Invest in the everlasting. Green Bonds – Made by KfW. · Green Bonds - Made by KfW / July 2018...

Invest in the everlasting.Green Bonds – Made by KfW.

Haftungsausschluss / Disclaimer

Die in diesem Dokument enthaltenen Informationen stellen kein Angebot zum Kauf vonWertpapieren in den USA dar. Wertpapiere dürfen in den USA nur mit vorherigerRegistrierung oder ohne vorherige Registrierung nur aufgrund einer Ausnahmeregelungverkauft oder zum Kauf angeboten werden. Ein Angebot zum Kauf von Wertpapierenwird in den USA nur auf Grundlage eines Prospekts erfolgen, der von der KfW zurVerfügung gestellt wird und detaillierte Informationen über KfW, ihre Geschäftsleitung,ihre Jahresabschlüsse sowie Informationen über die Bundesrepublik Deutschlandenthalten wird.

The information contained in this document does not constitute an offer of securities forsale in the United States. Securities may not be offered or sold in the United Statesabsent registration or an exemption from registration. Any offering of securities in theUnited States will be made by means of a prospectus that may be obtained from KfW andwill contain detailed information about KfW and its management, financial statements andinformation about the Federal Republic of Germany.

Green Bonds - Made by KfW / July 2018 2

Agenda

Green Bonds - Made by KfW / July 2018

1 KfW – commitment to sustainability

2 Green Bonds – Made by KfW

3 Green Bond issuances

4 Key figures on KfW and its funding programme

5 Green Bond portfolio of KfW

3

KfW – commitment to sustainability


KfW in brief

› The promotional bank of the Federal Republic of Germany, established in 1948 as a public law institution.

› Benefits from explicit and direct statutory

guarantee and institutional liability from

the Federal Republic of Germany.

› Regulated by the “Law concerning KfW”

and exempt from corporate taxes.

› Zero risk weighting of KfW’s bonds.(1)

› Supervision by the German Federal

Ministry of Finance and the German

Financial Supervisory Authority “BaFin”.

› Subject to certain provisions of German

and European bank regulatory laws by

analogy, in large part with effect from

January 1, 2016.

80%

20%

Shareholders

Bonn

Federal Republic

of Germany

Germanfederalstates

Berlin

Rating

Credit Aaa AAA

Moody‘s S&P

Sustainability

(1) According to the standardized approach of the Capital Requirements Regulation (CRR)

Frankfurt

AAA

Scope

5

TOP 2out of

30out of 343AAA # 5

MSCI Sustainalyticsimug

“Prime”oekom

66Green Bonds - Made by KfW / July 2018

KfW Group’s business activitiesKfW aims for sustainable improvement of the economic, social, and ecological conditions of people’s lives. New business 2017: EUR 76.5bn

SME BankPromotion of small- and medium-sized enterprises, business start-ups and other commercial clients in

Germany

Municipal and Private Client Bank/ Credit

Institutions

Housing programmes, environmental and climate protection, educational finance for private clients in Germany as well as

financing for public clients (e.g., municipalities, regional promotional banks)

Export & project finance

Customized financing for exports and project & corporate financing world-wide

Promotion of developing countries

& emerging economies

KfW’s public (KfW Development Bank) & private sector (DEG) development cooperation activities

Financial markets ABS & Green-Bond-Portfolio

29%

39%

18%

13%

2%

Based on year-end 2017 data.

Environment investment ratio:

DomesticSME ratio:

43% 44%

New business for environment and climate protection in % of total new business volume.

New business for SMEs in % of total new domestic business volume.

Germany and Europe face challenges from megatrendsKfW is fully committed to the concept of sustainable development


For us, entrepreneurial activities and social responsibility go hand in hand. Through its financing activities, KfW supports the improvement of economic, ecological and social living conditions at the local, national, European and global level with a view to contributing to sustainable development. For us, sustainability means the establishment of viable, self-sustaining economic structures.

Globalisation / technical progressGlobalisation / technical progress

DemographicchangeDemographicchange

Environmental and climate protectionEnvironmental and climate protection

7


Sustainability approach at KfW

Lending business

KfW Group

KfW – Sustainability principles

Declaration on respect for human rights in KfW’s business activities

Data based on new business 2017.

Governance & CSRSustainable banking

operations

Demographic

change

Environment and

climate protection

Globalisation /

technical progress

Trend-independent

promotional topics

11%

43%

17%

29%

In-house environmental

protection

Responsible

procurement

Stakeholder dialogue &

staff

Sustainable portfolio

management

Public Corporate

Governance Code

Broad sustainability

management system

Prevention of corruption and

money laundering

KfW Foundation

8

1. Pillar: Lending business

Quelle: KfW

New business environment and climateprotection 2012-2017

in EUR bn

KfW is one of the world’s largest financiers of environmental investments withmore than EUR 280bn invested over the last 10 years.


