Indo-German Financial Cooperation Promotional Programme for Energy by C9Jd1Z2

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									KfW Development Bank
Promoting Energy Efficiency in Buildings



Claudia Loy

Asia Pacific Union for Housing Finance
New Delhi, 31 January 2012
Agenda


1   KfW at a Glance


2   The German Way


3   The International Perspective

     India – Energy Efficiency in New Residential Housing

     Southeast Europe – Promoting EE in SME and Housing

      China – Energy Efficient Refurbishment of Residential Housing




                                                                      2
 KfW
 Public Promotional Bank with Wide Array of Functions




            Domestic Promotion                      International Business
                                              We ensure inter-    We promote
          We promote Germany
                                              nationalisation     development
Promotion of                    Financing of
    SMEs,                        municipal
                                                                  Promotion of
  business      Promotion of infrastructur      International
                                 e projects                      developing and
start-ups and   housing and                      project and
                                    and                            transition
   environ-      education                      export finance
                               promotion in                         countries
   mental &
   climate                         Europe
  protection
             Promotion of Environmental and Climate Protection




                                                                              3
KfW
A Strong Environmental and Climate Protection Bank



                         Commitments in 2010:

                          EUR 25,3 billion
                          for environmental and climate protection

                          EUR 23 billion
                          for energy efficiency (EUR 11.5 bn)
                          and renewable energies (EUR 11.3 bn)


                          ► KfW is the no. 1 Environmental Bank in
                          Germany and one of the world’s leading
                          financing institutions for EE and RE


                                                                 4
Agenda


1   KfW at a Glance


2   The German Way


3   The International Perspective

     India – Energy Efficiency in New Residential Housing

     Southeast Europe – Promoting EE in SME and Housing

      China – Energy Efficient Refurbishment of Residential Housing




                                                                      5
System of Energy Efficiency Promotion




 Information and                        Promotional
    Consulting                          Programmes




Legislation, Rules and Regulations, Technical Standards

   ► German Energy Conservation Ordinance (EnEV)


                                                          6
One of the essential elements for promoting
EE in Housing



     Making energy demand transparent!




 "KfW-Efficiency House" –
 the performance standard for buildings
 in Germany!
                                              7
 KfW Efficiency House Standard


   Primary Energy
 Demand (kWh/m2/a)*

e.g. 108-63                                        KfW-115
                                                                      = 115 % of NL**                   B
                                                                                                        U
                                                                                                        I
 e.g. 94-55                                        KfW-100                                              L
                                                                      = 100% of NL                      D
                                                                                                  N
                                                                                                        I
                                                                                                  E
  e.g. 80-47                                       KfW-85                                         W
                                                                                                        N
                                                                       = 85 % of NL                     G
                                                                                                  B
                                                   KfW-70                                               S
  e.g. 66-39                                                           = 70 % of NL               U
                                                                                                        T
                                                                                                  I
                                                                                                        O
                                                                                                  L
                                                   KfW-55                                               C
  e.g. 52-30                                                           = 55 % of NL               D
                                                                                                        K
                                                                                                  I
                                                                                                  N
 e.g. 38-22                                        KfW-40                                         G
                                                                      = 40 % of NL                S

*Acctual values vary, depending on the reference building according to the German Energy Conservation
Ordinance (EnCO)
                                                                                                            8
**NL = New Building Level according EnCO
Promoting EE in housing – KfW in Germany
Funding and On-lending system

    Capital
    market      Loan (maturity                Loan (maturity
                e.g. 30 years)                e.g. 30 years)

 Funding

                                                                  Individual
                                   Bank                          homeowner
 Interest             Re-          Margin        Interest rate
 subsidy           financing     for credit     depending on
                                  risk and         efficiency
                                 handling          standard
   German
  Government                       0.75%




                                                                               9
Promoting EE in housing – KfW in Germany
Results


          Budget    Loan                        CO2-               Housing
 Year                                                                                Investments
          Subsidies Commitments                 reduction          Units             (million €)
          (million €)     (million €)           (1000 tons p.a.)   (in 1000)



 2007               850                 3,336              568                 204                  5,127


