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New funding program for climate-friendly new construction - KFN

Why the subsidy could also be worthwhile despite the discontinuation of the repayment subsidies.

Content

  • What funding opportunities are available?
  • What exactly is the KFN funding program?
  • Will my project be funded by the KFN funding program?
  • How will my project be funded?  
  • How we make promotion possible for you

Funding from the federal government

In light of current events, today we are talking about the federal government's funding for the construction of particularly climate-friendly buildings (KFN). A special feature here is the possible funding without the "Sustainable Buildings Plus" quality seal. Read this blog post to find out what new regulations the KFN funding entails and what potential it offers for your project. 

The amendment to the Climate Protection Act with regard to the European 2030 climate target states that Germany should achieve greenhouse gas neutrality by 2045 (see Climate Protection Act: Climate neutrality by 2045 | Federal Government). However, the building sector in particular is lagging behind this target. There is also a lack of affordable housing. The climate-friendly subsidy for new builds that came into force on March 1 is intended to counteract this situation. Even if the repayment subsidies of the old BEG new construction subsidy are discontinued, the high interest rate reductions and partially reduced requirements can offer attractive conditions for new buildings. 

This specific KFN topic is embedded below in the overall context of funding for sustainable construction projects. If you are already familiar with this topic, you can jump directly to the heading "What exactly is the KFN funding program?" to get all the latest information on this topic. 

What funding opportunities are available?

Let's take a step back in time together to get a comprehensive answer to this question:

The European reconstruction program, also known as the Marshall Plan, provided the seed capital for the Kreditanstalt für Wiederaufbau (KfW), which had been in existence since 1948. When the Marshall Plan expired, the funds were used to create a fund to promote the German economy. Funding for climate-friendly construction projects receives special support. The funding body for such projects is the Federal Ministry of Economics and Climate Protection (BMWK), and these subsidies are implemented by KfW and the Federal Office of Economics and Export Control (BAFA).

Since most greenhouse gas emissions are caused by the generation of electricity and heat, the topic of sustainable building is particularly relevant, which is why the federal subsidy for efficient buildings (BEG) has been in place since 2021. This was cut and reformed in July and September 2022, and since then has applied to new construction, renovations and individual measures. For refurbishments, the last reform of 01.01.2023 applies: the BEG still applies and the KfW is responsible for implementation for residential and non-residential buildings and the BAFA for individual measures. Since March 1, the KFN implemented by KfW applies to new buildings.  

For more information on the BEG, BAFA and KfW, please see the following links:

BAFA - Funding program at a glance

Bank out of responsibility | KfW

What exactly is the KFN funding program?

The overarching goal of the KFN funding program is to reduce greenhouse gas emissions throughout the life cycle of buildings. The primary energy demand in the operating phase is to be reduced and the use of renewable energies is to be increased. The funding body is the Federal Ministry of Housing, Urban Development and Building (BMWSB), and it is implemented by KfW. The funding type is a low-interest loan compared to the financial market; municipalities can also be granted subsidies. (cf. Climate-friendly new construction funding | Federal Government).

Will my project be funded by the KFN funding program?

In principle, funding is provided for the construction of new buildings and the initial purchase of buildings that comply with the energy standard of an Efficient House/Building 40 for new buildings and do not deviate from the requirements for greenhouse gas emissions in the building life cycle. In addition, the building must not have a heat generator based on fossil energy or biomass; the exclusion of biomass refers not only to solid biomass but also to biogenic gas and oil.  

New in the KFN funding program is the regulation that there are two funding levels with different requirements and funding intensities for residential and non-residential buildings: on the one hand, funding with the Quality Seal for Sustainable Buildings (QNG) and, on the other hand, funding without this seal is now also possible.

It is important to note here that even in the case of funding without QNG, a comprehensive life cycle assessment must be prepared, which, among other things, demonstrates that the greenhouse gas emissions requirements of the QNG Plus are met. The GWP100 value to be met for residential buildings is 24 kg CO2 eq./(m2 a). For non-residential buildings, a project-specific requirement value must be demonstrated. However, an auditor is not required for this. In the case of QNG funding, the requirements for QNG Plus or QNG Premium must be met in addition to the requirements just mentioned, and this must be confirmed by a sustainability certificate. The prerequisite for the award of the QNG is the performance of a sustainability assessment of the building based on a sustainability assessment system registered with the German Accreditation Body (DAkkS) and the verification of the qualities achieved by an accredited certification body. This is the fundamental difference in contrast to promotion without QNG, which requires a less complex process. What is the impact of promotion without QNG on a construction project? Find out in the next section:

How will my project be funded?

The difference resulting from the above-mentioned different requirements is reflected in the maximum loan amounts of the subsidy.  

On March 1, the interest rate terms for the new KFN subsidies were published. For non-residential buildings, financing is available from 0.97% and for residential buildings from 0.01%. Get an overview of the interest rates for your respective project at the following links:  

Climate-friendly new construction - residential buildings (297, 298) | KfW

Climate-friendly new construction - non-residential buildings (299) | KfW

https://www.kfw-formularsammlung.de/KonditionenanzeigerINet/KonditionenAnzeiger

How we make promotion possible for you

Are you interested in a subsidy for your climate-friendly new building, but need support with this project? Then you have come to the right place!

Because we make ecologically economical for you.

We accompany innovative building projects of all kinds - from the very first moment until project completion. With our expertise, we get you the maximum possible funding and also identify possible certifications for your completed project, such as the DGNB for climate-friendly buildings. Furthermore, we offer permanent interface communication as well as documentation management during the entire certification and approval process.  

As Construction Minister Geywitz has already commented, "The temptation is sweet, of course, to say: we'll wait until the next few years to solve the climate problem. But a house we build now will stand for the next decades." (cf. Minister Geywitz: In housing construction "out of shock" | NDR.de - News - Hamburg). To advance sustainable development, cooperation is therefore advisable, and funding programs, such as those of the German government, help in this endeavor. This is because the promotion of sustainable development is the guiding principle of the German government. Thus, natural resources are to be protected, social responsibility is to be assumed and, at the same time, economic performance is to be supported. Germany is implementing the UN's 17 global sustainability goals through the German Sustainability Strategy, including the funding for climate-friendly new construction that has come into force (cf. 17 Sustainability Goals - SDGs | BMUV). KFN is an essential step towards achieving the climate goals and we at DeepGreen Funding are happy to help you implement your project with this funding!  

Sources:

Climate Protection Act: Climate neutrality by 2045 | German government

BAFA - Federal funding for efficient buildings (BEG)

www.kfw.de

Conditions Scoreboard (kfw-formularsammlung.de)

Climate-friendly new construction funding | Federal government

Minister Geywitz: Housing construction "out of shock" | NDR.de - News - Hamburg

17 Sustainable Development Goals - SDGs | BMUV

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