1. German Financial Cooperation with MENA Focal Areas, Approaches and Examples
Practitioners’ Network for European Development Cooperation
Workshop on Cooperation in the MENA Region
Christoph Krieger, Principal Country Manager
Brussels, 25 October 2011

2. 60 Years of KfW Financing with a Public Mission
Promotional bank of the Federal Republic of Germany
Founded in 1948 as Kreditanstalt für Wiederaufbau
Shareholders: 80% Federal Republic, 20% federal states
Headquarters: Frankfurt am Main Branches: Berlin and Bonn
Balance sheet total at end-2010: EUR 504 billion
4,600 employees (2010)
Best rating: AAA/Aaa/AAA 2 2

3. A Bank with a Wide Array of Functions
Domestic promotional activities
Promotion of SMEs, entrepreneurs, environmental and
climate protection
business start-ups
Promotion of
housing, education, infrastructure and social development
Financing of municipal infrastructure projects and promotion in Europe
International
project and
export finance
Promotion of
developing and
transition countries 3 3 3

4. Financing Instruments
Governmental Budget Funds
KfW Funds
100% Budget Funds
Grants
Loans IDA conditions
Loans standard FC conditions
Development Loans
Composite financing
Reduced-interest loans
Promotional Loans
LDCs = GDP p.c. < 900 USD
IDA = GDP p.c. < 1.735
other Developing Countries
Leveraging
limited budget funds
100% KfW-Risk
close to market conditions
Quellen der Mittel: dadurch 3 „Produktlinien“
HH-Mittel:
IDA Konditionen: 0,75/40 j. Laufz. / 10 Freijahre
FZ-Standardkonditionen: 2,0 / 30 / 10 (DAC Einstufung als konzessionärer Kredit)
Entwicklungskredite:
Misch (1963)- und Verbundfinanzierung(1994):
verschiedene „Mischungstechniken“,
Risikodeckung durch ECA oder Bund
Relativ neu: Zinsverbilligung (2001)
HH-Mittel/Zuschüsse zur Zins-Suventionierung genutzt (Bsp. Refi 5% auf 3%)
Maximale Hebelwirkung 1:4
ODA-Anrechenbarkeit von Entwicklungskrediten: DAC-Mindestzuschusselement von 25% wird erreicht.
FZ-Förderkredite: 100% KfW Eigenrisiko (ggf. Risikoversicherung)
FAZIT: KfW individuelle Zinssätze je nach Projekt und Risiko/Land im Gegensatz zur Weltbank (feste Zinssätze pro Land) – keine ODA
Broader scope of action
for Cooperation with Developing Countries

5. Our Focal Areas MENA Team MENA at KfW Entwicklungsbank Board of
Managing Directors
Latin America
Environment and Climate
Africa
MENA
Europe
Asia
MENA
Sub-Saharan
Africa
Climate - Environment - Energy
Water Resources and Solid Waste
Education and Sustainable Economic Development

6. German Development Cooperation with MENA Priority and Partner Countries
Priority Countries
Partner Countries
KfW-Offices
Palestinian Territories
Lebanon
Syria
Tunisia
Iraq
Morocco
Jordan
Egypt
Yemen

7. Focal Areas and Approaches Water – Sanitation – Solid Waste
Challenges in MENA
water stress, overexploitation of water resources and climate change
insufficient urban water supply in parallel with strong urban growth
water resources and health conditions endangered due to unsufficient sanitation and waste disposal
Our Approaches:
strengthen water supply efficiency through water loss reduction programmes
improve access to adequate water supply and sanitation – urban and rural
promote resource efficient irrigation in agriculture
Perspectives for Financial Cooperation:
promoting Integrated Water Resource Management (IWRM) in MENA
adaptation measures to tackle the consequences of climate change (sanitation, water resource management)

