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- EU Institutions and Instruments
- Cooperation Between the EU and Latin America
- European Programmes
- German Funding Possibilities
4. German Funding Possibilities
4.1. Kreditanstalt für Wiederaufbau, KfW (Reconstruction Loan Corporation)
Goal
The Reconstruction Loan Corporation (KfW) acts as a subsidy bank for the German economy and works as a development bank for developing nations on behalf of the federal German government.
In collaboration with the Federal Ministry of Economic Cooperation and Development (BMZ), KfW finances investments and consulting services for specific projects within the framework of this financial collaboration to set up economic and social infrastructures, a business economy, and to protect the environment and natural resources in developing nations. The financing comes in the form of low-rate credit and subsidies. Currently, KfW is promoting some 1,800 projects in 100 countries in the framework of governmental agreements between the German government and the governments of the various partner countries.
In light of the fast-growing energy consumption in the emerging and developing nations, KfW has decided to strengthen its investments in renewable energy sources.
The KfW environmental program
The KfW environmental program finances long-term environmental protection measures at a very low interest rate. The particular benefit for borrowers is that the interest rate is set for up to 20 years, thus providing a safe basis for calculations for projects.
Who is eligible?
German and foreign business companies (producers, trade professionals, retailers, agricultural and forestry firms, and other service companies)
Companies, in which the public sector, churches and charity organizations have holdings.
The KfW program is also available outside Germany: all over the world when German companies make the investments.
What is subsidized?
Measures
for efficiency and the use of regenerative energy sources
to reduce air pollution
to improve soil and protect water
to manufacture innovative, environmentally friendly products
To what extent are projects financed
The credit generally does not exceed 5 million Euros
The financing share of KfW: between 2/3 and 3/4 of the investment costs that are eligible for subsidies
Credit periods
The credit period is generally up to 10 years. For long-term investments (such as waste incineration plants) up to 20 years
Terms and conditions
For credit for up to 10 years, the interest rate is fixed
The interest rate as of 24/03/03 4,6 % effective
Amount paid out: 100%
Commitment commission: 0.25 % per month, starting on the month after the date of commitment for credit not yet distributed
Two years of capital repayment holiday
Contact
Kreditanstalt für Wiederaufbau
Palmengartenstrasse 5-9
60325 Frankfurt
http://www.kfw.de
email: info@kfw.de
4.2. German Investment and Development Corporation
Goal
The German Investment and Development Corporation (DEG) is a specialist in long-term financing of projects and companies. It provides consulting to private companies and finances their investments in Africa, Asia, Latin America and central and eastern Europe. The DEG has worked with 950 companies and financed a total of 4.2 billion Euros up to now.
In Mexico, small and mid-size companies usually have great difficulties finding long-term financing through borrowing hard currency. During the Mexican banking crisis, local commercial banks were very careful and preferred established companies in granting credit. The foreign commercial banks are very reluctant about long-term loans due to the Latin American crisis.
In Mexico, the DEG has projects with 11 companies with a financing volume exceeding 50 million Euros. It aims to assist German investors further, facilitate the access for small and mid-size companies to long-term financing, and set up a holding portfolio. In the course of consulting for German companies interested in cooperation, the DEG works closely with the German-Mexican Chamber of Commerce (Camexa).
One of the DEG's focal points is the expansion of finances and capital markets. Local financial institutions are supported and their offers of energy services expanded. The small to mid-size companies in the various countries then have access to capital via this financial institution.
In June 2001, the DEG was integrated in the KfW as an independent subsidiary.
Start-up programme
On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), the DEG supports foreign specialists trained in Germany who want to start up their companies in their home country.
With this program, the DEG can offer foreign entrepreneurs consulting and long-term loans to set up their company abroad. It thus supports people who are able to make significant contributions to the economic development of the DEG's partner countries.
The DEG works with local subsidy banks in 8 partner countries. The entrepreneurs can get loans up to 250,000 Euros and guarantees from local banks.
Who is eligible?
Foreign entrepreneurs trained in Germany
What is subsidized?
Loans for start-up companies
To what extent are projects financed?
Credit up to 250,000 Euros
Credit periods
Generally from 4 to 10 years
Terms and conditions
Market-oriented, with fixed or variable interest rate
Contact
Deutsche Investitions- und Entwicklungsgesellschaft mbH
Belvederestr. 40
50933 Cologne
http://www.deginvest.de
email: deutschemarkt@deginvest.de
4.3. Hermes Kreditversicherung
German companies can insure their exports from economic and political risks before and after shipping. The "Hermes Guarantee" can be granted if the criteria for subsidy eligibility are met and the financial risk is reasonable. Eligibility is given if jobs are at stake, structural considerations are an issue, and foreign policy goals play a role in addition to the general export interest. Ecological, social, and development policy aspects are increasingly taken into consideration.
To insure export credit, fees are charged based on the type, scope, and duration of a business deal and the risk ranking of the importing country. In case of damage, the exporter shall cover a deductible of between 5 % and 15 %.
Cuba is ranked in the highest level (level 7). Mexico is ranked at level 3.
Contact
Hermes Kreditversicherungs -AG
Friedensallee 254
22763 Hamburg
http://www.hermes-kredit.com
email: 09inet@hermes-kredit.com
1 As these are realised on governmental level, it is not possible to fund individual projects which have not been included in the bilateral contract
2 Source: SCAD Plus: Development: introduction
3 The Service "International Fellowship" of the Directorate D The human factor, mobility and Marie Curie activities is engaged in international exchange of researchers, students etc.
4 The budget lines will also depend on the availability of funds
5 Please refer to the working programme for details available on: http://europa.eu.int/comm/energy/intelligent/work_programme/index_en.htm
6 For this reason, strong cooperation and coordination with the other Directorates General concerned and the international cooperation programmes is intended.
7 EFTA/EEA: European Economic Area: Island, Norway, Liechtenstein, Switzerland
8 ALTERNER includes a decision on cooperation with the Mediterranean Countries
9 New Independent States
European and German Funding for Latin American Energy Projects
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