Invest in the everlasting. Green Bonds Made by KfW.

Transcription

1 Invest in the everlasting. Green Bonds Made by KfW.

2 Haftungsausschluss / Disclaimer Die in diesem Dokument enthaltenen Informationen stellen kein Angebot zum Kauf von Wertpapieren in den USA dar. Wertpapiere dürfen in den USA nur mit vorheriger Registrierung oder ohne vorherige Registrierung nur aufgrund einer Ausnahmeregelung verkauft oder zum Kauf angeboten werden. Ein Angebot zum Kauf von Wertpapieren wird in den USA nur auf Grundlage eines Prospekts erfolgen, der von der KfW zur Verfügung gestellt wird und detaillierte Informationen über KfW, ihre Geschäftsleitung, ihre Jahresabschlüsse sowie Informationen über die Bundesrepublik Deutschland enthalten wird. The information contained in this document does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any offering of securities in the United States will be made by means of a prospectus that may be obtained from KfW and will contain detailed information about KfW and its management, financial statements and information about the Federal Republic of Germany. 2

3 Agenda 1 KfW commitment to sustainability 2 Green Bonds Made by KfW 3 Green Bond issuances 4 Key figures on KfW and its funding programme 5 Green Bond portfolio of KfW 3

4 KfW commitment to sustainability

5 KfW in brief Frankfurt The promotional bank of the Federal Republic of Germany, established in 1948 as a public law institution. Benefits from explicit and direct statutory guarantee and institutional liability from the Federal Republic of Germany. German federal states Shareholders 20% Federal Republic of Germany Regulated by the Law concerning KfW and exempt from corporate taxes. 80% Zero risk weighting of KfW s bonds. (1) Rating Berlin Bonn Supervision by the German Federal Ministry of Finance and the German Financial Supervisory Authority BaFin. Subject to certain provisions of German and European bank regulatory laws by analogy, in large part with effect from January 1, Credit Aaa AAA AAA Moody s Sustainability TOP 2 imug out of 30 Scope S&P AAA Prime # 5 MSCI oekom out of 343 Sustainalytics (1) According to the standardized approach of the Capital Requirements Regulation (CRR) 5

6 KfW Group s business activities KfW aims for sustainable improvement of the economic, social, and ecological conditions of people s lives. New business 2017: EUR 76.5bn SME Bank Municipal and Private Client Bank/ Credit Institutions Export & project finance Promotion of developing countries & emerging economies Financial markets Promotion of small- and medium-sized enterprises, business start-ups and other commercial clients in Germany Housing programmes, environmental and climate protection, educational finance for private clients in Germany as well as financing for public clients (e.g., municipalities, regional promotional banks) Customized financing for exports and project & corporate financing world-wide KfW s public (KfW Development Bank) & private sector (DEG) development cooperation activities ABS & Green-Bond-Portfolio 29% 39% 18% 13% 2% Environment investment ratio: Domestic 43% 44% SME ratio: New business for environment and climate protection in % of total new business volume. Based on year-end 2017 data. New business for SMEs in % of total new domestic business volume. 6 6

7 Germany and Europe face challenges from megatrends KfW is fully committed to the concept of sustainable development Environmental and climate protection Demographic change Globalisation / technical progress For us, entrepreneurial activities and social responsibility go hand in hand. Through its financing activities, KfW supports the improvement of economic, ecological and social living conditions at the local, national, European and global level with a view to contributing to sustainable development. For us, sustainability means the establishment of viable, self-sustaining economic structures. 7

8 Sustainability approach at KfW KfW Group Lending business Sustainable banking operations Governance & CSR Environment and climate protection 43% In-house environmental protection Public Corporate Governance Code Demographic change 11% Responsible procurement Broad sustainability management system Globalisation / technical progress 17% Stakeholder dialogue & staff Prevention of corruption and money laundering Trend-independent promotional topics 29% Sustainable portfolio management KfW Foundation Declaration on respect for human rights in KfW s business activities KfW Sustainability principles Data based on new business

9 1. Pillar: Lending business KfW is one of the world s largest financiers of environmental investments with more than EUR 280bn invested over the last 10 years. New business environment and climate protection in EUR bn New business 2017 by primary target in EUR bn 90 50% % % % % New business other primary targets New business environment and climate protection Environment investment quota 0% 0 Environment and climate protection Demographic change Globalisation and Trend-independent technical progress promotional topics Quelle: KfW 9

