KfW Development Bank
KfW Development Bank has been helping the German Federal Government to achieve its goals in development policy and international development cooperation for more than 60 years. KfW Development Bank finances and supports programmes and projects that mainly involve public sector players in developing countries and emerging economies – from their conception and execution to monitoring their success. KfW’s goal is to help partner countries fight poverty, maintain peace, protect both the environment and the climate and shape globalisation in an appropriate way.
KfW Development Bank's support is adapted to the various requirements and conditions in the respective partner country. The funding model opted for depends on the size of a country's debt, its economic output and level of development, the performance capacity of the project partner as well as the type of project.
Germany is strongly committed to the conservation of biological diversity and is now one of the world's largest donors through KfW, among others. It takes care to include indigenous peoples and local communities (IPLC), as their livelihoods depend heavily on nature. In 2022, the commitment volume for KfW projects that contribute to achieving SDG 15 (Life on Land) was around EUR 831 million.
KfW is undertaking major forest conservation efforts on behalf of the German Federal Government and has a diverse portfolio funded to the tune of more than EUR 2.6 billion. This includes various project types such as sustainable forest management, forest conservation, forest and landscape restoration, forest protection as climate action and the promotion of zero-deforestation supply chains.
Financing Instrument: Grants, development loans, promotional loans
Project scale: KfW is promoting more than 300 projects related to biodiversity conservation, in 60 countries and regions. Recent grants provided by KfW for forest conservation range from EUR 6 million to 48 million.
Recipient countries regions/country groups: Global
Recipient categories: Governments
KfW Development Bank partners range from emerging markets, low and middle income countries to Least Developed Countries and countries in conflict. Grants funded from the German Federal Government's budget are mainly allocated to poor and poorly developed countries. The funds are not repaid.
In the case of development loans, KfW combines budget funds from the Federal Government with own funds that it raises at favourable terms on the capital market. They are generally structured as reduced-interest loans.
Promotional loans are loans to partners in developing countries and emerging economies commissioned by the Government that are 100 % funded by KfW on the capital market. The loans are deployed for projects that are effective when it comes to development policy and viable in economic terms for which, however, funding is not available from the commercial banking sector (e. g. due to long financing terms required).
The projects and programmes promoted by KfW Development Bank are proposed by governments of the partner countries; the respective country's development strategies and structures form the basis. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development, KfW checks whether the projects and programmes are sound in terms of their developmental effects and eligible for promotion. If so, KfW's experts assist the partners in any way they can and support the projects throughout their entire duration.
The Financial Cooperation (FC) implemented by the KfW Development Bank is guided by the country strategies developed by the Federal Ministry for Economic Cooperation and Development and the development strategies created by the partner country. The promoted projects and programmes are proposed during bilateral government negotiations and the German Federal Government decides about the maximum amout of financial funds to be committed. An intergovernmental agreement is generally concluded on this matter.
Last updated: 29 August 2023