100 billion euro cheap money for renewable projects

Reuters reports that the German state development bank KfW announced that they plan to lend about 100 billion euro to renewable energy and energy efficiency projects. Thanks to this tweet by Kevin Meyerson for the link.

That’s nice because loans from the KfW come at very low interest rates. They just cut their rates again in May to 1 percent for their Energy Efficiency Program. That is possible because they enjoy great refinancing conditions. With the present uncertainty on the government bond market in Europe, Germany can issue bonds at close to or below zero interest.

Anyone who has ever played around a bit with the NREL “Levelized Cost of Electricity” calculator knows that interest rate for capital are an extremely important factor for the cost per kWh.

With solar and wind, almost all of the cost is up front. If you can get financing at close to zero cost, that will have a big impact.

And a 100 billion euro is an order of magnitude that might start getting results.

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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