0%

10%

20%

30%

40%

50%

0

10

20

30

40

50

60

70

80

90

2012 2013 2014 2015 2016 2017

New business other primary targets

New business environment and climate protection

Environment investment quota

0

5

10

15

20

25

30

35

Environment andclimate protection

Demographicchange

Globalisation andtechnical progress

Trend-independentpromotional topics

New business 2017 by primary targetin EUR bn

9

2. Pillar: Sustainable banking operationsIn-house environmental protection

Internal sustainability & environmental management system since 1994

› Energy consumption and green electricity

› Energy-efficient buildings

› Business travel and commuting

› Water and wastewater

› Recycled paper

› Charging station for electric cars and fleet modernisation

Fields of activities

› Comprehensive sustainability reporting

on KfW’s website.

Reporting

› Sustainability report since 2006

› Environmental reporting/accounting

since 1998KfW GHG emissions (t) 2013 2014 2015 2016

Energy consumption 8,479 6,811 6,294 6,734

Total business travel 8,113 9,446 7,394 7,411

Total 16,592 16,257 13,628 14,145

Ø per employee 2.5 2.6 2.2 2.1

100% of KfW’s GHG emissions from energy consumption and business travel are offset by purchasing Clean Development Mechanism certificates.

Awards

Best Tall Building in the World 2011

Green Building Frankfurt 2009

Frankfurt 2014


Source: KfW

10

11

2. Pillar: Sustainable banking operationsSustainable investment approach for KfW liquidity portfolio

KfW's liquidity portfolio Sustainable investment approach for the liquidity portfolio

Purpose› Securing KfW's liquidity

› ~EUR 25bn

Strategy

› Pure fixed income portfolio

› Buy-and-hold strategy

› Exclusively investment-grade bonds

Asset classes

› Government bonds

› Covered bonds

› Financials

› Bonds issued by government-related issuers and agencies

› ABS

ESG-Integration

› Only investments in bonds of issuers whose sustainability score is among the best 80% of the respective sector

› Sustainability assessment of issuers performed by an external provider (Sustainalytics)

Exclusion criteria

› Investments only in bonds from issuers who are in compliance with the exclusion list

Exclusion criteriasubstantially based

on the IFC ExclusionList

Engagement

› The sustainabilityrating of an issueris crucial for a potential bondinvestment

› Dialogue with theissuers on a regular basis

Green Bonds - Made by KfW / April 2018


3. Pillar: Governance

Law concerning KfWF

ed

era

l F

inan

cia

l S

up

erv

iso

ry A

uth

ori

ty (

BaF

in) Regulation concerning analogous application of bank regulatory law

Executive Board

Prevention of

money launderingLeg

al s

up

erv

isio

n b

y F

ed

era

l M

inis

try o

f F

ina

nc

e

in c

onsu

ltation w

ith t

he

Fe

de

ral M

inis

try f

or

Ec

on

om

ic A

ffa

irs

an

d E

nerg

y

Business activities

Board of Supervisory

Directors

• Presidial and Nomi-

nation Committee

• Remuneration

Committee

• Audit Committee

• Risk and Credit

Committee

Code of conduct for

Executive Board and

employees

Data protectionPrevention of

corruption

Fe

dera

l C

ou

rt o

f A

ud

ito

rs

KfW Bylaws

Public Corporate Governance Code since 2011

12

Green Bonds – Made by KfW

Increasing investors’ willingness to engage on environmental and social topics

› EUR 232bn total green bond market volume. This corresponds to approx. 0.3% of total bond markets.

› Market diversification with regard to issuers (banks, corporates, municipalities, sovereigns), countries (e.g. China)

and products (Green ABS, Green Covered Bonds).

› Additional players entering the market (rating agencies, stock exchanges, index provider).


2

10

24

32

68

100

0

20

40

60

80

100

120

2012 2013 2014 2015 2016 2017

Total issuance of Green Bonds (in EUR billion)

Source: Bloomberg

47%

23%

8%

7%15%

Europe

China

North America

Supranational

Other

41%

26%

20%

10%

2%1%

Corporates

Banks

Supras/Agencies

Sovereigns

Muni/Province/City

Covered Bonds

Green Bonds – Made by KfWKey elements


Ambition• To boost responsible

investment in capitalmarkets.

• To strengthen sustainabilitydialogue with investors.

• To attract new investors.

• To give impetus to the greenbond market via new qualitystandards and increasedliquidity.

Drivers• KfW’s holistic sustainability

approach.

• KfW’s long standingexpertise in environmental financing.

• KfW’s support of the UN Principles for ResponsibleInvestment.

• Growing green bondinvestor demand.

Goals• To raise additional funds for

environmental projects.

• To enhance capital marketsinfrastructure to financeenvironmental projects.

• Active contribution to thefight against climate change.