10 2. Pillar: Sustainable banking operations In-house environmental protection Internal sustainability & environmental management system since 1994 Fields of activities Awards Energy consumption and green electricity Energy-efficient buildings Business travel and commuting Water and wastewater Recycled paper Charging station for electric cars and fleet modernisation Green Building Frankfurt 2009 Best Tall Building in the World 2011 Reporting Frankfurt 2014 KfW GHG emissions (t) Energy consumption 8,479 6,811 6,294 6,734 Total business travel 8,113 9,446 7,394 7,411 Total 16,592 16,257 13,628 14,145 Ø per employee Source: KfW Environmental reporting/accounting since 1998 Sustainability report since 2006 Comprehensive sustainability reporting on KfW s website. 100% of KfW s GHG emissions from energy consumption and business travel are offset by purchasing Clean Development Mechanism certificates. 10

11 2. Pillar: Sustainable banking operations Sustainable investment approach for KfW liquidity portfolio KfW's liquidity portfolio Sustainable investment approach for the liquidity portfolio Purpose Strategy Asset classes Securing KfW's liquidity ~EUR 25bn Pure fixed income portfolio Buy-and-hold strategy Exclusively investmentgrade bonds Government bonds Covered bonds Financials Bonds issued by government-related issuers and agencies ESG-Integration Only investments in bonds of issuers whose sustainability score is among the best 80% of the respective sector Sustainability assessment of issuers performed by an external provider (Sustainalytics) Exclusion criteria Exclusion criteria substantially based on the IFC Exclusion List Investments only in bonds from issuers who are in compliance with the exclusion list Engagement The sustainability rating of an issuer is crucial for a potential bond investment Dialogue with the issuers on a regular basis ABS Green Bonds - Made by KfW / April

12 3. Pillar: Governance Law concerning KfW Federal Court of Auditors Federal Financial Supervisory Authority (BaFin) Legal supervision by Federal Ministry of Finance in consultation with the Federal Ministry for Economic Affairs and Energy Regulation concerning analogous application of bank regulatory law Prevention of corruption Executive Board Business activities Prevention of money laundering KfW Bylaws Public Corporate Governance Code since 2011 Data protection Board of Supervisory Directors Presidial and Nomination Committee Remuneration Committee Audit Committee Risk and Credit Committee Code of conduct for Executive Board and employees 12

13 Green Bonds Made by KfW

14 Increasing investors willingness to engage on environmental and social topics Total issuance of Green Bonds (in EUR billion) % 10% 26% 41% 2% 1% Corporates Banks Supras/Agencies Sovereigns Muni/Province/City Covered Bonds % 7% 8% 23% 47% Europe China North America Supranational Other Source: Bloomberg EUR 232bn total green bond market volume. This corresponds to approx. 0.3% of total bond markets. Market diversification with regard to issuers (banks, corporates, municipalities, sovereigns), countries (e.g. China) and products (Green ABS, Green Covered Bonds). Additional players entering the market (rating agencies, stock exchanges, index provider). 14

15 Green Bonds Made by KfW Key elements Ambition To boost responsible investment in capital markets. To strengthen sustainability dialogue with investors. Drivers KfW s holistic sustainability approach. KfW s long standing expertise in environmental financing. Goals To raise additional funds for environmental projects. To enhance capital markets infrastructure to finance environmental projects. To attract new investors. To give impetus to the green bond market via new quality standards and increased liquidity. KfW s support of the UN Principles for Responsible Investment. Growing green bond investor demand. Active contribution to the fight against climate change. 15

16 Green Bonds - Made by KfW KfW s Green Bonds an innovative product Environmental and social impact 1 Estimated GHG reduction of 800 tons (1) p.a. per EUR 1 million green bond investment Creation and protection of jobs Reduction of energy imports to Germany and fossil fuel burning costs Environmental impact evaluated by an independent external research institution (since 2014 ZSW (2) ) 2 High credibility Independent 2 nd opinion for KfW s Green Bonds by the experienced, non-profit research center CICERO (3) Green Bond rating "b+" by sustainability rating agency oekom research KfW is among global ESG (4) leaders Excellent credit quality, large size Cicero graded KfW Green Bonds as "dark green" which is the best grade achievable (1) Average value for based on ZSW evaluation. Current and future impact might differ (2) ZSW: Center for Solar Energy and Hydrogen Research Baden-Württemberg (3) CICERO: Center for International Climate and Environmental Research Oslo (4) ESG: Environment, Social, Governance 16

17 Qualifying assets KfW promotional programme Renewable Energies Standard Within its Renewable Energies Standard programme, KfW provides financings for facilities to generate electricity or electricity and heat in combined heat and power stations from these renewable sources: solar energy hydropower biogas/-mass wind energy Who receives financings? Private individuals and non-profit organisations which feed the generated electricity/ heat into the grid Self-employed professionals/farmers German and non-german enterprises majority-owned by private individuals Enterprises in which local authorities, churches or charities hold an interest What makes this KfW loan attractive? Long-term, low-interest loans Interest rate fixed for ten years, or even longer for the entire term Repayment-free start-up period Up to EUR 50 million loan amount and 20 years repayment term Financing share of up to 100% of each project s investment cost Risk-adjusted interest rate 17

