FWP 1 d792167dfwp.htm GREEN BONDS - MADE BY KFW Green Bonds - Made by KfW
Green Bonds -
Made by KfW
September 2014
Filed pursuant to Rule 433
Registration No. 333-192196


2
KfW Green Bonds –
an investment opportunity for
investors worldwide
Key characteristics of KfW’s USD Green Bond
Issuer
KfW
Guarantor
Federal Republic of Germany
Aggregate Principal Amount
To be determined, subject to market conditions
Maturity
To be determined, but not exceeding the average duration of the Qualifying Assets
Qualifying Assets
Loans
under
KfW’s
“Renewable
Energies
-
Standard”
programme
Redemption Amount
100%
Interest Rate
Fixed rate, payable semi-annually in arrears
Format
SEC-registered global notes
Governing Law/ Jurisdiction
German law; District Court Frankfurt am Main
Targeted Investors
Institutional, socially responsible investors
Green Bonds -
Made by KfW / September 2014
Luxembourg Stock Exchange (regulated market)
USD 1,000
Listing
Denomination


Green Bonds -
Made by KfW
Highlights of KfW’s USD Green Bond
3
High credibility: KfW is among global ESG leaders
2
Excellent credit quality, large size
1
Independent 2
nd
opinion for KfW’s Green Bonds by CICERO
4
5
High degree of innovation through impact measurement of underlying assets by a
German research institute
Environmental and social impacts measured:
3
(1)
Average value for 2007-2012 based on ZSW certified numbers and internal calculations using a conversion rate of U.S. dollars 1.29 per
EUR 1.00. Current and future impact might differ.
Green Bonds -
Made by KfW / September 2014
Estimated
GHG
reduction
of
620
tons
(1)
p.a. per USD 1 million Green Bond
investment
Further
impacts
through
creation
/
protection
of
jobs,
reduction
of
energy imports
to Germany and fossil burning costs


Agenda
4
Green Bonds -
Made by KfW / September 2014
Green Bonds –
Made by KfW
2
Key figures on KfW and its funding programme
3
1
KfW –
commitment to sustainability


KfW
commitment
to
sustainability


Green Bonds -
Made by KfW / September 2014
KfW in brief
The promotional bank of the Federal
Republic of Germany, established in 1948
as a public law institution.
Benefits from explicit and direct statutory
guarantee and institutional liability from the
Federal Republic of Germany.
Frankfurt
Bonn
Berlin
(1)
According to the standardised approach of the Capital Requirements Regulation (CRR).
6
#
1.
Shareholders
Federal
Republic
of Germany
German
federal
states
out of
126
out of
23
out of
191
Rating
Credit
AAA
Aaa
AAA
Fitch
Moody‘s
S&P
Sustainability
#
3.
#
4.
oekom
Sustainalytics
imug
(as
of
Sept
15
2014)
80%
20%
Subject to certain provisions of German
and European bank regulatory laws by
analogy, large parts effective as of
July 1, 2016.
Regulated by the “Law concerning KfW”
and exempt from corporate taxes.
Zero
risk
weighting
of
KfW’s
bonds.
(1)
Supervision by the German Federal
Ministry of Finance and the German
Financial Supervisory Authority “BaFin”.


7
Green Bonds -
Made by KfW / September 2014
KfW Group’s business activities
KfW aims for sustainable improvement of the economic, social, and
ecological conditions of people’s lives. New business 2013: EUR 72.5bn
SME Bank
Municipal and
Private Client Bank/
Credit Institutions
Export & project 
finance
Promotion of
developing &
transition countries
Based on year-end 2013 data.
Customized financing for exports and
project & corporate financing world-wide
Promotion of small-
and medium-sized enterprises,
business start-ups and other commercial clients in
Germany
Housing programmes, environmental and climate
protection, educational finance for private clients
in Germany as well as financing for public clients
(e.g., municipalities, regional promotional banks)
KfW’s public (KfW Development Bank) & private
sector (DEG) development cooperation activities
31%
40%
19%
9%
47%
38%
Environment
investment quota:
Domestic
SME quota:


8
Green Bonds -
Made by KfW / September 2014
Sustainability approach at KfW
Lending business
KfW Group
KfW –
Sustainability principles
Declaration on respect for human rights in KfW’s business activities
Data based on new business 2013.
Demographic
change
Environmental and
climate protection
Globalisation /
technical progress
Trend-independent
promotional topics
13%
38%
20%
29%
Sustainable banking
operations
In-house environmental
protection
Responsible
procurement
Stakeholder dialogue &
staff
Sustainable portfolio
management
Governance & CSR
Public Corporate
Governance Code
Broad sustainability
management system
Prevention of corruption and
money laundering
KfW Foundation


