DEG

DEG - Deutsche Investitions und Entwicklungsgesellschaft mbH is a subsidiary of KfW Banking Group active in developing markets. DEG provides financing and advice to private companies and financial service providers operating in developing countries and emerging economies. 

Before committing any funds, DEG carries out careful environmental and social due diligence. Taken as the benchmark here are the current IFC Performance Standards of the International Finance Corporation, the international standard for environmental and social aspects of private sector investment. In certain cases, financing by DEG is excluded from the outset. These include undertakings that involve forced or child labour or destruction of high conversation value areas. These activities and areas are summarised in a publicly accessible exclusion list (https://www.deginvest.de/DEG-Englische-Dokumente/About-DEG/Our-Mandate/EDFI_DEG_Exclusion-List_en.pdf).

DEG’s customers are mainly based in developing and emerging-market countries as well as in Germany and other industrialised nations.

DEG provides finance and advice to:

• private-sector companies that invest in sustainable infrastructure projects in developing and emerging-market countries, particularly renewable energy, telecommunications, transport infrastructure, and utilities and waste disposal,
• companies from the industrial, commercial and services sector in developing and emerging-market countries, as well as investment vehicles that provide equity finance to private companies in these countries,
• banks, financial institutions and specialist funders that provide reliable access to financing, particularly for small and medium-sized enterprises in developing countries.

DEG offers its customers long-term financing, various promotional programmes and advisory services. The companies it promotes create qualified jobs and income, ensure economic growth, local value creation and know-how transfer. 

Since 2022, DEG has been focusing its work even more purposefully on further enhancing the positive development impact of its customers on society and the environment; reducing greenhouse gas emissions in line with the Paris Agreement’s 1.5 C goal in order to make DEG’s portfolio climate neutral by 2040 and help customers with their transformation in order to build their resilience and achieve greater development impact. In this context, DEG is building a diverse portfolio of afforestation and reforestation investments according to internationally recognised standards.

Financing Instrument: Long-term loans, mezzanine finance, equity investments, bonds, technical assistance

Project scale: 

At EUR 609 million, more than one third of DEG’s new commitments in 2022 were earmarked for projects promoting climate action and environmental protection. Climate action investments accounted for EUR 316 million of this, which equates to an increase of more than 60 percent.

As of 2023 there were only few investments in afforestation and reforestation and they ranged from EUR 7.5 million to 25 million.

Recipient countries regions/country groups: Global / developing markets

Recipient categories: Enterprises, Private equity funds, Financial institutions

Eligibility Criteria: 

DEG provides banks and finance institutions in developing or emerging country markets with the capital they need in order to grant loans to local businesses. Companies in the manufacturing, trade and service industries in developing markets can benefit from tailor-made solutions: loans or equity investments plus individual advice. DEG also invests in private equity companies that provide equity financing to such companies. 

Application guidelines: 

Companies interested in what DEG has to offer can fill out the contact form https://www.deginvest.de/Formulare/DEG-Kontakt/contact-form_all.html