OREANDA-NEWS. May 22, 2012. On 1 June 2012, KfW will launch the new promotional programme "Municipal Energy Supply", which will make reduced-interest loans available to municipal enterprises and municipalities for investments in energy efficiency and expansion of decentralised municipal energy supply systems. By 2020, existing capacities in Germany may no longer be sufficient to meet electricity demand at all times because of fluctuations in electricity generation from renewables. "For our energy security the continued development of flexible conventional power plants is just as important as the expansion of distribution networks, intelligent network technology and high-capacity storage technologies. The local utilities as regional power supply companies play a particularly important role in this regard. We want to help them make an important contribution to the energy turnaround at the municipal level through the new programme, in which we will reduce the interest rate from our own funds", said Dr Axel Nawrath, member of the Executive Board of KfW Bankengruppe. According to the German association of municipal enterprises, 21 GW of additional power generation capacity will be needed by the year 2025 and around EUR 25 billion will have to be invested in expanding and converting distribution networks by the year 2030.

The new promotional programme will support municipal investors primarily in investing in building or upgrading gas and steam power plants, more flexible electricity generation with natural gas fuelled cogeneration plants, expanding distribution networks, or installing intelligent information, communication and grid control technologies. Financing will also be available for construction of new and expansion of existing decentralised electricity storage units.