1. Pillar: Lending business
New business environmental and climate
protection 2009-2013
EUR in bn
KfW is one of the world’s largest financiers of environmental
investments with more than EUR 170bn invested since 2006.
9
New business 2013
EUR in bn
Green Bonds -
Made by KfW / September 2014


2. Pillar: Sustainable banking operations
In-house environmental protection
10
Energy consumption and green electricity
Energy-efficient buildings
Business travel and commuting
Water and wastewater
Recycled paper
Charging station for electric cars and fleet modernisation
KfW GHG emissions (t)
2009
2010
2011
2012
(1)
Energy consumption
8,663
6,016
4,578
4,670
Total business travel
7,159
7,481
8,255
8,881
Total
15,822
13,497
12,833
13,551
Ø
per employee
3.2
2.6
2.2
2.0
100% of KfW’s GHG emissions from energy consumption and business travel are offset
by purchasing  Clean Development Mechanism certificates.
Internal sustainability & environmental management system
since 1994
Fields of activities
Awards
Comprehensive sustainability reporting
on KfW’s website.
Reporting
Sustainability report since 2006
Environmental reporting/accounting
since 1998
Best Tall Building
in the World 2011
Green Building
Frankfurt 2009
Frankfurt
2014
Green Bonds -
Made by KfW / September 2014
(1) unaudited figures
Source: KfW, audited by PwC


2. Pillar: Sustainable banking operations
Sustainable investment approach for KfW liquidity portfolio
11
Green Bonds -
Made by KfW / September 2014
KfW Liquidity Portfolio
Exclusion Criteria
ESG-Integration
Portfolio strategy
Pure fixed income portfolio
Buy-and-Hold strategy
Risk managed via guidelines.
Single issuer exposure is
capped by overall limit
process
Portfolio objective
Providing liquidity for KfW
Return targets are of lesser
importance
Asset Mix
Sovereigns, agencies,
supranationals, covered bonds,
financials and asset-backed
securities
Top
Bottom
Middle
Engagement
Implementation of PRI since 2008
Each issuer will be rated according
to ESG criteria (NNN = top category)
Depending on the ESG rating
exposure limits will be adjusted for
each issuer, subject to exclusion list
A selection according to IFC
Exclusion List:
Environment
Social
Governance
ESG-analysis of all issuers
Issuer categories
20%
NNN
60%
NN
20%
N
100%
Limit
90%
Limit
70%
Limit
KfW
excludes
investments
on
the
IFC Exclusion List from its liquidity
portfolio.
Companies
associated
with
forced labour or child labour,
testing on animals, commercial
logging operations for use in
primary tropical moist forests,
controversial weapons, tobacco,
drift net fishing, gambling.
Annual dialogue with the issuers
of the securities of KfW’s liquidity
portfolio


12
Green Bonds -
Made by KfW / September 2014
3. Pillar: Governance
Law concerning KfW
Executive Board
Prevention of
money laundering
Business activities
Code of conduct for
Executive Board and
employees
Data protection
Prevention of
corruption
KfW Bylaws
Public Corporate Governance Code          since 2011
Regulation concerning analogous application of bank regulatory law
Presidial and Nomi-
nation Committee
Remuneration 
Committee
Audit Committee
Risk and Credit
Committee
Board of Supervisory
Directors


Green
Bonds
Made
by
KfW


Green Bonds –
Made by KfW
Key elements
Green Bonds -
Made by KfW / September 2014
14
Ambition
To
support
the
develop-
ment
of
responsible
investing
from
its
niche
position
into
the
broader
capital
market.
To
strengthen
KfW’s
sustainability dialogue
with investors. 
To
attract
new
investors.
To give impetus to the
green bond market via
new quality standards
and increased liquidity.
Drivers
KfW’s holistic
sustainability
approach.
KfW’s long
standing
expertise
in environ-
mental financing.
KfW’s support of the
UN Principles for
Responsible
Investment.
Increasing demand
from investors for green
bonds.
Goal
To raise additional funds
for environmental
projects.
To
enhance
capital
markets
infrastructure
to
finance
environmental
projects.
To
actively
contribute
to
the
fight
against
climate
change.