18 Qualifying assets KfW s commitments for environmental investments 2017: EUR 33,217mn (1) 2017 in EUR bn Domestic International Capital Markets Renewable Energy Energy Efficiency 4.2 Qualifying assets for KfW green bonds Green Bond Portfolio 0.3 thereof Renewable Energy: 13% Energy Efficiency: 68% Others: 20% Others (1) Total volume of KfW Group; consolidated by commitments in export and project finance which were refinanced through programmes of SME bank 18

19 Project examples KfW promotional programme Renewable Energies Standard Wind farm "Dretzen II" by NOTUS energy GmbH Dretzen, Bandenburg, Germany Project Location PV system by FEH Solarpark 6 GmbH Senftenberg, Brandenburg, Germany 2017 Completion ,000 MWh 8,500 households Renewable energy produced Supply area 1,481 MWh Own consumption 15,799 tons p.a. Estimated GHG reductions 890 tons p.a. EUR 22.5mn (KfW share: 88%) Total project costs EUR 2mn (KfW share: 75%) 19

20 Project examples KfW promotional programme Renewable Energies Standard Wind farm Bendorf - Oersdorf Rendsburg- Eckenförde, Schleswig- Holstein Project Location PV sytem by HP-T Höglmeier Polymer- Tech GmbH Raitenbuch, Bayern 2014 Completion ,000 MWh 11,000 households Renewable energy produced Supply area 945 kwh Own consumption 32,379 tons p.a. Estimated GHG reductions 127 tons p.a. EUR 27.9mn (KfW share: 75%) Total project costs EUR 420,000 (KfW share: 95%) 20

21 Green Bonds Made by KfW Proven business model for KfW s domestic promotional programmes Customer Customer s bank Capital markets Projects 2017 wind energy (86%) solar energy (12%) other (2%) KfW-Programme Renewable Energies (1) Requests for disbursements 2017: EUR 4.1bn Green commitments overall 2017: EUR 33.2bn KfW Green Bonds Liquid bonds New investors Grow market out of the niche (multi-currency approach) External evaluation: 2nd opinion (CICERO) Impact measurement Green bond rating (oekom) amounts matching requests for disbursements Qualifying assets (1) Renewable Energies - Standard Programme Transparent tracking (separate account) Quarterly reporting 21

22 Green Bonds Made by KfW Management of proceeds Transparent tracking Net proceeds from issuance Green bonds in several currencies and sizes Green bond account Separate euro account on first-in first-out basis Renewable Energies Standard programme Proceeds used in projects of standard renewable energy programme Amounts matching the requests for disbursements under KfW s programme Renewable Energies Standard will be deducted from the balance of the separate internal account on an ongoing basis (first in, first out). Proceeds envisaged to be used within the same calendar year as issuance. Any KfW Green Bond will be reported as fully allocated when the cumulated requests for disbursements total the net proceeds from the issuance. KfW expects a full allocation by the end of the year of issuance the latest. The volume-weighted average maturity of Green Bonds Made by KfW of each calendar year will not exceed the respective prior year s average duration of loan commitments under the Renewable Energies Standard programme. 22

23 Green Bonds Made by KfW Reporting Sign up for our newsletter service at Green bond reporting Green bond webpages ( Investor newsletter Final impact report (third party evaluation) KfW's quarterly reporting contains information about: Estimated environmental and social impact of the green bond related projects (ex-ante) Net proceeds of KfW's Green Bonds compared with requests for disbursements under the related loan programme ( Renewable Energies - Standard ) Requests for disbursements distributed by type of use and region 23

24 Green Bond Principles "Green Bonds Made by KfW" in line with the Green Bond Principles Use of Proceeds Process for Project Evaluation and Selection Management of Proceeds Reporting Green Bond Principles Requirements 1) Green projects aiming to address areas such as climate change, natural resources depletion, loss of biodiversity and/or pollution control Transparent decision-making process to determine the eligible projects External review Traceable management of proceeds within the issuing organization External review At least annual reporting on the use of proceeds until full allocation Description of underlying assets, disbursements and expected impact Green Bonds Made by KfW Renewable energy projects under KfW's programme "Renewable Energies Standard" High level of transparency through proven loanprogramme "Renewable Energies Standard" Independent 2 nd opinion provided by CICERO 2) : KfW green bonds achieved the best grade "dark green" Net proceeds are allocated to an internal account exclusively used for disbursements under the programme "Renewable Energies Standard" Independent 2 nd opinion by CICERO 2) and rating by oekom 3) : rated KfW green bonds achieved b+ (good) Quarterly reporting on the use of proceeds until full allocation Final impact reporting for each year based on third party evaluation 1) Voluntary Process Guidelines for Issuing Green Bonds, as published by International Capital Market Association, dated June 16, ) CICERO: Center for International Climate and Environmental Research Oslo 3) KfW EUR Green Bond and KfW USD Green Bond rated by oekom Research AG 24

