The FINANCIAL -- In 2012, DEG – Deutsche
Investitions- und Entwicklungsgesellschaft mbh, once again managed to
extend its new business: last year, it provided around 1.3 billion euros
to finance private-sector investments in developing and emerging-market
"As a pioneer investor, DEG taps into future markets and demonstrates that private-sector commitment is possible even under difficult conditions and that it makes valuable contributions to development," said Bruno Wenn, Chairman of DEG's Management Board. Also in its 50th year of existence, DEG's new commitments created a substantial leverage effect, facilitating entrepreneurial investments worth 12.1 billion euros.
Many of DEG's partner countries are also included amongst the future markets for German corporates, a target group of DEG. In 2012, DEG provided this group with around 182 million euros to finance foreign investments, which is significantly above the previous year's figure (2011: 99 million euros). "German enterprises can play an important role in supporting development while at the same time benefiting from the opportunities that developing and emerging-market countries generate," stated Wenn. One of the five key areas that DEG identified as part of its business strategy 2012 is therefore to finance and accompany German enterprises in developing and emerging-market countries.
Also the results achieved in the other key areas last year, i.e. private-sector promotion in Africa, financing of small and medium-sized enterprises, climate and environmental protection and a large share of equity commitments, were positive.
In Africa, new commitments accounted for 235 million euros and were slightly above the previous year's level (2011: 233 million euros). The majority thereof, 204 million euros, went to Sub-Saharan Africa. One example is the Kenyan fruit juice producer Kevian Kenya Ltd. DEG provided Kevian with a loan of 7.5 million US-dollars, which the medium-sized company uses to increase its production capacity in order to produce the required fruit juice concentrate itself. The necessary fruits does Kevian buy from smallholders. A state of the art PET filling machine from Germany is used in production and a substantial part of Kevian's fruit concentrate is exported to Germany.
Around 465 million euros (2011: 527 million euros) of DEG's new commitments in 2012 went to small and medium-sized enterprises, thus contributing to a broader range of long-term financing for SMEs. DEG provided more than 384 million euros for climate-friendly investments, which is well above the previous year's amount (2011: 193 million euros). Risk capital financing in form of equity participations and mezzanine finance totalled EUR 506 million, reaching once more last year's record level (2011: 509 million euros).
As regards regions, Latin America accounted for the greatest portion of new commitments, with 497 million euros (2011: 348 million euros). As KfW in Asia, new business was at 388 million euros (2011: 418 million euros) and in the region of Europe / Caucasus, new commitments accounted for 205 million euros (2011: 186 million euros). As regards sectors, the focus of new business was on the manufacturing industry with new commitments of 352 million euros (2011: 270 million euros) and on the financial sector with 380 million euros (2011: 506 million euros).
Private-sector commitment is a major engine for development and employment. The companies co-financed by DEG in 2012 will create or secure around 435,000 jobs. Furthermore they contribute to annual governmental revenues of approximately 827 million euros, generating net foreign-exchange income of around 4.1 billion euros a year. "These contributions by the private sector can be used to reduce budget deficits, boost foreign exchange revenue in a sustainable way and enable investments," stated DEG Chairman Wenn.
DEG supplements its financings from own funds by funds from the Federal government. This includes, among others, the programme Development Partnerships with the Private Sector, in short develoPPP.de, of the Federal Ministry for Economic Cooperation and Development (BMZ). Last year, DEG supported 73 new projects with 13.9 million euros from funds from develoPPP.de. Of these, 61 were projects with German partners.
2012 was a particular year for DEG: it turned 50. Under the slogan "Courage to develop", the development finance institution gave a first-hand impression of its work in an international and local context through different events and publications.