8. Focal Areas and Approaches Environment – Climate Protection - Energy
Challenges in MENA:
region is strongly affected by consequences of climate change
heavy burden on urban areas by pollution of growing industries and thermic power plants
high dependency on import of fossil fuels (Morocco, Tunisia)
energy intensity higher-than-average
Our Approaches:
utilise the enormous potential of Renewables in MENA (wind and solar power)
promote energy efficiency – strongly neglected in the region
promote industrial enviromental protection via national enviromental funds
promote appropriate waste collection – important contribution to climate protection
support public transport systems
Perspectives for Financial Cooperation:
partnering the implementation of Mediterranean Solar Plan and the vision Desertec (Dii) – first solar power plants under preparation in Morocco and Egypt
exploring the scope of action for energy efficiency and how to kick-off investments
initiate Recycling Management Systems - waste-to-energy

9. Focal Area and Approaches Education and Sustainable Economic Development
Challenges:
high population growth, a young population two-thirds younger than 30) high illiteracy rates (in particular: Morocco, Yemen, Egypt)
low GDP-growth per capita; many jobs in low productivity areas, unsufficient qualification, high unemployment in particular young adults (one of main reasons for Arab Spring)
conflictive region, high frequency of crisis, unsufficient rule of law, fragile states, missing economic and social opportunities lead to pressure on migration and lack of perspectives
Approaches:
promote education on all four levels
on the supply side: access and quality - on the demand side: Financing Eduation
promote strong and diverse national financial systems to enable development oriented capital flows
promote Municipal Financing Systems – establishing systems of financial equalisation between municipalities
Perspectives for Financial Cooperation:
creation of SANAD: the MENA Fund for Micro-, Small and Medium Enterprises
developing approaches for Financing Education in MENA

10. Portfolio Commitments per Country (Million Euro)
= aktives Portfolio (zwischen Vertrag und AK)
Total: Million Euro

11. Portfolio Commitments per Sector (Million EUR)
Gesamt: Mio. Euro

12. Wind Energy Morocco Tapping Own Resources
Problem
fast growing energy demand
very limited proper energy resources
Morocco‘s high dependency on imported fossil fuels
Approach
utilise the first-class wind power potential
finance new wind power plants
generate more than 500 GWh/annually
Impact
provision of environmental friendly energy and sustainable utilisation of natural resources
electricity generation for 2 million inhabitants – private households
saving around t CO2
reducing Morrocco‘s expenditures on fossil fuel imports
Contribution
Wind Park Tanger (140MW): 50 m EUR (FC-Loan)
Wind Park Essaouira (60MW): 50 m EUR (FC-Loan)

13. Education Programme Palestinian Territories Combined Forces for Better Education
Problem
high illiteracy rates, high unemployment rates
insufficient quality in education
the multitude of active donors in the field of education is a challenge for budgetary planning
Approach
joint donor mechanism to coordinate the implementation of the national education strategy
learner-friendly enviromments in schools, innovative and adapted infrastructure build with labour-intensive measures to generate incomes
Impact
higher level of quality in education
reduction of administrative costs
strengthening the Ministry for Education
Costs and Contribution
total costs: 419 m EUR
FC-Contribution: 77 m EUR (grant)

14. Improved Water and Wastewater Services Programme (IWSP) Protecting Health and Environment in Egypt
Problem
health and environmental risks due to insufficient water supply and waste water systems
high necessity for investments in infrastructure
water utilities lack capacity
Approach
investments to rehabilitate, expand and construct water and waster water treatment plants
accompanying measures to support water utilities
NIF – joint financing mechanism (EU, AFD, EIB, FC), KfW as the lead financier
Impact
sustainable improvement of the water supply and waster water systems in the Niledelta
improvement of the utilities‘ performance and its staff capacities
support for sector reforms programme management
Contribution
61 m EUR (loan) for investments and 8,3 m EUR (grant) to support the water utilities

15. Water Resource Management in Jordan Recycling Water Resources with Multiple Use
Problem
extreme and increasing water shortages
overexploitation of water resources
high population growth
Approach
Re-use of treated waste water for irrigation in agriculture
Re-use of irrigation water for drinking water
electricity generation from gravity pipes
Impact
20 liter drinking water daily extra for each inhabitant of Amman
electricity for households
Irrigation in the Jordan Valley to be ensured
Contribution
investment costs for Re-use components: 22,5 m EUR (FC development loan)
Re-use components are part of a broader Water Resource Management Programm

