German development bank announces record high commitments for developing countries

BySusanna Gevorgyan

German development bank announces record high commitments for developing countries

 

Germany’s KfW, a state-run investment, and development bank drove its commitments for developing countries and emerging economies to a record high level in 2020, increasing its funding to EUR 12.4 billion up from EUR 10.6 billion in 2019 in a bid to fight the challenges brought about by the pandemic.

KfW Commitments

This higher commitment of 16% was intended to be used to promote the business sector in developing countries and emerging economies and contributed to the implementation of 502 projects, the bank said in a press release.

The largest beneficiaries, Africa and the Middle East saw an increase of almost 50% in budgeted commitments, reaching EUR 5.2 billion. Of this amount, EUR 893 million was channeled to prolong reform partnerships (aimed at supporting anti-corruption, revenue-growth, and rule-of-law reforms) with Côte d’Ivoire, Ghana, Tunisia, Ethiopia, Morocco, and Senegal. KfW also managed to sustain over 100,000 jobs in more than 2,000 businesses via its “Special Initiative for Training and Employment”.

Furthermore, commitment to the environment and climate also remained high in 2020, standing at EUR 4.4 billion. The programs that receive funds within this context save around 8.4 million tons of CO2 in partner countries each year. To continue harmonizing its global activities with the 17 UN Sustainable Development Goals, KfW allocated EUR 1.2 billion for SDG 7 – “Affordable and Clean Energy” and enabled two million people to either upgrade or receive access to a modern energy supply, saving 900,000MWh of energy.

Targeting Coronavirus

EUR 4 billion funded the Emergency COVID-19 Support Programme of the Federal Ministry for Economic Cooperation and Development with 36% of this amount allocated to projects in Africa.

Chief Executive Officer of KfW Group, Dr. Günther Bräunig, said “Following the outbreak of the coronavirus pandemic, KfW responded very quickly to this enormous global challenge, both domestically and overseas, and contributed significantly to the implementation of the BMZ’s comprehensive Emergency COVID-19 Support Programme. This response helped to prevent the loss of development progress and stabilize the economic situation in many countries. At the same time, we maintained our focus on the medium and long-term objectives of environmental responsibility and strengthening partner countries’ resilience to further pandemics and crises.”

Overall, during the pandemic, KfW allocated funds for 241 projects in 74 countries, maintaining liquidity for both businesses and states.

All in all, in 2020, KfW’s total business turnover reached a record EUR 135.3 billion with the one million loans, grants, and other financing that the bank provided in Germany amounting to EUR 106.4 billion in total.