25 Green Bond issuances

26 Green Bonds Made by KfW Highlights of KfW s green bond issuances KfW has been issuing green bonds since 2014 totalling EUR 13.5bn; market share of around 5% 2017: 4 bonds (+ 3 taps) amounting to EUR 3.7bn (5% of total funding) EUR, USD, AUD, GBP and SEK with potentially more currencies to come Large and liquid sizes in benchmark maturities Comparable to other KfW bonds regarding structure, pricing, rating KfW green bonds are eligible for the green bond indices "The BofA Merrill Lynch Green Bond Index", "Barclays MSCI Green Bond Index", "S&P Green Bond Index" and "Solactive Green Bond Index" Disbursement requests under the Renewable Energies Standard programme (2017) Distribution by renewable energy type Geographical distribution wind (86%) solar (12%) other (2%) Germany (73%) France (13%) Finland (4%) Norway (3%) Other (7%) 26

27 Green Bonds Made by KfW Issuances Outstanding green bond volume: EUR 13.5bn Green Bond ISIN Coupon Volume CCY Awards KfW Green Bond EUR 2014/2019 XS % EUR 1.5bn KfW Green Bond USD 2014/2019 US500769GF % USD 1.5bn $ KfW Green Bond AUD 2015/2020 AU000KFWHAC9 2.40% AUD 1bn A$ KfW Green Bond GBP 2015/2020 XS % GBP 1bn KfW Green Bond EUR 2015/2020 XS % EUR 1.5bn KfW Green Bond USD 2015/2020 US500769GU % USD 1bn $ KfW Green Bond SEK 2015/2020 XS % SEK 1bn SEK KfW Green Bond SEK 2016/2021 XS % SEK 1bn SEK KfW Green Bond EUR 2016/2024 XS % EUR 1bn KfW Green Bond USD 2016/2021 US500769HD % USD 1.5bn $ KfW Green Bond EUR 2017/2025 XS % EUR 2bn KfW Green Bond USD 2017/2020 US48245ACK % USD 150mn $ KfW Green Bond USD 2017/2020 US48245ACL % USD 200mn $ KfW Green Bond USD 2017/2022 US500769HP % USD 1bn $ KfW Green Bond SEK 2018/2023 XS % SEK 1bn SEK KfW Green Bond SEK 2018/2028 XS % SEK 5bn SEK 27

28 Estimated Impact of "Green Bonds Made by KfW" Environmental and social impact based on programme evaluation Impact of EUR 1 million investment: 800 tons 69,000 EUR 22 jobs 94,000 EUR of GHG emission reductions (CO 2 -equivalents) per annum of savings on energy imports to Germany and fossil fuel costs per annum created and/or secured (person years) of savings in external costs per annum Values are based on numbers evaluated by ZSW and internal calculations. Savings in GHG emissions are based on "Renewable Energies Standard" programme impact in Germany. Savings for energy imports to Germany and in fossil fuels, saved/created jobs and savings in external costs are based on "Renewable Energies" programme impact in Germany. Current and future impact might be different, especially for projects outside Germany. 28

29 Green Bonds Made by KfW Overview on issuances and reporting Green Bonds Reporting Green Bonds issued in EUR and USD Net proceeds from the issuances totalled EUR 2.7bn Use of proceeds Available for the full year ended December 2014 Impact Available for the full year ended December 2014; based on loan programme evaluation by ZSW Green Bonds issued in AUD, GBP, EUR, USD and SEK Net proceeds from the issuances totalled EUR 3.7bn Use of proceeds Available for the full year ended December 2015 Will be disclosed once ZSW has evaluated the loan programme for 2015 Impact Green Bonds issued in SEK, EUR, GBP and USD Net proceeds from the issuances totalled EUR 2.8bn Use of proceeds Available for the full year ended December 2016 Will be disclosed once ZSW has evaluated the loan programme for 2016 Impact Green Bonds issued in EUR, USD, GBP und AUD Net proceeds from the issuances totalled EUR 3.7bn Use of proceeds Available for the full year ended December 2017 Impact Will be disclosed once a third party has evaluated the loan programme for

