increase significantly its investments in renewable energies. By 2022, an additional 175,000 MW of energy are to be generated by biomass, solar and wind sources. The Indo-German Solar Partnership which was agreed between President Narendra Modi and Chancellor Angela Merkel in 2015 shall contribute to this by providing investments of one billion Euros for solar parks and rooftop solar generation. To facilitate the integration of renewable energies into the power grid, KfW is further supporting the connection of solar, wind and hydropower generation facilities to the Indian grid. Iin this endeavour KfW provides concessionary financing of more than one billion euros for the Indo-German flagship project "Green Energy Corridors". To also reduce the power consumption, it is supporting Indian companies and households to increase energy efficiency in production processes and in residential buildings, and to reduce power losses.

Project example - Solar power

India's economy is growing at a tremendous rate. Yet hundreds of millions of people still live in poverty. There are no suitable jobs which could offer them an income and prospects for the future. In rural areas the situation is worse than in the cities. Inefficient farming using inadequate equipment on very small areas is often the only possible livelihood. Small and medium-sized enterprises in particular have great potential to create additional jobs in the cities and in the country. Yet even though these businesses account for almost half of today's industrial production and provide work for millions of people, Indian banks are very reserved when it comes to extending investment capital.

KfW Development Bank is focusing on this area together with its Indian partners: tailor-made business models are being created in conjunction with specialised state promotional institutions for promoting small industry and agriculture. These institutions are providing micro, small and medium-sized enterprises with the capital necessary to expand and launch innovative products or efficient production methods. Additionally, KfW is, among other things, an investor in India's first provider of micro pensions. This organisation offers unique services for long-term pension provision for the poorer population. Indeed, until now, households on low incomes have barely had any opportunity to save on a consistent basis. Banks' products and services only catered for wealthy clients.

Polluted air for breathing, unclean drinking water and added to that disastrous sanitary conditions and the daily traffic gridlock – life in India's cities is becoming harder, as well as more cramped. In over 50 urban conurbations the number of inhabitants has passed the one million mark. Whether it is electricity, water, waste disposal or medical services, today's infrastructure is already at breaking point. At the same time, another quarter of a billion people will relocate to the cities over the next 20 years. In order to secure livelihoods for the generations of today and tomorrow, India has to meet the challenge of this rapid urbanisation process and also prepare itself for the consequences of climate change. The Smart City Programme thus is a top priority of the Indian Government. It shall support 100 Indian cities in the implementation of sustainable urban concepts. KfW is contributing to this by providing concessional financing in particular for urban mobility and for water and wastewater management.

Project example - Municipal development

Project example - Energy efficiency

KfW together with Indian federal states, promotional banks and non-governmental organisations is supporting resource-friendly processes in rural communities. Model projects with sustainable concepts and modern technologies with a role-model character for the whole country are being promoted. And the environment is not the only beneficiary. It also directly benefits people, for example, yields of important crops were, in part, more than doubled in the project areas. Experiences such as these are continually being utilised as multipliers. For instance, KfW, along with several federal states, is currently preparing new programmes for adjusting to climate change in the particularly sensitive Himalaya region.