Qualifying assets
KfW’s
financings
for
environmental
investments
2013:
EUR
27,780mn
(1)
15
Green Bonds -
Made by KfW / September 2014        
(1)
Total has been adjusted for commitments of EUR 143mn made by KfW
IPEX-Bank and refinanced under certain of SME banks promotional programmes
SME bank
Municipal
and private
client
bank
/ credit
institutions
KfW IPEX-Bank
Promotion of
developing
and
transitions
countries
Renewable
energies
Other             Standard
EUR 327mn  EUR 4,354mn
Renewable
energies
EUR 773mn
Renewable
energies
EUR 1,013mn
Offshore wind energy
EUR 194mn
“Financing
initiative –
energy
turnaround”
EUR 178mn
Energy
efficiency
EUR 4,693mn
Energy
efficient
construction
EUR 6,265mn
Energy
efficiency
EUR 1,064mn
Energy
efficiency
EUR 943mn
Energy
advice
EUR 11mn
Energy
efficient
refurbishment
EUR 4,043mn
Energetic
urban renewal
EUR 289mn
Environmental protection
EUR 490mn
Municipal
energy
supply
EUR 858mn
Others
EUR 479mn
Others
EUR 1,463mn
Others
EUR 44mn
Others
EUR 442mn
Total
EUR 10,291mn
EUR 11,897mn
EUR 2,316mn
EUR 3,419mn


programme, KfW provides financings for
facilities to generate electricity or electricity and
heat in combined heat and power stations
from these renewable sources:
16
Qualifying assets
KfW
promotional
programme
“Renewable
Energies
Standard”
biogas/-mass
wind energy
solar energy
hydropower
Private individuals and non-profit organisations which feed the generated
electricity/heat into the grid
Self-employed professionals/farmers
German and non-German enterprises majority-owned by private individuals
Enterprises in which local authorities, churches or charities hold an interest
Who receives financings?
Long-term, low-interest loans
Interest
rate
fixed
for
ten
years,
or
even
longer
for
the
entire
term
Repayment-free start-up period
Up to EUR 25 million loan amount and 20 years repayment term
Financing share of up to 100% of each project’s investment cost
Risk-adjusted interest rate
What makes this
KfW loan attractive?
Green Bonds -
Made by KfW / September 2014
Within its “Renewable Energies – Standard”


New commitments 2013
Average duration:
8.6 years
Average loan term:
15.7 years
Qualifying assets
KfW promotional programme “Renewable Energies –
Standard”
Statistics 2013
Green Bonds -
Made by KfW / September 2014
17
Number of projects:
more than 10,600
Wind energy (average loan: EUR 7.0mn)
Solar energy (average loan: EUR 0.1mn)
Biogas/-mass (average loan: EUR 0.5mn)
Hydropower (average loan: EUR 2.0mn)
Other
Source: KfW internal calculations
EUR
4,354mn
74%
23%
1%
1%
1%


Project
example:
Citizens’
wind
farm
Dürrwangen
3 Enercon wind turbines E 82-E generating 2.3 MW power each
Green Bonds -
Made by KfW / September 2014
18
Location
Germany,
Bavaria,
district
Ansbach,
municipality of  Dürrwangen
Completion
2012
Calculated
annual
production
capacity
appr.
13mn KW/h electricity
Supply area
5,000 households
Estimated
GHG
reductions
10,578 tons
GHG per annum
Total
project
costs
EUR
11.7mn
(of
which
KfW
funds:
EUR
1.2mn)


Green Bonds –
Made by KfW
Management of proceeds
19
Net proceeds from the sale of KfW Green Bonds will be used in KfW’s general business, but
KfW will set-up a separate internal green bond account within its accounting system.
An amount equal to the net proceeds of any KfW Green Bond (converted into euros) will be
allocated to the green bond account after issuance.
Amounts matching requests for disbursements under KfW’s programme “Renewable Energies
Standard”
since the start of the calendar year of issuance will be deducted from the balance
of this internal account on an ongoing basis (First In, First Out).
Any KfW Green Bond will be reported as fully allocated when the cumulated requests for
disbursements total the net proceeds from the issuance. KfW expects full allocation by end of
the year of issuance at the latest.
The maturity of any KfW Green Bond will not exceed prior year’s average duration of loan
commitments
under
KfW’s
programme
“Renewable
Energies –
Standard”
(2013:
8.6
years).
Transparent and efficient tracking method ensures  investments in renewable energies
Green Bonds -
Made by KfW / September 2014


Green Bonds –
Made by KfW
Reporting
20
The following information will be made available on www.kfw.de/greenbonds:
Regular and transparent reporting
Green Bonds -
Made by KfW / September 2014
Quarterly
update
on
requests
for
disbursements
with
respect
to
loans
granted
under KfW’s programme “Renewable Energies – Standard” until the Green 
Bond proceeds have been allocated in full.
Final
impact
report
once
the
impact
of
the
renewable
energies
programme
has
been
certified
by
ZSW
for
the
respective
year.