16. Regional Fund SANAD Access to Finance for Small and Medium Enterprises
Problem
commercial banks avoid financing for micro, small and medium enterprises (MSME)
despite liquidity in the market, finance for MSMEs hard to obtain
MSME account for around 70% of employment in MENA
Approach: establishing a Fund…
to combine public and private investors
to disburse loans, guarantees and equity
open to (micro-) finance institutes of all MENA countries
managed by a private consultant
Impact
mobilisation of private liquidity
improving access to finance for local enterprises
Contribution
expected: 20 m EUR (grants) + 10 m EUR equity share; assumed fund volume in 5 years m EUR

17. Thank You for Your Attention…

18. Contact in Frankfurt E-mail: Firstname.Surname@kfw.de
L II c
Wolfgang Reuß
(3593)
First Vice President Director MENA Offíce: Susanne Reinhardt (2119) / Fax (3279) Office L2c3/4/5: Michaela Lessmann (8903)
September 2011
L2c1
Country Team André Ahlert (2155) Egypt
Sylvia Paschke (4077) Jordan, Palestinian Territories, Israel
n Christoph Krieger (2405) Tunisia, Morocco, Algeria
Alexander v. Kap-herr (9355)
Syria, Yemen
Moritz Remé (4189) Lebanon, Iraq
Susanne Schröder (3751)
Contracts:
Julien LeChuiton (8456)
L2c2 KC Water Near East
Stefan Zeeb (2584)
Manuel Schiffler (4325) Dr. Stefan Gramel (4845) Alexander Grieb (4732) Wolfgang Pfaff-Simoneit (4145) Sebastian Jacobi (1672) Theodor Dickmann (2068)
Olaf Goerke (9356)
Dr. Konar Motafoglu (9942)
Gerald Scholz (2969)
L2c3 Education and Sustainable Economic Development
Babette Stein v. Kamienski (3705)
Mandana Bahrinipour (9028) Frank Determann (3583) Eberhard Knapp, ext (2659) Cornelia Penzel (3952)
Bettina Zoch (9003) Matthias Zilbauer (4727)
Jan Wiegelmann (9556)
L2c4 Water North Africa
Dr. Jörg Dux (1926)
Ditlinde von Davidson (2418) Bruno Schoen (2310)
Thomas Linsenbold (2787) Reinhard Schmidt (2131) Gert Strübing, ext. (4635)
Thorsten Waibel (3934) Gunter Walter (3143) Dr. Bernd Wiebusch (2633) Claudia Bürkin (Cairo Office) (*7511)
Tatjana Bruns (3474)
L2c5 Climate and Environment
Kurt Hildebrand (2890)
Bernd Hasel (2593)
Wolf Muth (4788) Thomas Prien (9807) Christoph Twerenbold (Rabat Office) (1701) Bernhard Schenk, ext. (4108) Verena Willand (4442)
Helmut Asam (9110)
Katharina Brinkmann (3350)
Tel/Fax: xxxx

19. Palestinian Territories
Contact in MENA
Lebanon
Daniel Neuwirth
Programme Coordinator
Hamra Gefinor Centre
Block D, Office 401/3, Clemenceau Street, Beirut, Libanon
Tel
Fax:
Palestinian Territories
Director:
Marc Engelhardt
German House
Abdullah Joudah Street Bldg. 35, Al Bireh, Palästina
Tel Fax:
Tunisia
Markus Schlömann
Local Representative
Tunis
Tel.:
Syria
Director:
N.N. German House
Al Mehdi Ben Barakeh Street 26
Damskus, Syrien
Tel
Fax:
Palestinian Territories
Tunisia
Iraq
Morocco
Jordan
Director:
Bettina Tewinkel
Mohammed Baseem Al-Khammasch Street No 13 P.O. Box Sweifieh, Amman Jordan
Egypt
Morocco
Director:
Silke Stadtmann
2, Avenue Tour Hassan
10020 Rabat/Marokko Tel
Fax:
Yemen
Egypt
Director:
Dr. Jens Mackensen 4 D, Al Gezira Streed (3rd Floor)
Zamalek 11211, Kairo
Tel.:
Fax:
Yemen
Director:
Bernd Schönewald Hadda Area, Street No. 21,
Villa No. 19
Sana´a, Jemen Tel.: Fax: