Photo of solar power plants in the desert.

    Energy Transition Funds

    The demand for investment in energy projects worldwide is enormous and, because of the huge need to catch up, it is particularly high in developing and emerging economies. According to the UN Climate Secretariat, these investments need to increase trifold by the early 2030s to at least 2.2 billion dollars a year compared to the current level of investment.

    In order to mobilise as much funding for this purpose as possible and use the funds in a targeted fashion, KfW Development Bank, acting on behalf of the German government, has set up a series of funds in the energy sector. Among the most important ones are:

    1. The AfricaGoGreen Fund (AGG), which promotes private investment in renewable energies and energy efficiency in the form of loans, guarantees and funding lines for projects, especially projects in West Africa. The investments are used to fund solar power systems, and energy-efficient buildings and equipment, for example.
    2. The foundation Clean Energy & Energy Inclusion in Africa (CEI), which mobilises private capital for renewable energy solutions in off-grid parts of sub-Saharan Africa. The foundation provides loans and awards grants so that people in rural parts of Africa are able to gain access to electricity, especially via mini-grids and small solar installations.
    3. The 4E initiative SSA, which is implemented by the private company Serengeti Energy and which generates electricity from renewable energy sources. It builds and operates small and medium-sized solar and hydropower stations in sub-Saharan Africa. KfW has made equity capital available in order to attract more investors and plans to sell its shares in the medium term.
    4. The Climate Finance Partnership Fund (CFPF), which combines public and private funding in order to finance climate-friendly projects like wind farms and renewable energy ventures via the local finance sector in South-East Asia, Latin America and Africa. Every euro in public funding mobilises at least four times as much in private capital.
    5. The Green for Growth Fund (GGF), which combines public and private funds. It awards loans via local banks to small and medium-sized companies and to households in order to promote energy efficiency and renewable energy. More than 50,000 loans have already been disbursed since it was founded in 2009, most of them in the Balkans and in Eastern Europe.