The European Investment Bank (EIB) has granted Berlin housing construction company degewo a EUR 250 million loan to finance its programme of investment in new construction and retrofitting of over 5 000 housing units in Berlin. Part of the newly built housing will meet energy efficiency standards exceeding the norms and corresponding to KfW Standard 55.

The finance contract between the EU bank and state-owned degewo was signed on 31 May. This urban development loan will secure the housing supply in Berlin and ensure that accommodation in the city remains affordable even after essential upgrading.

Ambroise Fayolle, EIB Vice-President responsible for operations in Germany, stressed that: “The EIB can look back on a long tradition of financing sustainable urban housing. Such projects create affordable accommodation and contribute to enhancing people’s standard of living and quality of life. At the same, improving energy efficiency reduces households’ costs and helps to combat climate change.” The Vice-President went on to say: “The EIB never finances projects on its own. I therefore emphatically welcome the fact that in degewo, with which we are working together for the first time, we have now found in Berlin another competent and reliable partner for promoting sustainable urban development.”

“The EIB’s favourable interest terms will enable us to further reduce our funding costs and keep them low on a long-term basis. This will allow us to make concessions on rents for new builds and refurbishments and to invest further in our growth. Alongside optimised management and cost-effective building strategies, such financing concepts also help to keep rents low for our customers”, said degewo board member Christoph Beck.

degewo is receiving this EIB urban development finance in the form of a loan for its social housing investment programme. Through the long interest rate lock-down periods, degewo hopes to keep its future interest costs low. The overall programme cofinanced by the EIB will cost around EUR 550 million. degewo will be able to finance part of its long-term programme of investment in new construction and retrofitting of social and low-cost housing with the proceeds of this urban development loan for the next three or four years.