How to finance your project? Principles, Procedures and Objectives of German Financial Co-operation Klaus Gihr Head of Sector Policy Division Energy, Water and Agriculture KfW Frankfurt Institut für Angewandtes Schadstoffmanagement November 5, 2014 Bank aus Verantwortung
Outline 1 KfW Development Bank Why we support solid waste management 2 KfW Development Bank Who we are 3 KfW Development Bank The principles of our work 4 KfW Development Bank How we support projects 2
Why we support solid waste management Bank aus Verantwortung
Why Solid Waste Management? Climate Protection Generation of Energy and Resources Economic Development Urban Development and Habitat Environmental Protection Public Health 4
Why is Solid Waste Management so important for KfW? Significant employment opportunities for unskilled employees (informal sector). Largest cost factor for most municipal budgets in developing countries. Core environmental problem in many regions. Third largest potential to reduce greenhouse gases (after energy & forest protection). Many linkages to other priority sectors (focal areas) of German Development Cooperation. Increasing demand from partner countries. Global trends: Population growth. Urbanization. Resource scarcity. 5
Portfolio of German Financial Cooperation (1) Implementation Preparation Waste component: Implementation Waste component: Preparation Completed Albania Serbia Russia Turkey Georgia Armenia Azerbaijan China Morocco Tunisia Vietnam El Salvador Peru Liberia Egypt Jordan Palestinian Territories India Philippines Chile Ethiopia Indonesia South Africa 6
Portfolio of German Financial Cooperation (2) 12 Projektanzahl und FZ-Mittel nach CRS-Code Current Portfolio: 427 Mio. EUR 140 10 120 Number of projects 8 100 80 FC funds [Mio. EUR] 6 60 4 40 2 20 0 Waste Waste-/Water Urbanization Others 0 FC-Instruments: - grant (16 projects/ 2 in prep.) - development loans (22 projects/ 9 in prep.) - promotional/comercial loans (5 projects) 7
KfW Development Bank Who We Are Bank aus Verantwortung
More than 60 years of KfW Financing with a public mission Promotional bank of the Federal Republic of Germany Founded in 1948 as Kreditanstalt für Wiederaufbau Shareholders: 80% Federal Republic, 20% federal states Headquarters: Frankfurt am Main Branches: Berlin, Bonn and Cologne Representative offices: around 70 offices and representations worldwide Balance sheet total as at September 2012: EUR 517.9 billion Financing volume 2012: EUR 73.4 billion 5,440 employees (2012) Best rating: AAA/Aaa/AAA 9
A bank with a wide array of functions Domestic promotion International business We promote Germany We ensure internationalisation We promote development Business Area Mittelstandsbank Promotion SMEs, business founders, start-ups Business Area Privatkundenbank Promotion construction of new housing and modernisation as well as education Business Area Kommunalbank Financing municipal infrastructure projects and global loans Germany/Europe agency business for Federal Government Business Area Export and Project Finance International project and export finance Business Area Promotion of Developing and Transition Countries Promotion of developing and transition countries Promotion of environmental and climate protection 10
Implementing Institutions of German Development Cooperation Political framework and financing: BMZ, BMF, BMU, AA and others Implementation Development Bank Financial Cooperation Task: Promote reform processes and public investment Corporate Financing Task: Financing of private investment in developing and industrializing countries Technical Cooperation and Personnel Support Task: Enhancing the capabilities of people and organizations Provision of capital Complementary advisory services Cooperation with state and state-guaranteed private institutions Provision of capital Establishment and expansion of private business structures Provision of expertise 11
Locations KfW Development Bank and DEG Moskau Mexiko-Stadt Tegucigalpa Guatemala-Stadt San Salvador Managua Bogotá Quito Dakar Kiew Belgrad Sarajevo Priština Tiflis Ulan Bator Taschkent Podgorica Istanbul Baku Bishkek Beijing Tirana Ankara Dushanbe Skopje Jerewan Tunis Rabat Ramallah-Al-Bireh Damaskus Kabul Amman Islamabad Kathmandu Neu-Delhi Kairo Abu Dhabi Dhaka Hanoi Mumbai Vientiane Bamako Niamey Sana a Bangkok Ouagadougou Phnom Phen Accra Cotonou Juba Addis Abeba Kampala Jaunde Kigali Nairobi Kinshasa Daressalam Jakarta Manila Lima La Paz Brasilia São Paulo Windhoek Lusaka Pretoria Lilongwe Maputo Johannesburg January 2013 12
KfW Development Bank How We Work We advise the German Government and our partners on development policy issues and on implementing their country and priority area strategies. We participate in the selection, preparation and appraisal of projects. We assist our partners in the implementation of their projects and programmes. We share responsibility for their developmental success. We supervise the effective and efficient use of the funds provided. 13
KfW Development Bank The Principles of our Work Thema der Präsentation / Ort / Datum [TT. Monat Jahr] 14
Keeping an Eye on the Impacts Means... Partner Orientation / Partner Responsibility The responsibility for the programmes always stays with our local partners KfW uses the partner systems (financial and procurement systems) Financial Cooperation is not tied to German supplies Combining forces / sharing tasks through Donor coordination e.g. in joint EU platforms - Infrastructure Trust Fund for Africa, Neighbourhood Investment Facility, etc... - European Financing Partners (coalition of European private-sector development financiers) Mutual recognition of procedures (Mutual Reliance Initiative AfD-EIB-KFW) Networking with other institutions (practitioner network for European Development Cooperation) Participation in multilateral initiatives (such as Infrastructure crisis) Programme-based approaches rather than "projectitis" Facility, Microfinance Enhancement Facility, Green Technology Fund 15
Financing instruments of KfW Development Bank 2012 Tailor-made Financings for every Partner Country Financial Cooperation (FC) (4.729 Million EUR) Budget Funds 2012: 1.639 Mio. EUR KfW Funds 2012: 3.090 Mio. EUR Concessional Finance 1 Budget Funds only 2 FC-Development Loans: 3 FC-Promotional Loans: 1.526 Mio. EUR Budget Funds: 113 Mio. EUR KfW Funds: 1.487 Mio. EUR 1.603 Mio. EUR Hint: Numbers without mandates (2012: EUR 187 m.) 16
KfW Development Bank How We Support Projects Thema der Präsentation / Ort / Datum [TT. Monat Jahr] 17
Framework of FC Projects From Intergovernmental Agreement to Project Implementation BMZ Intergovernmental Agreement Partner country Public funds guidelines and political On-lending or Grant Agreements KfW Financing/Loan Agreement Project executing agency Project monitoring, Evaluation Supply and Service Contracts Consultant/Engineer Supervision Contractor 18
The Project Cycle From the Idea to Operation Programme cycle Reform programme of partner country Country strategy/ Priority area strategy Programme preparation Project appraisal Financing agreement Programme implementation Evaluation The role of KfW To listen and to advise Support BMZ, Coordinate with GIZ Identify programmes, finance feasibility studies Programme appraisal, (programme proposal) Contract negotiations, definition of implementation agreement Progress reviews, tenders, advise executing agencies Final follow-up, ex-post evaluation Strategic direction Inspection Significant part of our work 19
We will be happy to assist you KfW Development Bank Palmengartenstrasse 5 9 60325 Frankfurt am Main Visiting Address: Senckenberganlage 30-36 60325 Frankfurt am Main Klaus Gihr Head of Division Sector Policy Division / Phone: +49 69-7431-2581 E-Mail: Klaus.Gihr@kfw.de Phone: +49 69 7431 0 Fax: + 49 69 7431-2944 www.kfw-entwicklungsbank.de 20
Thank You for Your Attention! 21