15

Green Bonds - Made by KfWKfW’s Green Bonds – an innovative product


1

High credibility

› Independent 2nd opinion for KfW’s Green Bonds by the experienced, non-profit research center CICERO(3)

› Green Bond rating "b+" by sustainability rating agency oekom research› KfW is among global ESG(4) leaders› Excellent credit quality, large size

Environmental and social impact

› Estimated GHG reduction of 800 tons(1) p.a. per EUR 1 million green bond investment› Creation and protection of jobs› Reduction of energy imports to Germany and fossil fuel burning costs› Environmental impact evaluated by an independent external research institution

(since 2014 ZSW(2))

2

Cicero graded KfW Green Bonds as"dark green"which is the bestgrade achievable

(1) Average value for 2010-2014 based on ZSW evaluation. Current and future impact might differ(2) ZSW: Center for Solar Energy and Hydrogen Research Baden-Württemberg(3) CICERO: Center for International Climate and Environmental Research Oslo(4) ESG: Environment, Social, Governance

16

Within its “Renewable Energies – Standard” programme, KfW provides financings forfacilities to generate electricity or electricityand heat in combined heat and power stations from these renewable sources:

Qualifying assetsKfW promotional programme “Renewable Energies – Standard”

biogas/-mass

wind energy

solar energy

hydropower

› Private individuals and non-profit organisations which feed the generated electricity/ heat into the grid

› Self-employed professionals/farmers› German and non-German enterprises majority-owned by private individuals› Enterprises in which local authorities, churches or charities hold an interest

Who receives financings?

› Long-term, low-interest loans› Interest rate fixed for ten years, or even longer for the entire term› Repayment-free start-up period› Up to EUR 50 million loan amount and 20 years repayment term› Financing share of up to 100% of each project’s investment cost› Risk-adjusted interest rate

What makes thisKfW loan attractive?


Qualifying assetsKfW’s commitments for environmental investments 2017: EUR 33,217mn(1)


Renewable Energy

Energy Efficiency

Others

Domestic International2017 in EUR bn

2.74.2

21.1 1.4

0.8 3.1

(1) Total volume of KfW Group; consolidated by commitments in export and project finance which were refinanced through programmes of SME bank

Qualifyingassets for KfW green bonds

Capital Markets

Green Bond Portfolio

thereof

Renewable Energy: 13%

Energy Efficiency: 68%

Others: 20%

0.3

18

Project examplesKfW promotional programme “Renewable Energies – Standard”

Wind farm"Dretzen II" by NOTUS energyGmbH

Project

PV systemby FEH

Solarpark 6GmbH

Dretzen, Bandenburg, Germany

Location

Senftenberg, Brandenburg,

Germany

2017 Completion 2016

34,000 MWhRenewable

energyproduced

1,481 MWh

8,500 households

Supply areaOwn

consumption

15,799 tonsp.a.

EstimatedGHG

reductions890 tons p.a.

EUR 22.5mn (KfW share:88%)

Total projectcosts

EUR 2mn (KfW share:

75%)


Project examplesKfW promotional programme “Renewable Energies – Standard”

Wind farmBendorf -Oersdorf

Project

PV sytem byHP-T

HöglmeierPolymer-

Tech GmbH

Rendsburg-Eckenförde, Schleswig-Holstein

LocationRaitenbuch,

Bayern

2014 Completion 2014

39,000 MWhRenewable

energyproduced

945 kWh

11,000 households

Supply areaOwn

consumption

32,379 tonsp.a.

EstimatedGHG

reductions127 tons p.a.

EUR 27.9mn (KfW share: 75%)

Total projectcosts

EUR 420,000 (KfW share:

95%)


CustomerCustomer’s

bank

Capital markets

• Liquid bonds

• New investors

• Grow market out of the niche (multi-currency approach)

KfW Green Bonds

• Requests for disbursements 2017: EUR 4.1bn

• Green commitments overall 2017: EUR 33.2bn

KfW-Programme“Renewable Energies” (1)

Projects 2017wind energy (86%) solar energy (12%)

other (2%)

Qualifying assetsTransparent tracking(separate account)

Quarterly reporting

Externalevaluation:• 2nd opinion

(CICERO)• Impact

measurement• Green bond

rating (oekom)

amounts matching requests for disbursements

(1) „Renewable Energies - Standard“ Programme


Green Bonds – Made by KfWProven business model for KfW’s domestic promotional programmes

21

Green Bonds – Made by KfWManagement of proceeds

Green bonds in several currenciesand sizes

Net proceeds

fromissuance

Separate euroaccount on first-in first-out basis

Green bondaccount

Proceeds used in projects of standardrenewable energyprogramme

„RenewableEnergies –Standard“

programme

Transparent tracking


Amounts matching the requests for disbursements under KfW’s programme “Renewable Energies – Standard”will be deducted from the balance of the separate internal account on an ongoing basis (first in, first out).

