The Kreditanstalt fur Wiederaufbau is stopping the financing of new coal projects. However, it will continue to grant loans for oil and gas production.
Coal-fired power plants like the one in Niederaussem in North Rhine-Westphalia will soon no longer be funded by KfW Photo: ap
Investments in the coal industry are on the index of more and more lenders. The construction of new power plants in Germany is now history. But German companies continue to build abroad, often with the support of KfW-IPEX-Bank, a subsidiary of the Kreditanstalt fur Wiederaufbau (KfW). One example is in northern Greece, where Duisburg-based Mitsubishi Hitachi Power Systems Europe is building the Ptolemaida V coal-fired power plant. But similar projects are to come to an end in the future.
KfW no longer wants to finance new coal projects. This is the result of a new KfW exclusion list, which will come into force on July 1. According to the list, "prospecting, exploration and mining of coal" and of coal-based infrastructure and industry will no longer be eligible for financial support. However, financing already in progress will remain unaffected.
In the case of oil and gas, according to the "Exclusion List and Sector Guidelines," KfW is leaving it at restrictions only. For example, "non-conventional prospecting, exploration and extraction of oil from oil shale, tar or oil sands" will no longer be financed. Fracking of natural gas will also continue to be funded. Companies must only declare that no groundwater drawdown or contamination is expected, water is protected and they recycle waste. Conventional oil and gas production will remain eligible for KfW funding.
In a written statement, deputy press officer Nathalie Cahn explains: "In our view, gas and oil will continue to be indispensable in the near future. For example, she said, they are important raw materials for the chemical industry. In addition, Europe and Germany continue to depend on gas-fired power plants for electricity generation.
For Regine Richter of the Urgewald association, which campaigns for environmental protection, these new guidelines do not go far enough. While the association welcomes KfW’s move, she says the credit institution is late to the party. "2015 would have been innovative," Richter said. A major point of criticism is the regulation of fracking; too much room for interpretation is left on this point. Richter would have liked to see a clear exit from fracking. KfW must show a clear exit path from fossil fuels, he said, "to do that, we have to talk about completely stopping the financing of gas and oil production."
Spokeswoman Nathalie Cahn
Gas and oil remain indispensable in the near future in our view
The Ptolemaida V power plant in Greece will be completed despite the new guidelines. It is scheduled to open in 2022.