30 2014: Reporting on the Use of Proceeds For the full year ended December 31, 2014 Requests for Disbursements under KfW's "Renewable Energies Programme Standard" and green bond issue proceeds 2014 Green Bonds Made by KfW 2.7bn EUR Total 4.1bn EUR 2 green bonds KfW issued two green bonds in 2014 in EUR and USD. EUR 2.7bn 100% allocated 80% wind energy, 75% in Germany 5% of total funding Net proceeds from the green bonds issued in 2014 amounted to EUR 2.7bn. As of December 31, 2014, 100% of the net proceeds from the green bond issuances in 2014 were invested in KfW's programme "Renewable Energies - Standard". 80% of the requests for disbursements were for wind energy, 17% for solar energy and the remainder for biogas/-mass, hydropower and others. 75% of the financed projects were located in Germany. 22% were located in France, Sweden and the UK. 3.7 bn EUR Green bonds account for 5% of KfW's total funding which totalled to EUR 57.4bn. Distribution of disbursements by renewable energy type (2014) wind (80%) solar (17%) biogas/- mass (1%) hydropower (<1%) other (2%) Geographical distribution of disbursements (2014) Germany (75%) France (16%) Sweden (3%) UK (3%) Other (3%) 30

31 2014: Reporting on the Impact Environmental and social impact for the full year 2014 based on external evaluation by ZSW Impact of EUR 1 million investment in Green Bonds Made by KfW issued : 1,271 tons of GHG emission reductions (CO 2 -equivalent) p.a. EUR 67,155 of savings on energy imports to Germany and fossil fuel costs p.a. 25 jobs created and/or saved (person years) EUR 129,606 of savings in external costs p.a. (e.g. by avoiding environmental and health damage) Commitments under KfW s programme Renewable Energies Standard in 2014 Number of loan commitments 4,805 Volume of loan commitments (EUR mn) 3,786 Thereof outside Germany (EUR mn) 1,001 Investments financed (EUR mn) 5,909 Thereof outside Germany (EUR mn) 1,886 Average loan volume per commitment (EUR) 787,910 Average investment financed per commitment (EUR) 1,229,780 Average share of financing 64% Installed electrical power supported in 2014 Plant type MW el Biogas 5.5 Solid biomass 0.1 Photovoltaic energy Hydropower 11.0 Wind energy onshore 3,082.5 Total 3,669.4 TWh Annual electricity production Values are based on programme impacts in 2014 in Germany with numbers evaluated by ZSW and internal calculations; impact for projects outside Germany might be different. 31

32 2015: Reporting on the Use of Proceeds For the full year ended December 31, 2015 Requests for Disbursements under KfW's "Renewable Energies Programme Standard" and green bond issue proceeds bn EUR Green Bonds Made by KfW Total 4.2bn EUR green bonds KfW issued five green bonds in 2015 thereof three new currencies: AUD, GBP and SEK. Distribution of disbursements by renewable energy type (2015) wind (90%) solar (8%) biogas/- mass (<1%) other (2%) EUR 3.7bn 100% allocated 90% wind energy, 79% in Germany 6% of total funding Net proceeds from the green bonds issued in 2015 amounted to EUR 3.7bn. As of December 31, 2015, 100% of the net proceeds from the green bond issuances in 2015 were invested in KfW's programme "Renewable Energies - Standard". With 98%, the majority of all requests for disbursements were related to projects for the use of wind energy (90%) and solar energy (8%). 79% of the financed projects were located in Germany. 21% were located in France, Finland, Italy, the UK, the Netherlands, Austria, Canada and Ireland. Green bonds account for 6% of KfW's total funding which totalled to EUR 62.6bn. Geographical distribution of disbursements (2015) Germany (79%) France (12%) Finland (4%) Italy (2%) Other (3%) 32

33 2015: Reporting on the Impact Environmental and social impact for the full year 2015 based on external evaluation by ZSW Impact of EUR 1 million investment in Green Bonds Made by KfW issued : 859 tons of GHG emission reductions (CO 2 -equivalent) p.a. EUR 46,759 of savings on energy imports to Germany and fossil fuel costs p.a. 16 jobs created and/or saved (person years) EUR 86,418 of savings in external costs p.a. (e.g. by avoiding environmental and health damage) Commitments under KfW s programme Renewable Energies Standard in 2015 Number of loan commitments 2,887 Volume of loan commitments (EUR mn) 4,266 Thereof outside Germany (EUR mn) 1,088 Investments financed (EUR mn) 5,421 Thereof outside Germany (EUR mn) 1,336 Average loan volume per commitment (EUR) 1,477,781 Average investment financed per commitment (EUR) 1,877,657 Average share of financing 79% Installed electrical power supported in 2015 Plant type MW el Biogas 13.7 Solid biomass 0.5 Photovoltaic energy Hydropower 8.3 Wind energy onshore 3,015.9 Total 3,598.9 TWh Annual electricity production Values are based on programme impacts in 2015 in Germany with numbers evaluated by ZSW and internal calculations; impact for projects outside Germany might be different. Calculated impact accounts for KfW's financing share in Germany. 33