Proceeds envisaged to be used within the same calendar year as issuance.

Any KfW Green Bond will be reported as fully allocated when the cumulated requests for disbursements total the net proceeds from the issuance. KfW expects a full allocation by the end of the year of issuance the latest.

The volume-weighted average maturity of „Green Bonds – Made by KfW“ of each calendar year will not exceed the respective prior year’s average duration of loan commitments under the “Renewable Energies –Standard” programme.

22

Green Bonds – Made by KfWReporting


Sign up for our newsletter service at

www.kfw.de/greenbonds

Green bond webpages(www.kfw.de/greenbonds)

Investor newsletterFinal impact report

(third party evaluation)

Green bond reporting

KfW's quarterly reporting contains information about:

› Estimated environmental and social impact of the green bond related projects (ex-ante)

› Net proceeds of KfW's Green Bonds compared with requests for disbursements under the related loan

programme (“Renewable Energies - Standard”)

› Requests for disbursements distributed by type of use and region

23


Green Bond Principles"Green Bonds – Made by KfW" in line with the Green Bond Principles

Green Bond Principles

Requirements1)Green Bonds – Made by KfW

Use ofProceeds

› Green projects aiming to address areas

such as climate change, natural

resources depletion, loss of biodiversity

and/or pollution control

› Renewable energy projects under KfW's programme

"Renewable Energies – Standard"

Process forProject

Evaluation andSelection

› Transparent decision-making process to

determine the eligible projects

› External review

› High level of transparency through proven loan-

programme "Renewable Energies – Standard"

› Independent 2nd opinion provided by CICERO2):

KfW green bonds achieved the best grade "dark green"

Management ofProceeds

› Traceable management of proceeds

within the issuing organization

› External review

› Net proceeds are allocated to an internal account

exclusively used for disbursements under the

programme "Renewable Energies – Standard"

› Independent 2nd opinion by CICERO2) and rating by

oekom3): rated KfW green bonds achieved b+ (good)

Reporting

› At least annual reporting on the use of

proceeds until full allocation

› Description of underlying assets,

disbursements and expected impact

› Quarterly reporting on the use of proceeds until full

allocation

› Final impact reporting for each year based on third party

evaluation

1) Voluntary Process Guidelines for Issuing Green Bonds, as published by International Capital Market Association, dated June 16, 2016 2) CICERO: Center for International Climate and Environmental Research Oslo 3) KfW EUR Green Bond 2014-2019 and KfW USD Green Bond 2014-2019 rated by oekom Research AG

24

Green Bond issuances


Green Bonds – Made by KfWHighlights of KfW’s green bond issuances

› KfW has been issuing green bonds since 2014 totalling EUR 13.5bn; market share of around 5%

› 2017: 4 bonds (+ 3 taps) amounting to EUR 3.7bn (5% of total funding)

› EUR, USD, AUD, GBP and SEK with potentially more currencies to come

› Large and liquid sizes in benchmark maturities

› Comparable to other KfW bonds regarding structure, pricing, rating

› KfW green bonds are eligible for the green bond indices "The BofA Merrill Lynch Green Bond Index", "Barclays MSCI Green Bond Index", "S&P Green Bond Index" and "Solactive Green Bond Index"

› Disbursement requests under the „Renewable Energies – Standard“ programme (2017)

wind (86%)

solar (12%)

other (2%)

Distribution by renewableenergy type

Geographical distribution

Germany(73%)France (13%)

Finland (4%)

Norway (3%)

Other (7%)

26

Green Bonds – Made by KfWIssuances


Green Bond ISIN Coupon Volume CCY Awards

KfW Green Bond EUR 2014/2019 XS1087815483 0.375% EUR 1.5bn €

KfW Green Bond USD 2014/2019 US500769GF56 1.75% USD 1.5bn $

KfW Green Bond AUD 2015/2020 AU000KFWHAC9 2.40% AUD 1bn A$

KfW Green Bond GBP 2015/2020 XS1268337844 1.625% GBP 1bn £

KfW Green Bond EUR 2015/2020 XS1311459694 0.125% EUR 1.5bn €

KfW Green Bond USD 2015/2020 US500769GU24 1.875% USD 1bn $

KfW Green Bond SEK 2015/2020 XS1333145040 0.586% SEK 1bn SEK


KfW Green Bond EUR 2016/2024 XS1414146669 0.05% EUR 1bn €

KfW Green Bond USD 2016/2021 US500769HD99 2.00% USD 1.5bn $

KfW Green Bond EUR 2017/2025 XS1612940558 0.25% EUR 2bn €

KfW Green Bond USD 2017/2020 US48245ACK51 1.66% USD 150mn $

KfW Green Bond USD 2017/2020 US48245ACL35 1.79% USD 200mn $

KfW Green Bond USD 2017/2022 US500769HP20 2.00% USD 1bn $



Outstanding green bond volume:

