KFW

Partnership with AFD

KfW Entwicklungsbank is a strategic partner for AFD. The current Cooperation Framework Agreement between AFD and KFW was signed back in 1998. It was subsequently pursued and reinforced with the signing of the Mutual Reliance Initiative (MRI) between AFD, KfW and EIB in February 2010.
Regular strategic exchanges take place between AFD and KfW via periodic high-level meetings and operational exchanges when the need arises. In addition, exchanges of expertise take place at a wider level of European development institutions, within the working group of the Practitioners’ Network, particularly for climate change issues. AFD and KfW also adopt joint positions vis-à-vis the European Commission concerning the role of bilateral development banks in Europe’s pluralist development policy. Within this strategic framework at the European level, it specifically concerns measures to combat climate change and financial instruments (blending loan-grant resources), as well as cooperation procedures.

The financial partnerships with KfW have provided the opportunity to implement new loan-grant blending instruments (Neighbourhood Investment Facility, EU-Africa Infrastructure Trust Fund) made available by the European Commission. A total of 25 projects have been cofinanced since 2000, with two-thirds implemented after 2005. The vast majority of these projects have been in sectors such as infrastructure, water and sanitation and, more recently, the environment and natural resources management. Sub-Saharan Africa is the main recipient of the cofinancing between the two partners, followed by North Africa and the Middle East. The 14 pilot projects implemented following the MRI agreement mainly concern the transport, power, and water and sanitation sectors.

Presentation of the institution

KfW was founded in 1948 to manage projects financed under the Marshall Plan. It is based in Frankfurt and is a banking group under public law, with 80% of its share capital held by the Federal State and 20% by the Länder. Although most of its activity is devoted to financing the German and European economies, since 1963 it has also been playing a role in financial cooperation towards developing countries in a bilateral capacity via its KfW Entwicklungsbank (“development bank”) unit. KfW Entwicklungsbank, which employs roughly 450 people, is the implementing agency operating on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and finances investment projects in developing countries in the name of the German Federal Government. The subsidiary, DEG, promotes the creation and development of private companies. In recent years, the new commitments of these two KfW units have reached some €4.5 to 6 billion a year, including €3.5 to €4.5 billion for KfW Entwicklungsbank.