 2008             1,300                 5,127              767                 280                  8,552


 2009             2,035                 8,677           1,452                  617                 17,724


 2010             1,337                 8,746           1,049                  953                 21,330




                                                                                                        10
 Key Elements of Success



● Financial incentives based on energy performance of building -
 not individual measures

● Performance Assessment Tool robust and easy to handle

● Accepted Performance Standards or Label - more important
 than legal building codes
● Training of auditors

● High energy prices




                                                              11
        THANK YOU!
For more information, please contact:

Claudia Loy,
Head of Energy Sector and Policy Division

Silke Hermes,
Senior Project Manager

KfW Development Bank,
Energy - Asia,
silke.hermes@kfw.de
+49 69 7431 9786

                                            KfW Office Building “Westarkade”,
                                            Electricity Consumption: 98 kWh/p.sqm/p.a.
                                                                                         12
Agenda


1   KfW at a Glance


2   The German Way


3   The International Perspective

     India – Energy Efficiency in New Residential Housing

     Southeast Europe – Promoting EE in SME and Housing

      China – Energy Efficient Refurbishment of Residential Housing




                                                                      13
Promoting EE Buildings in India
Results-based Tool and Label

                               Joint Assessment Tool developed by
                                Fraunhofer Institute and TERI, India

                               - Based on the whole-building-approach
                                (Flexibility)

                               - Robust energy performance assessment
                                (Comparability)

                               - Easy to use by architects and auditors
                                 (Scalability)

                               - Easy to compare different EE design,
                                material and technology combinations
                                (Optimization)

                               - Basis for Energy Efficiency Label
                                (Communication)
                                                                          14
Agenda


1   KfW at a Glance


2   The German Way

    The International Perspective
3


     India – Energy Efficiency in New Residential Housing

     Southeast Europe – Promoting EE in SME and Housing

      China – Energy Efficient Refurbishment of Residential Housing




                                                                      15
 South East Europe
 Promotion of EE in SME and Housing

Key Features:

   EE loan programmes for SMEs & Housing via various partner banks
  Average loan size: EUR 115,000 (SME), EUR 2,200 (Housing)
   No/ only slightly reduced interest rates
  Total loan volume: EUR 215 million (2010)
  Additional TA for Capacity Building & co-finance of energy audits


   target: minimum of 20% savings on energy

  Typical Measures for Energy Efficiency in Residential Buildings:
  ● High-performance windows;
  ● Installation of thermostatic valves; etc.
  ● Insulation of walls, roof and basement ceilings and pipe
  ● Modernization of hot water boilers and meters, heat systems;
                                                                       16
Agenda


1   KfW at a Glance


2   The German Way


3   The International Perspective

    India – Energy Efficiency in New Residential Housing

     Southeast Europe – Promoting EE in SME and Housing

     China – Energy Efficient Refurbishment of Residential Housing




                                                                     17
 China
 Energy Efficient Refurbishment of Housing Blocks
Starting Point: GiZ Pilot Scheme
  3 pilot buildings in Tangshan (2006 – 2009)
● 30-50% reduction of energy demand for heating
 by thermal insulation of walls and roofs, double-glazed windows,
 refurbishment of heating systems

Current stage:
  KfW Program Climate Protection in Urban Areas
  2010-2012
 Tangshan: Volume: € 23.64 m, refurbishment of 800,000 m²
 Tonghua: Volume: € 36.36 m, refurbishment of 1,100,000 m²

● Aim: 50-60% reduction of energy demand for heating
● CO2 Reduction of 0,32 m tons per year
     ● agreement on high efficiency standards
     ● Choice of most cost-effective measures
       Know-how transfer & quality control during planning and
       implementation

       Before refurbishment                         355 kWh/m²y
       After refurbishment                          144 kWh/m²y
                                                                    18
   KfW Development Bank
   Promoting EE in Buildings Worldwide - Examples