EUR 13.5bn

27


Imp

act

of

EU

R 1

millio

n

investm

en

t:

800tons

of GHG emission reductions (CO2-equivalents) per

annum

69,000EUR

of savings on energy imports to Germany and fossil

fuel costs per annum

22jobs

created and/or secured (person years)

94,000EUR

of savings in external costs per annum

Values are based on numbers evaluated by ZSW and internal calculations. Savings in GHG emissions are based on "Renewable Energies – Standard" programme impact 2010 - 2014 in Germany. Savings for energy imports to Germany and in fossil fuels, saved/created jobs and savings in external costs are based on "Renewable Energies" programme impact 2010 - 2014 in Germany. Current and future impact might be different, especially for projects outside Germany.

Estimated Impact of "Green Bonds – Made by KfW"Environmental and social impact based on programme evaluation

28

Green Bonds –Made by KfWOverview on issuances and reporting


Green Bonds Reporting

› 2 Green Bonds issued in EUR and

USD

› Net proceeds from the issuances

totalled EUR 2.7bn

Use of proceeds

› Available for the full year ended

December 2014

Impact


December 2014; based on loan

programme evaluation by ZSW

2014

› 5 Green Bonds issued in AUD,

GBP, EUR, USD and SEK


totalled EUR 3.7bn


December 2015

› Will be disclosed once ZSW has

evaluated the loan programme for

2015

2015

Use of proceeds Impact

› 4 Green Bonds issued in SEK,

EUR, GBP and USD


totalled EUR 2.8bn


December 2016

› Will be disclosed once ZSW has

evaluated the loan programme for

2016

2016


29

› 7 Green Bonds issued in EUR,

USD, GBP und AUD


totalled EUR 3.7bn


December 2017

› Will be disclosed once a third

party has evaluated the loan

programme for 2017

2017


2014: Reporting on the Use of ProceedsFor the full year ended December 31, 2014


Green Bonds –Made by KfW

0 1 2 3 4 5

Total 4.1bn EUR

2.7bn EUR

Requests for Disbursements under KfW's "Renewable EnergiesProgramme – Standard" and green bond issue proceeds 2014

3.7 bn EUR

2 green bonds › KfW issued two green bonds in 2014 – in EUR and USD.

EUR 2.7bn› Net proceeds from the green bonds issued in 2014 amounted to EUR

2.7bn.

100% allocated

› As of December 31, 2014, 100% of the net proceeds from the green

bond issuances in 2014 were invested in KfW's programme

"Renewable Energies - Standard".

80% wind energy,75% in Germany

› 80% of the requests for disbursements were for wind energy, 17% for

solar energy and the remainder for biogas/-mass, hydropower and

others.

› 75% of the financed projects were located in Germany. 22% were

located in France, Sweden and the UK.

5% of total funding

› Green bonds account for 5% of KfW's total funding which totalled to

EUR 57.4bn.

wind (80%)

solar (17%)

biogas/-mass (1%)

hydropower(<1%)

other (2%)

Distribution of disbursements byrenewable energy type (2014)

Geographical distribution of disbursements (2014)

Germany(75%)

France(16%)

Sweden(3%)

UK (3%)

Other (3%)

30

1 Values are based on programme impacts in 2014 in Germany – with numbers evaluated by ZSW – and internal calculations; impact for projects outside Germany might be different.

2014: Reporting on the ImpactEnvironmental and social impact for the full year 2014 based on external evaluationby ZSW


Impact of EUR 1 million investment in “Green Bonds – Made by KfW” issued 20141:

Commitments under KfW’s programme “Renewable Energies –

Standard” in 2014

Number of loan commitments 4,805

Volume of loan commitments (EUR mn) 3,786

Thereof outside Germany (EUR mn) 1,001

Investments financed (EUR mn) 5,909


Average loan volume per commitment (EUR) 787,910

Average investment financed per commitment (EUR) 1,229,780

Average share of financing 64%

Installed electrical power supported in 2014 MWel

Pla

nt

typ

e

Biogas 5.5

Solid biomass 0.1

Photovoltaic energy 570.3

Hydropower 11.0

Wind energy onshore 3,082.5

Total 3,669.4

Annual electricity productionTWh

7.0

› 1,271 tons of GHG emission reductions (CO2-equivalent) p.a.

› EUR 67,155 of savings on energy imports to Germany and fossil fuel costs p.a.

› 25 jobs created and/or saved (person years)

› EUR 129,606 of savings in external costs p.a. (e.g. by avoiding environmental and health

damage)

31




0 1 2 3 4 5

Total 4.2bn EUR

3.7bn EUR

Requests for Disbursements under KfW's "Renewable EnergiesProgramme – Standard" and green bond issue proceeds 2015

wind (90%)

solar (8%)

biogas/-mass (<1%)

other (2%)



Germany(79%)

France(12%)

Finland(4%)

Italy (2%)

Other (3%)

5 green bonds› KfW issued five green bonds in 2015 – thereof three new currencies:

AUD, GBP and SEK.