34 2016: Reporting on the Use of Proceeds For the full year ended December 31, 2016 Requests for Disbursements under KfW's programme "Renewable Energies Standard" and green bond issue proceeds 2016 Green Bonds Made by KfW Total 4.2bn EUR Distribution of disbursements by renewable energy type (2016) wind (86%) 2.8bn EUR solar (13%) 4 green bonds EUR 2.8bn 100% allocated 86% wind energy, 79% in Germany 4% of total funding KfW issued four green bonds in 2016 thereof three new bonds (SEK, EUR, USD) and one tap (GBP). Net proceeds from the green bonds issued in 2016 amounted to EUR 2.8bn. As of December 31, 2016, 100% of the net proceeds from the green bond issuances in 2016 were invested in KfW's programme "Renewable Energies - Standard". With 99%, the majority of all requests for disbursements were related to projects for the use of wind energy (86%) and solar energy (13%). 79% of the financed projects were located in Germany. 21% were located in France, Denmark, the United Kingdom, Finland, the Netherlands, Croatia, Japan, Ireland, Austria, and Canada. Green bonds account for 4% of KfW's total funding which totalled to EUR 72.8bn. other (1%) Geographical distribution of disbursements (2016) Germany (79%) France (12%) Denmark (3%) UK (1%) Other (5%) 34

35 2016: Reporting on the Impact Environmental and social impact for the full year 2016 based on external evaluation by ZSW Impact of EUR 1 million investment in Green Bonds Made by KfW issued : 794 tons of GHG emission reductions (CO 2 -equivalent) p.a. EUR 44,321 of savings on energy imports to Germany and fossil fuel costs p.a. 16 jobs created and/or saved (person years) EUR 80,721 of savings in external costs p.a. (e.g. by avoiding environmental and health damage) Commitments under KfW s programme Renewable Energies Standard in 2016 Number of loan commitments 3,138 Volume of loan commitments (EUR mn) 4,516 Thereof outside Germany (EUR mn) 826 Investments financed (EUR mn) 5,670 Thereof outside Germany (EUR mn) 1,112 Average loan volume per commitment (EUR) 1,438,987 Average investment financed per commitment (EUR) 1,806,860 Average share of financing 80% Installed electrical power supported in 2016 Plant type MW el Biogas 0.9 Solid biomass - Photovoltaic energy Hydropower 1.78 Wind energy onshore 3,015.2 Total 3,556.4 TWh Annual electricity production Values are based on programme impacts in 2016 in Germany with numbers evaluated by ZSW and internal calculations; impact for projects outside Germany might be different. Calculated impact accounts for KfW's financing share in Germany. 35

36 2017: Reporting on the Use of Proceeds For the full year ended December 31, 2017 Requests for disbursements under KfW's programme "Renewable Energies Standard" and green bond issue proceeds 2017 Green Bonds Made by KfW Total 4.1bn EUR Distribution of disbursements by renewable energy type (2017) wind (86%) 3,7bn EUR solar (12%) 7 green bonds EUR 3.7bn 100% allocated 86% wind energy, 73% in Germany 5% of total funding KfW issued four green bonds in 2017 thereof four new bonds (EUR, USD) and three taps (GBP, AUD). Net proceeds from the green bonds issued in 2017 amounted to EUR 3.7bn. As of December 31, 2017, 100% of the net proceeds from the green bond issuances in 2017 were invested in KfW's programme "Renewable Energies - Standard" 98% of all requests for disbursements were related to projects for the use of wind energy (86%) and solar energy (12%). 73%, the projects financed were located in Germany. 27% of all requests for disbursements were related to projects located in France, Finland, Norway, Ireland, Denmark, Japan, the UK, Italy, Sweden, the Netherlands and Croatia. Green bonds account for 5% of KfW's total funding which totalled to EUR 78.2bn. other (2%) Geographical distribution of disbursements (2017) Germany (73%) France (13%) Finland (4%) Norway (3%) Other (7%) 36

37 Key figures on KfW and its funding programme

38 Key financial figures of KfW Group (IFRS) Solid business performance Business activities (in EUR bn) for the period Q Promotional business volume Income statement key figures (in EUR mn) for the period Operating result before valuation & promotional activities 1,898 1, Consolidated profit 2,002 1, Consolidated profit before IFRS effects from hedging 1,769 1, Balance sheet (in EUR bn) at the end of the period Total assets Equity Volume of business Key regulatory figures (in %) (1) at the end of the period Tier 1 capital ratio 22.3% 20.6% 20.8% Total capital ratio 22.3% 20.6% 20.8% (1) In 2016, calculated for internal purposes based on the voluntary application of all material IRBA rules. In 2017, calculated based on the IRBA approach for a large part of the portfolio. For the remaining sub-portfolios KfW applies the CRSA approach until full IRBA approval. 38

