German Federal Government and KfW Expand Energy Efficiency Funding for Businesses

The German Federal Government, in collaboration with KfW, is expanding its funding program for energy efficiency and resource efficiency in the commercial sector, starting November 1, 2021. This update aligns with the government's increased energy and climate targets, shifting the focus in the industrial sector towards greater resource efficiency.

The program offers improved conditions for energy efficiency projects and introduces new funding options for resource efficiency, which includes reducing material consumption within companies, as well as for transformation concepts aimed at achieving climate neutrality. Funding is provided through low-interest loans combined with redemption grants, supported by the Federal Ministry for Economic Affairs and Energy (BMWi).

Eligible measures cover a wide range of applications, including cross-sectional technologies, process heat from renewable energy sources, measurement and control technology, sensor technology, and energy management software. Companies of all sizes can apply for loans, with a maximum loan amount of EUR 25 million per project. To further incentivize investments, the maximum redemption grant has been increased to EUR 15 million, and the CO2 cap for SMEs has been raised.

In addition to KfW loans, companies can apply for direct investment grants through the Federal Office for Economic Affairs and Export Control (BAFA). Furthermore, grants of up to EUR 80,000 are available for companies to plan and implement their transition towards greenhouse gas neutrality. Applications open on November 1, 2021. KfW has committed approximately EUR 1 billion in promotional loans to date.