Housing                        Public Buildings          Commercial Buildings
Southeast Europe               South Africa
EUR 30 million                 EUR 50 million            China
                                                         EUR 20 million
India                          India
EUR 50 million                 EUR 50 million
                                                         Turkey
China                                                    EUR 30 million
EUR 60 million                 Jordan
                               EUR 34 million
(in planning)                                            Southeast Europe
                                                         EUR 35 million
Mexico                         Albania
EUR 85 million (in planning)
                                                         Croatia
                               Turkey                    EUR 25 million
                               (in planning)


Global: EUR 290 million        Global: EUR 150 million   Global: 150 million

                                                                               19
Back-up




          20
KfW
Financing with a public mission


● Founded in 1948 as promotional bank of
  the Federal Republic of Germany
● Shareholders: 80% Federal Republic,
  20% federal states
● Headquarter: Frankfurt am Main
  Branches: Berlin and Bonn
● Representative offices: around 70 offices
  and representations worldwide
● Balance sheet total at the end of 2010:
  EUR 450 billion
● About 4,530 employees (2010)
● Top rating: AAA/Aaa/AAA
● Zero-weight under Basel II

                                              21
   KfW Development Bank
   Global Energy Sector Commitments 2006 - 2010

Total Commitments in the Energy Sector (cumulative 2006-2010):              EUR 3,739 million
of which renewable energy:                                                  EUR 2,281 million

                                                               Electrical
                               Other renewable
                                                            transmission/
                                 (CTF): 12%                  distribution
        Other renewable
        generation 30%                                            23%
                                                                                 Gas distribution
                                                                                       3%




         Power non-                                                              Coal-fired power
        renewable 2%                                                                plants 3%

                                                                            Hydro-electric
               Energy                                                       power plants
                                       Biomass 1%
           policy/Energy                                                         8%
           efficiency 8%
                                   Wind power 9%       Solar energy 1%             CRS categorisation



Commitments for Demand-Side Energy Efficiency since 2006:        Asia                    31 %
                                                                 Europe/Caucasus         27 %
                                                                 Latin America           23 %           22
Promoting EE Buildings in India
Energy Efficient New Housing Programme


Loan (Eur 50 million) and Technical Assistance (EUR 1.5 million)
to the National Housing Bank (NHB) as apex bank to
refinance sub-loans for buyers of energy efficient new urban apartments

● Highest energy savings potential in new apartment blocks for middle
 income residents: 46-51% depending on climate zone - out of which
              ► 20-36% Building Envelope
              ► 16-22% Appliances
● Investments to achieve up to 40% savings financially attractive at 5 yr.
 payback (Average FIRR 25%)
● Preconditions for feasibility:
         - optimization of whole building design at planning stage
         - early contact to advise architects/developers
         - robust energy performance assessment tool
         - training of auditors and energy advisors
                                                                        23
Promoting EE Buildings in India
Promotional Programme Status


● Early stage of implementation: Agreements signed 12/2010, first
 disbursement 07/2011, TA tender ongoing

● Five residential housing developments located in the composite
 climate zone being evaluated:
   ● 23 individual buildings assessed and optimized with the
     Fraunhofer/TERI assessment tool
   ● Energy efficiency certificates under preparation by TERI:
      ● Covering 17,000 apartment units to be built in the next 5 yrs with
      ● Savings of up to 2000 kwh p.a. per apartment; and
      ● Expected total savings of 22,000 tCO2 p.a.


● Fraunhofer/TERI tool is being amended for the hot-dry and warm-humid
 climate zones (by November 2011)
                                                                        24
Promoting EE Buildings in India
Promotional Programme – Next Steps & Challenges


Next steps under the Programme TA:
● Establish the „Energy Efficient Housing“ brand and label in the Indian
  market
● Train energy auditors and architects in the energy assessment of new
  residential buildings with the Fraunhofer/TERI tool
● Achieve EE assessment and certification endorsement by public and
  private institutions
Continuous Challenges to the Promotional Programme:
● No mandatory minimum EE standard for residential buildings
● Multiple ministries and public agencies dealing with the residential
  building sector
● Lack of sustainable financial incentives to promote EE residential
  buildings


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Apartment Developer Website




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Pre-Constructed Housing Company Website




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Construction Material & Pre-Constructed
Housing Company Advertisement




                                          28
Real Estate Agent Advertisement




                                  29
Energy Efficiency House Label




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