39 Business performance Total promotional business volume in EUR bn About 2/3 domestic and 1/3 international business. Slight decrease in 2017 as planned in EUR bn Total assets 472 Germany s 3 rd largest credit institution in terms of total assets in EUR bn 2.2 Consolidated profit Decreasing profit in 2017 as predicted, but higher than expected. Very good, but decreasing valuation result due to non-recurring effects Tier in % 18.3 Capital ratio (Tier I) * BaFin approval as advanced IRBA institution since 6/2017. Decrease in 2017 mainly due to effects of the IRBA approval process *BaFin minimum requirement at year-end

40 Explicit and direct guarantee from the Federal Republic of Germany Basis of KfW s funding Guarantee established in 1998 Defined by law Direct, explicit and unconditional 1a of the Law concerning KfW: The Federal Republic guarantees all obligations of KfW in respect of loans extended to and debt securities issued by KfW, fixed forward transactions or options entered into by KfW and other credits extended to KfW as well as credits extended to third parties inasmuch as they are expressly guaranteed by KfW. 40

41 KfW s funding: three pillar strategy A well-structured range of products offers suitable opportunities for various investors needs Benchmark programme Large and liquid bonds in EUR and USD At least 3, 5, 7 and 10 year benchmark maturities each year Target benchmark sizes: EUR 3 5 bn USD 3 5 bn EUR-taps up to a maximum volume of EUR 6bn 2017: EUR 78.2 bn 2018 target: EUR bn Other public transactions Large and liquid bonds in non-benchmark maturities with or without call option (EUR and USD) in strategic markets (GBP, AUD, SEK, JPY, CNH, NOK, CHF ) in further currencies Green Bonds Other structured public bonds in various currencies Private placements Customized bonds for investor needs Flexible in currency, structure and maturity 2017: 16 transactions 2017: 73 transactions 2017: 56 transactions 71% 25% 4% 41

42 Capital markets Strong presence in the capital markets Funding volume in EUR bn Capitalization (as of ) Already issued in 2018: EUR 46.3bn as at June 30 9% 4% 6% Total EUR 450.9bn Capital market Money market 81% Benchmark bonds Public transactions Private placements Other liabilities (primarily collateral from derivative transactions) Equity 42

43 KfW s funding by currencies and instruments Benchmark bonds are key core currencies Euro and US Dollar Instruments (in %) Currencies (in %) EUR USD AUD GBP JPY Others Benchmark bonds Public transactions Private placements 2013 (EUR 65.4 bn) 2014 (EUR 57.4 bn) 2015 (EUR 62.6 bn) 2016 (EUR 72.8 bn) 2017 (EUR 78.2 bn) Highlights in 2017: 12 Benchmark bonds (plus 4 taps) in EUR and USD. In 2017, benchmark bonds accounted for 71% of total funding. The challenging market environment led to a particularly flexible funding strategy. Unlike the year before, EUR regained in 2017 the highest share (approx. EUR 41.7bn, 53% of total funding) in the currency mix followed by USD (approx. EUR 26.9bn equivalent, 34% of total funding). 43

44 KfW s global investor base Distribution of KfW s EUR-Benchmark investor base in % Geographic Distribution in % Investor Distribution 60,0 60,0 50,0 Europe ex Germany 50,0 40,0 40,0 Banks 30,0 Germany 30,0 Central Banks Asset Mgt. 20,0 20,0 10,0 Asia 10,0 0, Jun 2018 Americas Other 0, Jun 2018 Ins. & Pension Other Europe ex Germany Asia Other Germany Americas Central Banks Asset Mgt. Other Banks Ins. & Pension based on allocations 44

45 KfW s global investor base Distribution of KfW s USD-Benchmark investor base in % Geographic Distribution in % Investor Distribution 50,0 70,0 40,0 Europe 60,0 30,0 Americas 50,0 40,0 Banks 20,0 Asia 30,0 Central Banks 20,0 Asset Mgt. 10,0 10,0 0, Jun 2018 Other MEA 0,0 Ins. & Pension Other Jun 2018 Asia MEA Europe Central Banks Banks Asset Mgt. Americas Other Ins. & Pension Other based on allocations 45

46 KfW in the capital markets in 2018 Strong presence in the capital markets with funding target of EUR billion. KfW's outstanding access to the capital markets, including in USD, facilitates the issue of liquid global bonds. KfW relies on its proven 3-pillar-strategy. EUR & USD remain key currencies in 2018 (2017: 87.7%). The benchmark programme is the most important funding source. GBP, AUD and Uridashi will remain important for KfW s funding mix. Continued commitment to green bonds. 46