3.7bn.

100% allocated





› With 98%, the majority of all requests for disbursements were related

to projects for the use of wind energy (90%) and solar energy (8%).


located in France, Finland, Italy, the UK, the Netherlands, Austria,

Canada and Ireland.

6% of total funding


EUR 62.6bn.

32

1 Values are based on programme impacts in 2015 in Germany – with numbers evaluated by ZSW – and internal calculations; impact for projects outside Germany might be different. Calculated impact accounts for KfW's financing share in Germany.





Standard” in 2015






Average loan volume per commitment (EUR) 1,477,781




Pla

nt

typ

e

Biogas 13.7

Solid biomass 0.5


Hydropower 8.3


Total 3,598.9


6.7

› 859 tons of GHG emission reductions (CO2-equivalent) p.a.




damage)

33




0 1 2 3 4 5

Total 4.2bn EUR

2.8bn EUR

Requests for Disbursements under KfW's programme "RenewableEnergies – Standard" and green bond issue proceeds 2016

wind (86%)

solar (13%)

other (1%)



Germany(79%)

France(12%)

Denmark(3%)

UK (1%)

Other (5%)

4 green bonds› KfW issued four green bonds in 2016 – thereof three new bonds

(SEK, EUR, USD) and one tap (GBP).


2.8bn.

100% allocated





› With 99%, the majority of all requests for disbursements were related

to projects for the use of wind energy (86%) and solar energy (13%).


located in France, Denmark, the United Kingdom, Finland, the

Netherlands, Croatia, Japan, Ireland, Austria, and Canada.

4% of total funding


EUR 72.8bn.

34

1 Values are based on programme impacts in 2016 in Germany – with numbers evaluated by ZSW – and internal calculations; impact for projects outside Germany might be different. Calculated impact accounts for KfW's financing share in Germany.





Standard” in 2016



Thereof outside Germany (EUR mn) 826



Average loan volume per commitment (EUR) 1,438,987




Pla

nt

typ

e

Biogas 0.9

Solid biomass -


Hydropower 1.78


Total 3,556.4


6.7

› 794 tons of GHG emission reductions (CO2-equivalent) p.a.




damage)

35



Requests for disbursements under KfW's programme "RenewableEnergies – Standard" and green bond issue proceeds 2017

wind (86%)

solar (12%)

other (2%)



Germany(73%)

France(13%)

Finland(4%)

Norway(3%)

Other (7%)

7 green bonds› KfW issued four green bonds in 2017 – thereof four new bonds

(EUR, USD) and three taps (GBP, AUD).


3.7bn.

100% allocated



"Renewable Energies - Standard"


› 98% of all requests for disbursements were related to projects for the

use of wind energy (86%) and solar energy (12%). 73%, the projects

financed were located in Germany. 27% of all requests for

disbursements were related to projects located in France, Finland,

Norway, Ireland, Denmark, Japan, the UK, Italy, Sweden, the

Netherlands and Croatia.

5% of total funding


EUR 78.2bn.

36

0 1 2 3 4 5


3,7bn EUR

Total 4.1bn EUR

Key figures on KfW and its fundingprogramme


Key financial figures of KfW Group (IFRS)Solid business performance

38

(1) In 2016, calculated for internal purposes based on the voluntary application of all material IRBA rules. In 2017, calculated based on the IRBA approach for a large part of the portfolio. For the remaining sub-portfolios KfW applies the CRSA approach until full IRBA approval.

2016 2017 Q1 2018

Business activities (in EUR bn) – for the period

Promotional business volume 81.0 76.5 18.9

Income statement key figures (in EUR mn) – for the period

Operating result before valuation & promotional activities 1,898 1,661 374

Consolidated profit 2,002 1,427 228

Consolidated profit before IFRS effects from hedging 1,769 1,192 238

Balance sheet (in EUR bn) – at the end of the period

Total assets 507.0 472.3 474.5

Equity 27.1 28.7 28.9

Volume of business 609.2 572.2 577.9

Key regulatory figures (in %)(1) – at the end of the period

Tier 1 capital ratio 22.3% 20.6% 20.8%

Total capital ratio 22.3% 20.6% 20.8%


Business performance

Total promotional business volumein EUR bn

› About 2/3 domestic and 1/3 international business.

› Slight decrease in 2017 as planned.

Total assetsin EUR bn

› Germany’s 3rd largest credit institution in terms of total assets.

Consolidated profitin EUR bn

› Decreasing profit in 2017 as predicted, but higher

than expected.

› Very good, but decreasing valuation result due to non-recurring effects.

Capital ratio (Tier I)in %

› BaFin approval as advanced IRBA institution since 6/2017.

