Deutsche Investitions und Entwicklungsgesellschaft (DEG)
Last updated on 10 Mar 2024

Key facts


German development finance institution owned by KfW Bankengruppe that offers financing, advice, and support to private sector enterprises operating in developing and emerging-market countries. DEG is one of Europe's largest DFIs.

Kämmergasse 22
50676 Köln
Germany

+49 (0) 221 4986-0

www.deginvest.de
PUBLIC
1962
Credit rating (S&P)
AA+
Foreign currency

Authorizations and exposure


FY 2022 authorizations top customer clusters

Financial institutions
37%
Corporates
35%
Funds
18%
Project finance
10%

FY 2022 authorizations

Asia

35 %

Latin America

25 %

Middle East and Africa

26 %

Europe

9 %

Other

5 %

Products


  • DEG offers a range of services to companies investing in developing and emerging-market countries
  • DEG’s “German Desks” in Lagos, Nairobi, Accra, Dhaka, Jakarta, and Lima can help and guide German companies through processes such as account creation through trade finance and transaction banking services to credit lines or investment financing for local trading partners
  • DEG can provide long-term loans:
    • Tenors between 4 and 10 years
    • Loans are available in EUR, USD, and some local currencies
    • Collateralized by borrower’s fixed assets in the investment country
  • DEG may provide direct investments in the foreign investments of German companies
    • DEG is always a minority investor
    • Case-by-case voting rights and seat on supervisory board
    • Clearly defined exit strategy
  • DEG can also provide mezzanine subordinated financing:
    • Financing form between equity capital and debt capital
    • Project-specific structuring
    • Subordinated collateral
    • Term: generally 10 years, but also longer
    • Risk-appropriate return
    • Possibility of conversion to equity, if appropriate
  • DEG has promotional programs to support corporates in a targeted way. In this way, we can co-finance various accompanying measures:
    • ImpactConnect: DEG helps European companies enter emerging markets with long-term loans. Investments in reform-oriented African countries are specifically promoted and facilitated through a special model of risk sharing
    • Business Support Services (BSS): Measures that support investments contribute to advancing developmental broad-based and structural effects and help further professionalisation
    • develoPPP.de: Four times a year a develoPPP.de ideas competition is held for companies to submit their proposals. A total of up to EUR 2 million can be provided towards each project
    • Up-Scaling: DEG finances innovative pioneering investments of German and local small and medium-sized enterprises (SME) in developing countries that are in the start-up phase. Projects such as these can be co-financed by up to EUR 500,000 ‒ repayable on success
  • DEG can provide direct loans to financial institutions in order to promote credit lines for SMEs as well as investments in energy efficiency
    • Tenors typically between 4 and 7 years (but could be longer)
    • Loans are available in EUR, USD, and some local currencies
  • DEG also provides equity capital to financial institutions
    • DEG is always a minority investor
    • Case-by-case voting rights and seat on supervisory board
    • Clearly defined exit strategy
  • DEG can also provide mezzanine subordinated financing to financial institutions
    • Tenor typically 10 years but could be longer
    • May be convertible to equity
  • DEG offers a variety of Business Support Services in connection with planned or existing financings
  • Up-Scaling: Promoting innovative business models:
    • DEG finances innovative pioneering investments of German and local finance institutions in developing countries that are in the start-up phase
    • May be co-financed by up to EUR 500,000 ‒ repayable on success
  • E-Learning Platform on Sustainability and Corporate Governance:
    • Employees of financial institutions can learn in interactive courses offered by KfW and DEG on the "E-Learning Platform on Sustainability and Corporate Governance” how to identify, avoid and manage the risks and impacts of their financing in accordance with international standards
  • DEG may provide advisory services to and make investments in private equity funds investing in emerging markets
    • Subscription generally as early as first closing
    • Representation of investors and advice for general partner through seat on the fund's advisory committee
    • Fund investments starting from USD 10 million and a DEG share of less than 20% in the final closing
  • In some cases, DEG may provide loans to private equity funds
  • DEG provides long-term project finance loans in the energy, transport, utilities, and telecommunications sectors
    • Tenors between 4 and 21 years
    • Amount: USD 15-60 million
    • Loans are available in EUR, USD, and some local currencies
    • Collateralized by borrower’s fixed assets in the investment country
  • DEG may also provide equity investment and mezzanine financing and bonds for project financings

Policies


  • DEG has strict standards on the environmental and socioeconomic impact of its investments and financings
  • DEG measures its development impact and effectiveness across five key outcome categories: decent jobs, local income, market and sector development, environmental stewardship, and community benefits

News


  • 2024: From emergency aid to reconstruction: KfW remains on Ukraine’s side as one of the largest promotional banks
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