65 years of KfW Financing with a public mission

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65 years of KfW

Financing with a public mission

2

›

Promotional bank of the Federal Republic of

Germany

›

Established in 1948 as Kreditanstalt für

Wiederaufbau

›

Shareholders: 80% Federal Republic,

20% federal states

›

Headquarters: Frankfurt am Main

Branches: Berlin, Bonn and Cologne

›

Representative offices: 80 offices and

representations worldwide

›

Balance sheet total 2014: EUR 489,1 billion

›

Financing volume 2014: EUR 74,1 billion

›

5,518 employees (2014)

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Worldwide presence

81 representative offices

5,518 1948 1950 1960 1970 1980 1990 2000 2010 2012 2013 KfW employees Tiflis Jerewan Damascus Amman Kampala Windhoek Pretoria Lusaka Skopje Ankara Kiev Belgrad Priština Sarajevo Tirana Berlin Frankfurt Istanbul London Brussels Cologne Podgorica Bonn Juba Cairo Al-Bireh Addis Abeba Kigali Rabat Dakar Accra Ouagadougou Jaunde Bamako Cotonou Kinshasa Niamey Manila Baku Beijing Jakarta Kabul Islamabad Ulan Bator Hanoi Dhaka Bishkek Tashkent Dushanbe Bangkok Phnom Phen Kathmandu New Delhi Mumbai Moscow Lima La Paz Brasilia Managua Tegucigalpa Mexico-City São Paulo Quito Bogotá Guatemala-City New York Sanaa Maputo Daressalam Lilongwe Abu Dhabi Johannesburg Nairobi San Salvador Singapore Tunis Rangoon Bujumbura Vientiane Mazar-e-Sharif Chisinau

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A bank with a wide array of functions

4 We promote development Promotion of developing and transition countries

International business

We promote Germany

Promotion of housing construction and refurbishment, improved

accessibility and education Financing of municipal infrastructure

and global loans Promotion SMEs, business founders, start-ups

Domestic promotion

We support internationalisation International project and export finance

Promotion of environmental and climate protection

Mittelstandsbank Kommunal- und

Privatkundenbank/Kreditinstitute

KfW IPEX-Bank KfW Development Bank, DEG

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KfW Development Bank as part of the KfW Group

We promote development Developing & emerging countries

International financing

We promote Germany Private clients SMEs Municipalities

Domestic promotion

We support internationalisation

Export & project finance

Support for the environment and climate protection

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Total portfolio end of 2014 –787 mln. €

KfW in Armenia -Overview

50%

26%

22%

1%

Funds by Sector

Energy

Municipal Infrastructure

Financial Sector Development

Protection and Management of

Natural Resources

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KfW in Armenia - Portfolio

Total Commitments 1998 - 2014 : ca. 787 mln. EUR

Financial Sector

SME Refinancing Phase I–IV

Establishment of Deposit Guarantee and Credit Guarantee Fund

Agricultural Program I - III Housing refinancing Phase I - III

ACBA bank promotional loans I & II

Municipal Infrastructure:

Rehabilitation of water systems (Armavir, Gyumri, Vanadzor) Solid waste project (Vanadzor) Reconstruction of Kaps Reservoir

Energy:

Rehabilitation of power transmission Renewable Energy Program I – III promoting small hydropower plants through banking sector

Rehabilitation of Vorotan HPP

Rehabilitation of ArmRosGazProm‘s gas supply network

Caucasus Transmission Network I,II

Energy Efficient Rehabilitation of Schools

Studies and Experts

Funds (bilateral):

Total: 4 mln EUR

Health:

Tuberculosis Program Total: 6 mln EUR

Nature Protection

(bilateral):

National Parks Arpi, Shikahogh

Total: 10.5 mln EUR

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---- KfW in KfW in KfW in KfW in ArmeniaArmeniaArmeniaArmenia

----Regional project

overview

Energy sector

Municipal infrastructure

Financial sector

Protection & management

of natural resources

Health

Projects in preparation or

implementation

Finished projects

Kamo Vorotan Kaps Reservoir

Apri National Park Alaverdi

Shikahogh State Reserve Gyumri Vanadzor Yerevan Armavir

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Challenge

› Bad general condition of the building structure, insulation as well as lighting- and heating system › Energy costs are highest non-salary cost for schools › due to budget constraints, many schools reduce their

energy consumption by lowering temperature during winter time substantially, harming the educational process and the substance of the buildings.

