Interview : Perspectives of KfW Development Bank on bilateral Energy Cooperation

Could you please explain KfW’s role in Energy Transition in India?

KfW Development Bank has been working under the German Federal Government to achieve its goals in international development cooperation for more than 50 years. In this regard, KfW is both an experienced bank and a development institution with financing expertise, expert knowledge of development policy and many years of national and international experience. On behalf of the German Federal Government, and primarily the Federal Ministry for Economic Cooperation and Development (BMZ), we finance and support programs and projects that mainly involve public sector players in developing countries and emerging economies. Germany and KfW are longstanding partners of India. Since the 1950s, more than 16 billion EUR has been sanctioned by the German Government through KfW. The energy sector is one of the focal areas of the Indo-German Cooperation.

In the electricity generation sector, KfW assists India in expanding its zero-emission electricity generation based on market ready renewable energy sources and technologies like solar photovoltaic and wind as well as small hydropower. KfW helps closing the funding gap for private investors both in terms of loan tenure and cost of borrowing through Public Development Banks and Public Commercial Banks like IREDA, REC and SBI.

The additional generation capacity in Renewable Energy is mostly on-grid and requires enhanced transmission capacity. India has developed the “Green Energy Corridor” concept to link generation hotspots to consumers. KfW works with Powergrid Corporation and State Transco’s to expand its power system and improve its management to accommodate the strong expansion of renewables generation and consumption.

But not all households are on-grid, and access to energy remains a huge task for India. The government runs substantial programs for off-grid power, and KfW will continue support investments in off-grid systems through IREDA, based on renewable energy sources.

From the energy usage perspective, India has large potential to reduce the energy intensity of its growth. The Indian Government has taken initiatives to improve energy efficiency on both demand and supply side. KfW works with SIDBI for energy efficiency in MSME, and with EESL on energy efficiency in households and public infrastructure. On the supply side KfW is in discussion with Indian Discom´s to support measures for reducing commercial and technical grid losses.

Beyond market ready technologies and business models, India needs innovation to meet the challenges. By providing funding and know-how KfW contributes to such innovation, takes away some financial risks and transfers its experience from Germany and the global market. As the largest development bank in Germany, being responsible for implementation of many German programs for energy efficiency and renewable energy, as well as parts of the German “Energiewende”, KfW is well placed to transfer such know how to India.


How do you see the IGEF fulfilling the objectives of the Indo-German bilateral Cooperation in the field of Energy?

A good cooperation between partners starts with a fruitful dialogue. Germany and India have common goals regarding the transformation of its energy sector. Enhancing the capacity of renewable energy, balancing aspects and integration of renewables and energy efficiency are topics widely discussed in both countries. And both countries can learn from each other to overcome the challenges. IGEF as an established platform facilitates this important dialogue. Under IGEF decision makers, key stakeholders including the private sector of both countries are able to meet, share their experiences and use IGEF capacity to look into certain topics in more detail. KfW is contributing with its knowledge and experiences and is always keen in identifying future areas of cooperation. Therefore, IGEF is a corner stone for the successful Indo-German bilateral Cooperation in the field of Energy.


What are the focus areas of KfW in the near future in the realm of clean energy vis-à-vis the developments in India?

Based on the mandate of the German Government, KfW will further support India´s impressive journey towards a more sustainable and clean energy sector. The Green Energy Corridor programme will play a central role in our cooperation because of the imminent need of transmission infrastructure for the evacuation of the upcoming renewable energy plants. Another central piece of our cooperation is the Indo-German Solar Partnership. The support for solar rooftop for MSMES and households, floating solar as well as using solar power for the energy needs of the agricultural sector will be focus areas of our cooperation. Based on the experience in Germany we are also convinced that potentials in India for saving energy needs to be more exploited. Enforcement in regulation as well as incentives for an efficient use of energy has to be provided. Saving energy is the less costly way to achieve the goal of a cleaner energy sector. KfW will also focus its resources towards distribution sector with the objective to support Discom's in reducing the AT&C losses in the grid, in aspects of integration of renewable energy as well as in energy efficiency in general.


Please elaborate your views on Indo-German development cooperation in Energy based on your experiences during your 3 year long tenure in India?

It was a privilege to head the KfW Energy Team in India for the last three years. India´s willingness to meet the climate goals is of global importance and the energy sector is the main key to achieve these goals. This transformation of the energy sector poses a lot of challenges. Based on a trustful relationship with various partners and the Indian ministries and states. KfW, German Development Cooperation GIZ are capable and well placed to support our partners in overcoming these challenges. Personally, I am looking back to a multitude of intensive meetings and interactions where I could learn and where I could bring in our perspective. The last three years will always have a special place in my memories and I am deeply grateful.