Indo-German Development Cooperation Supports Energy Efficient Residential Buildings


As part of the Residential Housing Energy Efficiency Facility, KfW and SBI have signed a loan of $277 million. SBI will on-lend concessional funds to buyers and developers of buildings that use at least 25% less electricity than in the reference buildings. Additional incentives will be provided for buildings and apartments that achieve savings of at least 40% compared to conventionally constructed buildings.

On 12 December, KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) signed an agreement with State Bank of India (SBI) to provide $277 million (€250 million) for energy efficiency in residential buildings under the Indo-German Development Cooperation. 

Under this programme, both builders and home buyers will be financed by SBI for developing and purchasing new energy efficient residential projects that achieve at least 25% energy savings in comparison to standard reference buildings. For projects that achieve 40% energy savings or higher, KfW will provide, through SBI, an additional grant of €10 million to developers and home buyers on behalf of the German government. Such high savings can be achieved through the use of better building materials as well as energy efficient appliances.

In addition to concessional loan funding, an accompanying grant facility will support SBI in the preparation and implementation of individual subprojects and in developing an adequate Environmental and Social Management System.

Rapid urbanisation in India is forecasted to double the number of residential apartments by 2030. The residential building sector will become the country's largest consumer of electricity. In view of these forecasts, it is important that new apartments are built in a sustainable and energy efficient manner since this is crucial for achieving India’s climate protection targets.