Energy Efficient Rehabilitation of Schools

Approach

› modernization of 15-25 schools

› Implementing energy efficiency measures accompanied by TA and Training measures to ensure sustainable operation and maintenance

Volume of financing KfW: EUR 15 m Total: EUR 18-19.5 m Donors: BMZ (EUR 1.0 m) E5P (EUR 2.0-3.5 m planned) Impact

› Improved learning environment › Increased energy efficiency

› Reduced energy consumption and CO2 emission relative to the necessary baseline consumption › Replication of concept and set up possible

Information

›

Financing of a energy efficiency measures accompanied by generals structural and comfort measures

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Challenge

› Increased energy demand

› Infrastructure which has to a large extent reached the end of its technical life

› No fossil fuels

› Expensive imports of gas, oil, coal and uranium

Caucasus Transmission Network Phase I

Enhancing Regional Integration

Approach

› Financing the connection of the Armenian and the Georgian power grid

› Training and capacity building measures to ensure sustainable operation and maintenance

Volume of financing KfW: EUR 85 m Total: EUR 134 m Donors: EU NIF (EUR 10 m) EIB (EUR 10 m) Impact

› Improved energy infrastructure › Security of energy supply

› Enhanced power export and transit potential

Information

›

Financing of a High Voltage Direct Current (HVDC) back-to-back converter station in Armenia

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Challenge

› No fossil fuels; water and nuclear power are the basis for the country's energy supply

› Expensive imports of gas, oil, coal and uranium

› Potential for generating energy using domestic sources remains untapped

Information

›

Financing for the construction and rehabilitation of approx. 50 small hydropower plants

›

Close cooperation with WWF concerning the assessment of environmental risks

Small Hydropower Plants in Armenia

Using natural resources efficiently

Approach

› Financing of private investments in small hydropower plants via the central bank and commercial banks

› Technical and financial advisory for investors and banks

Impact

› CO² savings

› Substitution of imported energy sources › Stabilization of the power supply in Armenia

Volume of financing:

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12

Energy Sector

timeframe mln. EUR

Completed ,ongoing as well as planned projects

396,2

Emergency Energy Sector Support Program

Partial rehabilitation of Kanaker (Yerevan) 1996-2012 18,00

Power Transmission Rehabilitation

Rehabilitation and stabilization of energy supply at Vanadzor, Kamo, Alaverdi

and Gyumri Substations 1998-2012 29,00

Renewable Energy program I - III

Financing Rehabilitation and Construction of small scale hydropower plants

through German-Armenian-Fund (GAF) 2004- ongoing 64,00

Rehabilitation Vorotan

hydropower plant Rehabilitation of Vorotan hydropower plant 2009-2012 51,00 Rehabilitation gas supply

by ArmRosGazprom Increasing quality and reliability of ArmRosGasprom’s gas network 2009-2012 50,00 Caucasus Transmission

Network I

Connection of the Armenian electricity grid with Georgia via BtB-Station in Ayrum

2014 – ongoing

85,2

Caucasus Transmission

Network II New substation in D’dmashen and 400 kV line to BtB-Station Ayrum start in 2015 83,0

Energy Efficient

Rehabilitation of Schools

Modernization of Schools (Implementing Energy Efficiency measures

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Image

Challenge

› High water losses due to outdated and obsolete infrastructure

› Unfavourable financial situation of water utilities and

consequently lack of funds for maintenance and necessary investments

Information

› Provision of investment loans with reduced interest rates (approx. EUR 121.5 million), including co-financing of EIB

(EUR 25.5 million)

› Investment grant for pilot projects in small villages , MC fee, construction of the first treatment plant in the region

NIF (EUR 15 million)

› TA grant for the management contracts and other institutional support measures , KFW (EUR 10.7 million)

Drinking Water Supply in Armenia

Provision of drinking water under a PPP approach

Approach

› Rehabilitation/construction of physical infrastructure to ensure the continued and hygienically safe supply of drinking water countrywide (with the exception of the capital Yerevan)

› Buildup of a functioning, efficient water utility that covers its operating costs with the help of an international operator (PPP)

Impact

› Improved drinking water supply for approx. 400.000 people in the project region (continuity and quality)

› Increase in the collection rate (nearly 100% in all areas) › Significant improvement in coverage of operating costs

Armenia

EUR 147.2 million Including external finance

and grants

Donors:

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Image

Challenge

› Dilapidated/ missing irrigation infrastructure and variable water levels in Akhouryan River

› No sustainable water management and the effects of climate change increase water scarcity

› Low productivity levels of farmers, negative impacts on environment and biodiversity

