Interview with Gudrun Gumb (Vice President, KfW Bankengruppe)
Could you describe your position in the KfW Bankengruppe?
I have been working for the KfW for more than ten years. At the moment I am responsible for KfW European Affairs – we have the relationship management with European institutions on one hand and also with the member countries of the European institutions and their promotional banks, for example. It is very important than this relationship management is dealing with energy and climate protection issues – I am responsible for that. One of my missions is to exchange experience with our partners on one hand, on the other hand to make clear, what the KfW activities in that field are.
KfW Bankengruppe was very successful with promoting the energy efficiency measures. Could you please say few words about your program and its development in Germany?
In Germany we started thinking about energy saving and energy conservation after the first oil crisis, we had the first Energy conservation low in 1978. The KfW started to be active on that field in 1980´s, when we had a mandate to rebuild the Eastern Germany. Then we did a lot of promotion at the panel bloc buildings and there we launched the first program focused on promotion of energy efficiency in buildings. So, we started step by step. In 2001 we had money from the mobile phone licenses that the government got and put it into the program Residential energy efficiency, which started already in 2001. In 2006 we had the first relaunch of that program – the government decided to put additional money to the program, which really helped to push the program forward and rise significantly. The next relaunch was in 2009, where we adjusted the program to the new regulations, which had been made stricter. Than the program was incorporated into the Recovery program after the financial crisis, since we have learned previously that the program not only saves the CO2 emissions but is also creates new jobs, etc. This is where we are standing now. So it was a long development, over the years we refined the program step by step.
You mentioned the program development and changing criteria. Was it only about making the requirements stricter or also about the used methodology?
In the beginning we just started with just promoting single parts measures – e.g. promoting the insulation of the building envelope or the roofs, etc. In 2006 we introduced measures defining very exactly the energy efficiency criteria, which had to be fulfilled for each building part. In 2009 we changed this methodology completely and started to apply more comprehensive approach – the focus is not given on individual parts of the building but on the whole building. So, the whole building has to fulfill defined energy efficiency criteria. These criteria are laid down in the EnEV (German Energy Conservation Ordinance) and we took them as the measure, or the baseline for our promotion criteria – this was a big change.
The program is devoted to the residential sector only?
Yes, the focus of the program is exclusively promoting energy efficiency in residential sector – both for new constructed houses as well as for the existing buildings.
So it is prepared for individual home owners? To help them promote energy efficiency measures?
It is prepared for everybody who wants to invest in energy efficiency in buildings, no matter if it is an owner of an individual single house, owner of a panel block building or housing company or something like that. The share take up, roughly, is like this: one third – the private owners of single family homes, one third – private landlords, one third – housing companies. And this is exactly the structure of the residential building portfolio in Germany.
And the program was, and is, very successful…
The program has been running for more than 10 years, I think we are quite successful – so far, almost 10 % (2,1 millions) of the total numbers of existing housing units (built before 1978 and thus requiring large refurbishment) were reached somehow throughout the program. The aggregated commitment volume was 45 billion EUR over these past 10 years. But German has 40 million buildings so we still have a way to go.
What would you recommend to us, whathelps and whatdoes not?
First of all – very important is just to know that the program has to be developed step by step. We have been working on our program for about 20 years and the success does not come over a night. For us it was about 10 years of preparations before we started in 2001 with a marketing campaign. Both require constant work – the program as well as the marketing. What we learned, was also that the branding is very important, because the energy efficiency issue is very complex. Having brand makes it much easier to understand what it means. And having brand helps people to compare with each other and it is like creating a value on itself. We can see that energy efficiency could be something like a life style, and having a brand helps a lot – it can move people to invest.
The second thing which I would mention was our experience, over 60 years, and I think that was really a bonus for Germany to have such an institution to administering the program. So if there is a chance in Czech Republic to find an institution, which could fulfill the central role in administering and handling, would be very helpful. Very important is also a well-defined legislation, a directive, which can be referred to in the program. This helps a lot in developing the promotional program.
Which criteria you found to be best working?
First of all we have illegibility criteria, which are closely linked to the regulations. The standard is defined with different stages. The investment project goes as follows: first of all we give out the loan – we are covering the investments costs. And then the investor can do his investments and choose the energy efficiency level to be achieved. After he has finished, the achieved energy efficiency criteria are checked and compared with the predefined stages. The higher the level of energy efficiency is, the higher is the financial bonus – his loan amount is reduced by this bonus. The good thing is, that if the planed standard is not achieved, the investor can still apply for a lower stage. So he will still benefit from his effort, just with a lower bonus. This is very helpful, because investors do not have to fear to pay back the money, if they do not reach the highest stages. In the renovation program there are about six stages, so there is a wide range for the appliers. There could be a risk when you are aiming to the lowest standard, but if you plane to reach higher stage there is always lower stage to be reached. It is a safe way for the investors.
And what is the bonus, which can be achieved?
It is going from 2,5 % to 12,5 % for the highest standard – the higher is the energy efficiency, the higher the bonus is. In amounts it can be up to 50.000 Euro per housing unit for new homes and 75.000 Euro per housing unit for existing buildings.
So it is very motivating to achieve higher standards… Do you plan to continue in the program in the future or are you planning some major changes?
As it is said – do not change a running system when it is running, and this program is doing well from our perception. But of course some changes and improvements are coming – a standard about historical buildings has been just launched, and also this type of the building can be included in the program. Also, in 2012 are coming new regulations with tightened requirements and we will reflect them in the program.
KfW Bankengruppe
●Founded 1948 as Promotional bank of the Federal Republic of Germany
●Shareholders: 80% Federal Republic
●20% federal states
●Balance sheet total at 31.12.2011 EUR 495 billion
●Total Commitments in 2011 EUR 70 billion
●one of the largest financiers worldwide.