21
Impact of KfW programme “Renewable Energies”
Module
Standard
&
Premium,
excluding
projects
outside
Germany
(1)
2010
2011
(2)
2012
(2)
2013
(3)
Commitment volume (EUR in billions)
8.9
6.3
7.1
3.6
Investment mobilised (EUR in billions)
11.0
8.3
10.0
Not yet available
Jobs created and secured (for one year)
61,700
56,800
73,500
Not yet available
Reduction in greenhouse gas emissions
(GHG
equivalents
per
annum
in
mn
tons
over
the
projects’
life
cycle)
4.8
5.1
6.6
4.4
Fossil fuel imports to Germany avoided                
(per annum EUR in millions)
350
430
460
Not yet available
(1)
Does not include KfW IPEX-Bank project finance in Germany.
(2)
For the purpose of comparability, the new KfW-programme “Offshore wind energy”, introduced in 2011 has been omitted.
(3)
Only module Standard. Reduction in GHG emissions forecasted by KfW and not yet certified.
Source: Center for Solar Energy and Hydrogen Research Baden-Württemberg (ZSW) (2010, 2011, 2012)
Certified by
Green Bonds -
Made by KfW / September 2014


Green Bonds –
Made by KfW
The process behind it
22
Center for International Climate and
Environmental Research Oslo
Independent, non-profit research
centre associated with the
University of Oslo / Norway.
Longest and largest experience
as provider of 2nd opinions on
Green Bonds.
Environmental
impact certified by
Center for Solar Energy and
Hydrogen Research
Baden-Württemberg
Non-profit foundation established in
1988 by the German state of
Baden-Württemberg together with
universities, research institutions,
and commercial firms.
Green Bonds -
Made by KfW / September 2014
1. Qualifying
assets
2. Transparent
tracking
method
3. Reporting
2  
Opinion by
nd


Key figures on KfW and its funding
programme


Green Bonds -
Made by KfW / September 2014
24
Key financial figures of KfW Group (IFRS)
Solid business performance
2012
2013
H1/2014
Business
activities
(in
EUR
bn)
for
the
period
Promotional business volume
73.4
72.5
31.7
Income
statement
key
figures
(in
EUR
mn)
for
the
period
Operating result before valuation & promotional activities
2,836
2,302
1,034
Consolidated profit
2,413
1,273
889
Consolidated profit before IFRS effects from hedging
2,259
1,299
877
Balance
sheet
(in
EUR
bn)
at
the
end
of
the
period
Total assets
509.4
464.8
475.0
Equity
18.2
20.5
21.3
Volume of business
585.2
545.4
555.3
Key
regulatory
figures
(in
%)
(1)
at
the
end
of
the
period
Tier 1 capital ratio
18.2%
20.6%
15.1%
Total capital ratio
20.6%
22.3%
16.0%
(1)
Calculated
voluntarily
for
internal
purposes
on
the
basis
of
relevant
legal
regulations.
2012,
2013:
Basel
II
regime;
2014:
Basel
III
regime.


25
Solid business performance on a high level
Stable new business and total assets, decreasing profits, increasing risk
provisions
0
25
50
75
100
2010
2011
2012
2013
Total promotional business volume
81.4
70.4
73.4
72.5
In EUR bn
Decreasing from a
very high level.
About 72% domestic,
28% int’l business.
Stable development
over the years.
Trend:
0
1
2
3
2010
2011
2012
2013
Consolidated profit
2.6
2.1
2.4
1.3
In EUR bn
Decreasing from a
very high level.
Driven by interest
income due to favour-
able funding.
Still well above long-
term average.
Trend:
0
100
200
300
400
500
2010
2011
2012
2013
Total assets
442
495
509
465
In EUR bn
Consolidating on a
high level.
Germany’s 3rd largest
credit institution in
terms of total assets.
Trend:
-500
-100
300
2010
2011
2012
2013
Risk provisions
-424
-185
155
311
In EUR mn
Reversal of risk
provisions in 2010/11.
Risk provisioning back
to normal.
Conservative risk
policy.
Trend:
Green Bonds -
Made by KfW / September 2014