› Decrease in 2017 mainly due to effects of the IRBA approval process.

465489

503 507472

2013 2014 2015 2016 2017

1.31.5

2.22.0

1.4

2013 2014 2015 2016 2017

16.1 14.3

*

20.6

14.1

18.3

22.320.6

2013 2014 2015 2016 2017

Tie

r 1

72.5 74.1 79.381.0

76.5

2013 2014 2015 2016 2017

39

*BaFin minimum requirement at year-end 2017.

Explicit and direct guarantee from theFederal Republic of GermanyBasis of KfW’s funding

§1a of the Law concerning KfW:

The Federal Republic guarantees all obligations of KfW

in respect of loans extended to and debt securities issued by KfW,

fixed forward transactions or options entered into by

KfW and other credits extended to KfW as well as

credits extended to third parties inasmuch as they are expressly

guaranteed by KfW.

› Guarantee established in 1998

› Defined by law

› Direct, explicit and unconditional



KfW’s funding: three pillar strategyA well-structured range of products offers suitable opportunities for various investors’ needs

› Large and liquid bonds in

EUR and USD

› At least 3, 5, 7 and 10 year

benchmark maturities each

year

› Target benchmark sizes:

› EUR 3 – 5 bn

› USD 3 – 5 bn

› EUR-taps up to a maximum

volume of EUR 6bn

› Large and liquid bonds

› in non-benchmark maturities with or without call option (EUR and USD)

› in strategic markets (GBP, AUD, SEK, JPY, CNH, NOK, CHF …)

› in further currencies

› Green Bonds

› Other structured public

bonds in various currencies

› Customized bonds for

investor needs

› Flexible in currency,

structure and maturity

2017: 16 transactions 2017: 73 transactions 2017: 56 transactions

Other public transactions Private placementsBenchmark programme

2017: EUR 78.2 bn

2018 target: EUR 75-80 bn

71% 25%

4%

41


Capital marketsStrong presence in the capital markets

Capitalization(as of 31.12.2017)

81%

9%

4%

6%

Capital market

Money market

Other liabilities (primarily collateral from derivativetransactions)Equity

Total EUR 450.9bn

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78.2

72.8

65.4

57.462.6

75-80

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017 2018

Funding volumein EUR bn

Benchmark bonds Public transactions Private placements

Already issued

in 2018:

EUR 46.3bn

as at June 30

0

10

20

30

40

50

60

70

80

EUR USD AUD GBP JPY Others0

10

20

30

40

50

60

70

80

KfW’s funding by currencies and instrumentsBenchmark bonds are key – core currencies Euro and US Dollar

Benchmark bonds

Instruments(in %)

Currencies(in %)

Public transactions Private placements

2017 (EUR 78.2 bn)2013 (EUR 65.4 bn) 2014 (EUR 57.4 bn) 2015 (EUR 62.6 bn) 2016 (EUR 72.8 bn)


Highlights in 2017:

› 12 Benchmark bonds (plus 4 taps) in EUR and USD. In 2017, benchmark bonds accounted for 71% of total

funding.

› The challenging market environment led to a particularly flexible funding strategy.

› Unlike the year before, EUR regained in 2017 the highest share (approx. EUR 41.7bn, 53% of total funding) in

the currency mix followed by USD (approx. EUR 26.9bn equivalent, 34% of total funding).

KfW’s global investor baseDistribution of KfW’s EUR-Benchmark investor base


based on allocations

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2013 2014 2015 2016 2017 Jun 2018

in % Geographic Distribution

Europe ex Germany Germany

Asia Americas

Other

0,0

10,0

20,0

30,0

40,0

50,0

60,0

2013 2014 2015 2016 2017 Jun 2018

in % Investor Distribution

Central Banks Banks

Asset Mgt. Ins. & Pension

Other

Asia

Central Banks

Asset Mgt.

Ins. & PensionOther

AmericasOther

Europe ex Germany

Germany

Banks

KfW’s global investor base› Distribution of KfW’s USD-Benchmark investor base


based on allocations

0,0

10,0

20,0

30,0

40,0

50,0

2013 2014 2015 2016 2017 Jun 2018

in % Geographic Distribution

Asia MEA Europe

Americas Other

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2013 2014 2015 2016 2017 Jun 2018

in % Investor Distribution

Central Banks Banks Asset Mgt.

Ins. & Pension Other

Americas

Europe

MEA

Other

Asia

Other

Central Banks

Banks

Asset Mgt.

Ins. & Pension


KfW in the capital markets in 2018

46

Strong presence in the capital markets with funding target of EUR 75-80 billion.

KfW's outstanding access to the capital markets, including in USD, facilitates the issue of liquid global bonds.

KfW relies on its proven 3-pillar-strategy. EUR & USD remain key currencies in 2018 (2017: 87.7%).

The benchmark programme is the most important funding source.