47 Green Bond portfolio of KfW

48 Green Bond Portfolio Motivation and goals KfW s long-term goal is an active contribution to the global reduction of environmental pollution and climate change, through alternative funding of sustainable projects via the capital market. The portfolio is backed by the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB). KfW actively supports the green bond market with the development of qualitative standards and an engagement process with market participants. Since April 2015, KfW has been actively investing in Green Bonds on a global scale. The target volume of the portfolio was doubled to EUR 2 billion in May

49 Green Bond Portfolio Field of activity and minimum criteria KfW seeks to contribute to the realization of projects in the fields of: Renewable energy funding Energy efficiency projects Environmental friendly transportation Waste industry (Waste-) water-management Biodiversity measures Other refinancings with a positive impact on climate and environmental protection Beforehand, KfW obligatorily checks the following minimum criteria: Transparent process of funds allocated, and a competent project selection A clear description of the projects refinanced (including goals and, if possible, projected impacts) A frequent public reporting as well as an independent second opinion 49

50 Green Bond Portfolio Key portfolio figures KfW will invest in the following fixed income securities: Sovereigns and regions Supranationals, agencies and other state-owned or partially state-owned institutions Financials Corporates Covered bonds and Pfandbriefe ABS (senior tranches only) An investment-grade rating is mandatory. Potential currencies will be USD, EUR and a selection of European currencies. 50

51 Disclaimer This document is provided for information purposes only. This document may not be reproduced either in full or in part, nor may it be passed on to another party. It constitutes neither an offer nor an invitation to subscribe or to purchase securities, nor is this document or the information contained herein meant to serve as a basis for any kind of obligation, contractual or otherwise. In all legal systems this document may only be distributed in compliance with the respective applicable law, and persons obtaining possession of this document should familiarise themselves with and adhere to the relevant applicable legal provisions. A breach of these restrictions may constitute a violation of US securities law regulations or of the law applicable in other legal systems. The information contained in this document is historical and speaks only as of its date. KfW disclaims any intention or obligation to update or revise the information contained in this document. By accessing this document you acknowledge acceptance of these terms. 51

52 Photo credits/references Titel slide: full-page image: gettyimages, plainpicture / Piotr Krzeslak, Cultura Slide 4: full-page image / KfW / Stephan Sperl Slide 5, Picture 1: KfW Photo Archive / Rüdiger Nehmzow Slide 5, Picture 2: KfW Photo Archive / Angelika Kohlmeier Slide 5, Picture 3: KfW Photo Archive / - Slide 6, Picture 1: KfW Photo Archive / - Slide 6, Picture 2: KfW Photo Archive / Jens Steingässer Slide 6, Picture 3: KfW Photo Archive / Bernhard Schurian Slide 6, Picture 4: KfW Photo Archive / photothek.net Slide 6, Picture 5: KfW Bankengruppe / Jens Steingässer Slide 7, Picture 1: KfW Photo Archive / Holger Peters Slide 7, Picture 2: KfW Photo Archive / Charlie Fawell Slide 7, Picture 3: KfW Photo Archive / photothek.net Slide 11: KfW-Bildarchiv / photothek.net Slide 13: full-page image / KfW / Stephan Sperl Slide 17: KfW Photo Archive / phototek.net Slide 19, Picture 1: WindStrom Erneuerbare Energien GmbH & Co. KG / - Slide 19, Picture 2: HP-T Höglmeier Polymer-Tech GmbH & Co. KG / Werner Röthlingshöfer Slide 20, Picture 1: NOTUS energy / FRICKE Film Slide 20, Picture 2: German Solar Construction GmbH / - Slide 25: full-page image / KfW / Stephan Sperl Slide 26: gettyimages, plainpicture / Piotr Krzeslak, Cultura Slide 37: full-page image / KfW / Stephan Sperl Slide 40: Deutscher Bundestag / Lichtblick / Achim Melde Slide 46: gettyimages, plainpicture / Piotr Krzeslak, Cultura Slide 47: full-page image / KfW / Stephan Sperl 52

53 Contact Treasurer of KfW: Ext. Dr. Frank Czichowski Capital Markets: Petra Wehlert Otto Weyhausen-Brinkmann Alexander Liebethal Investor Relations: Jürgen Köstner Nicolas Pfuhl Dorota Reiter Philipp Mahn Serviceline KfW Bankengruppe Palmengartenstrasse Frankfurt am Main Fon Ext Fax investor.relations@kfw.de Bloomberg: KfW <GO> Sign up here for our newsletter service 53