26
Explicit and direct guarantee from the
Federal Republic of Germany
Basis of KfW’s funding
§
1a of the Law concerning KfW:
The Federal Republic guarantees all obligations of KfW
in respect of loans extended to and debt securities issued by KfW,
fixed forward transactions or options entered into by
KfW and other credits extended to KfW as well as
credits extended to third parties inasmuch as they are expressly
guaranteed by KfW.
Guarantee established in 1998
Defined by law
Direct, explicit and unconditional
Green Bonds -
Made by KfW / September 2014


27
KfW’s funding: three pillar strategy
A well-structured range of products offers suitable opportunities
for various investors’
needs
Large and liquid bonds in
EUR and USD
at least 3, 5 and 10 year
benchmark maturities each
year
Target benchmark sizes:
EUR
3
5bn
USD
3
5bn
Large and liquid bonds
in non-benchmark
maturities with or   
without call option
(EUR und USD)
in strategic markets
(GBP, AUD, SEK, JPY,
CNH, NOK, CHF …)
in further currencies
Other structured public
bonds in various currencies
Customized products for
investor needs
Flexible in currency,
structure and maturity
2013: 11 transactions
2013: 113 transactions
2013: 94 transactions
Other public transactions
Private placements
Benchmark programme
2013: EUR 65.4bn
2014
target:
EUR
55
-
60bn
59%
37%
4%
Green Bonds -
Made by KfW / September 2014


KfW Bonds -
In good times and bad times: always a safe investment / September 2014
28
Capital markets
Strong presence in the capital markets
Funding volume
(in EUR bn)
Capitalization
(as of 31.12.2013)
Benchmark bonds
Public transactions
Private placements
Total
EUR 432.1 bn
Already raised in 2014:
EUR 38.2 bn
(as of July 31, 2014)
65.4
78.7
79.7
55 -
60
0
10
20
30
40
50
60
70
80
90
2011
2012
2013
2014e
6%
3%
5%
1%
85%
Capital market
Money market
Other liabilities (primarily to the Federal Republic of Germany)
Subordinated capital
Equity


29
KfW’s funding by currencies and instruments
Benchmark bonds are key –
core currencies Euro and US Dollar
Benchmark bonds
Instruments
(in %)
Currencies
(in %)
Public transactions
Private placements
2010 (EUR 76.4bn)
2011 (EUR 79.7bn)
2013 (EUR 65.4bn)
Green Bonds -
Made by KfW / September 2014
2012 (EUR 78.7bn)
1-6/2014 (EUR 36.5bn)
0
10
20
30
40
50
60
70
0
10
20
30
40
50
60
70


30
Contact
Treasurer of KfW:
Ext.
Dr. Frank Czichowski
-
2165
Capital Markets:
Horst Seissinger
-
2048
Petra Wehlert
-
4274
Alexander Liebethal
-
4656
Investor Relations:
Jürgen Köstner
-
3536               
Dorota Blecka                          
Serviceline
-
2222
KfW Group
Palmengartenstrasse 5–9
60325 Frankfurt am Main
Phone +49 69 7431 -
Ext
Fax +49 69 7431 -
3986
Investor.relations@kfw.de
Bloomberg: KfW<GO>
www.kfw.de/investor-relations
Sign up here for our
newsletter service
Green Bonds -
Made by KfW / September 2014
-
8537


31
Disclaimer
The issuer has filed a registration statement (including a prospectus) with the SEC for the offering
to which this communication relates. Before you invest, you should read the prospectus in that
registration statement and other documents the issuer has filed with the SEC for more complete
information about the issuer and this offering. You may get these documents for free by visiting
EDGAR on the SEC website at www.sec.gov. KfW’s prospectus supplement relating to the bonds
is available through the following link:
KfW’s base prospectus relating to SEC-registered notes is available through the following link:
Alternatively, the issuer will arrange to send you the prospectus, which you may request by calling
collect
1-800-292-0049
(for
the
operator)
and
then
069-7431-22-22
(for
KfW’s
Investor
Relations
Team) or by emailing investor.relations@kfw.de.
Green Bonds -
Made by KfW / September 2014