GBP, AUD and Uridashi will remain important for KfW’sfunding mix.

Continued commitment to green bonds.

Green Bond portfolio of KfW


Green Bond PortfolioMotivation and goals

KfW’s long-term goal is an active contribution to the global reduction of environmental pollution

and climate change, through alternative funding of sustainable projects via the capital market.

The portfolio is backed by the Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety (BMUB).

KfW actively supports the green bond market with the development of qualitative standards and an engagement process with market participants.

Since April 2015, KfW has been actively investing in Green Bonds on a global scale. The target

volume of the portfolio was doubled to EUR 2 billion in May 2017.

48


Green Bond PortfolioField of activity and minimum criteria

› Renewable energy funding

› Energy efficiency projects

› Environmental friendly transportation

› Waste industry

› (Waste-) water-management

› Biodiversity measures

› Other refinancings with a positive impact on climate and environmental protection

KfW seeks to contribute to the realization of projects in the fields of:

› Transparent process of funds allocated, and a competent project selection

› A clear description of the projects refinanced (including goals and, if possible, projected impacts)

› A frequent public reporting as well as an independent second opinion

Beforehand, KfW obligatorily checks the following minimum criteria:

49


Green Bond PortfolioKey portfolio figures

› KfW will invest in the following fixed income securities:

› Sovereigns and regions

› Supranationals, agencies and other state-owned or partially state-owned institutions

› Financials

› Corporates

› Covered bonds and “Pfandbriefe”

› ABS (senior tranches only)

› Potential currencies will be USD, EUR and a selection of European currencies.

› An investment-grade rating is mandatory.

50

Disclaimer

This document is provided for information purposes only. This document may not be reproduced

either in full or in part, nor may it be passed on to another party. It constitutes neither an offer nor

an invitation to subscribe or to purchase securities, nor is this document or the information

contained herein meant to serve as a basis for any kind of obligation, contractual or otherwise. In

all legal systems this document may only be distributed in compliance with the respective

applicable law, and persons obtaining possession of this document should familiarise themselves

with and adhere to the relevant applicable legal provisions. A breach of these restrictions may

constitute a violation of US securities law regulations or of the law applicable in other legal

systems. The information contained in this document is historical and speaks only as of its date.

KfW disclaims any intention or obligation to update or revise the information contained in this

document. By accessing this document you acknowledge acceptance of these terms.



Photo credits/references

Titel slide: full-page image: gettyImages, plainpicture / Piotr Krzeslak, Cultura

Slide 4: full-page image / KfW / Stephan Sperl

Slide 5, Picture 1: KfW Photo Archive / Rüdiger Nehmzow

Slide 5, Picture 2: KfW Photo Archive / Angelika Kohlmeier

Slide 5, Picture 3: KfW Photo Archive / -

Slide 6, Picture 1: KfW Photo Archive / -

Slide 6, Picture 2: KfW Photo Archive / Jens Steingässer

Slide 6, Picture 3: KfW Photo Archive / Bernhard Schurian

Slide 6, Picture 4: KfW Photo Archive / photothek.net

Slide 6, Picture 5: KfW Bankengruppe / Jens Steingässer

Slide 7, Picture 1: KfW Photo Archive / Holger Peters

Slide 7, Picture 2: KfW Photo Archive / Charlie Fawell

Slide 7, Picture 3: KfW Photo Archive / photothek.net

Slide 11: KfW-Bildarchiv / photothek.net


Slide 17: KfW Photo Archive / phototek.net

Slide 19, Picture 1: WindStrom Erneuerbare Energien GmbH & Co. KG / -

Slide 19, Picture 2: HP-T Höglmeier Polymer-Tech GmbH & Co. KG / Werner Röthlingshöfer

Slide 20, Picture 1: NOTUS energy / FRICKE Film

Slide 20, Picture 2: German Solar Construction GmbH / -


Slide 26: gettyImages, plainpicture / Piotr Krzeslak, Cultura


Slide 40: Deutscher Bundestag / Lichtblick / Achim Melde

Slide 46: gettyImages, plainpicture / Piotr Krzeslak, Cultura


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Treasurer of KfW: Ext.

Dr. Frank Czichowski - 2165

Capital Markets:

Petra Wehlert - 4650

Otto Weyhausen-Brinkmann - 4652

Alexander Liebethal - 4656

Investor Relations:Jürgen Köstner - 3536Nicolas Pfuhl - 8623Dorota Reiter - 8537Philipp Mahn - 2056Serviceline - 2222

KfW Bankengruppe

Palmengartenstrasse 5–9

60325 Frankfurt am Main

Fon +49 69 7431 - Ext

Fax +49 69 7431 - 3986

[email protected]

Bloomberg: KfW <GO>

www.kfw.de/investor-relations

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Invest in the everlasting. Green Bonds – Made by KfW. · Green Bonds - Made by KfW / July 2018...

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