Information (Contribution of FC)

› Phase 1. Provision of investment loans with reduced interest rates (EUR 50 million) and financing of the trainings and capacity building via grants (EUR 2 million) › Phase 2. Construction of pilot drip irrigation schemes 750 ha

, irrigation network in 800 ha (EUR 18.5 to be signed in 2015)

› Phase 3 is envisaged

IWRM in Armenia

Integrated Water Resource Management at Akhouryan River

Approach

› Construction of an irrigation reservoir in Shirak with a capacity of 25 million m³ (project phase 1)

› Rehabilitation/ construction of selected secondary and tertiary irrigation canals (project phase 2)

› Introduction of efficient irrigation technologies on pilot areas (project phase 2)

› Development, implementation and monitoring of

sustainable water management plans agreed upon with all water user groups

Impact

› Increase agricultural productivity

› Reduce climate change vulnerability of target group (approx. 41,700 people)

› Protect local ecosystems and biodiversity

Armenia

EUR 52 million

Donors:

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15

Municipal Infrastructure

Timeframe Mln.

EUR

Completed and ongoing projects as well as planned projects, KfW contribution only

199.7

IDP Emergency Support Support of IDPs 1995-1997 2,5

Rehabilitation Communal

Infrastructure I Rehabilitation of water and wastewater system in Armavir 2000 13.7 Rehabilitation Communal

Infrastructure II, Phases I

Rehabilitation of water and wastewater systems in Lori and Shirak (Vanadzor

and Gyumri) 2006 25

Rehabilitation Communal Infrastructure II, Phases II

Rehabilitation of water and wastewater systems in Lori and Shirak (Vanadzor

and Gyumri) 2009 34.5

Rehabilitation Communal

Infrastructure II, Phases III Rehabilitation of water and wastewater systems in Lori ,Shirak, Armavir

2013

ongoing 33.5 IWRM Akhuryan project Integrated Water Resource Management, Reconstruction of Kaps Reservoir 2013

ongoing 52 IWRM Akhuryan project

Phase 2

Integrated Water Resource Management, Reconstruction of Kaps Reservoir,

Irrigation To be

signed 18.5 Vanadzor Solid Waste Project Construction of new land field and conservation of the old one plus supply of

equipment in Vanadzor

To be

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Challenge

› High demand for renovations of residential buildings that were built under Soviet times

› Lack of finance to long term local currency funding

Information

› Three projects that amount to 32 mln. EUR

› Additional support by means of training and institution building activities (EUR 1 mln. )

› New phase housing Phase IV currently under preparation (20 mln. EUR)

Housing Finance in Armenia

Phase I - IV

Approach

› Introduction of long term housing loans for renovations of residential buildings or for purchase of new housing units for lower and middle income households

› Local currency funding

Trainings for participating banks and mircofinance institutions in order to grant high quality of portfolio

Wirkungen

› Creation of an access to finance of long term local currency funding for lower to middle income households › Increase of living conditions of these households

› Positive effects on the construction sector

Armenien

Volume:

32 mln.

Donor:

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17

Financial Sector

timeframe Mln.

EUR

Completed and ongoing projects as well as planned projects

170

SME Refinancing (Phase

I–IV) Promoting development of SME through refinancing loans 1998-2010 19 Establishment

Credit Guarantee & Deposit Guarantee Fund

Establishment of Credit Gurantee and Deposit Gurantee Fund 2002-2012 8

Program Housing Finanse I-III

Housing financing Phase I & II through German-Armenian Fund (GAF) ,

Phase III through National Mortgage Company (NMC) 2005 54 Support of the banking

sector

Promotional loans to ACBA and equity participation in ProcreditBank for

micro financing and SME financing especially in rural areas 2006 37

Agricultural program Supporting agricultural sector by refinancing SME through GAF, Phases

I and II 2011 31

Energy Efficiency in

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Challenge

› The suspected area is an important breeding habitat & of migrating birds

› Overgrazing threatens the eco system by destroying natural vegetation and overfertilization of bodies of water

Information

› Provision of grant resources (2.2 Mln. €)

National Parks

Establishment of Lake Api National Park

Approach

› Development of nature conservation strategy

› Sustainable development measures for local residents

› Eco - management across national boundaries

Impacts

› Preservation of regional biodiversity and breeding habitats by sustainable wide-area management

Armenien

Volume:

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19

Nature Protection

timeframe mln EUR

Completed and ongoing projects as well as planned projects

10,45

Arpi National Park Establishment of Arpi National Park Ab 2009 2,20

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