Promotional Business

NRW.BANK’s promotional offerings contribute to securing the standard of living of future generations and to improving climate and environmental protection in North Rhine-Westphalia. In addition, the Bank supports a balanced social development in the North Rhine-Westphalian regions to strengthen the stability of society. In its various facets, NRW.BANK’s promotional business thus makes an important contribution to the sustainable development of North Rhine-Westphalia.

NRW.BANK cooperates closely with other financial and promotional institutions. The Bank conducts its commercial promotional business in cooperation with the banks and savings banks in a competition-neutral manner based on the “house bank principle”. According to this principle, the Bank usually does not have direct contact with its clients but extends its promotional loans via banks and savings banks, which act as intermediaries.

As defined in the Act on NRW.BANK, municipal loans and promotional loans to central, regional and local governments as well as to public-sector special-purpose associations and subsidised housing construction programmes are extended directly by NRW.BANK.

Promotional strategy

The promotional strategy is at the core of the Bank’s overall strategy and describes fundamental objectives and measures with which NRW.BANK supports the State of North Rhine-Westphalia in fulfilling its structural and economic policy tasks and in efficiently structuring its promotional activities. The Bank’s promotional business is particularly intended to support the transformation towards sustainable and future-proof economic structures.

The key elements to ensure compliance with NRW.BANK’s sustainability standards in the promotional business are the Sustainability Strategy and the ESG Promotion Requirements, which put the strategy into more concrete terms. They reflect the Bank’s sustainability ambitions and provide specific requirements for the sustainable design of its promotional business.

With a view to the climate policy goals of the federal state, NRW.BANK’s promotional strategy for 2025–2028, which was adopted in late 2024, places a special focus on the promotion of projects aimed at conserving resources, increasing efficiency and implementing the energy transition. Other important positive sustainability objectives include the preservation of rental housing and historical monuments as well as the promotion of sport and social infrastructure. This further development of the promotional business always takes place on the basis of regular and close cooperation with the competent state ministries.

In 2024, NRW.BANK again recorded a higher-than-planned volume of new commitments of € 11.4 billion.

 

Volume of new commitments by promotional fields in € billions

SDG Mapping / Wirkungsmanagement

Sustainable Development Goals

The promotional business of NRW.BANK largely contributes to the United Nations Sustainable Development Goals (SDGs). The promotional funds made available by NRW.BANK primarily work towards SDG 11 (Sustainable Cities and Communities), SDG 8 (Decent Work and Economic Growth) and SDG 9 (Industry, Innovation and Infrastructure). About 52.7% of NRW.BANK’s volume of new commitments in 2024 contributed to SDG 11, with another 14.4% relating to SDG 8 and approximately 12.4% to SDG 9. To a high degree, NRW.BANK’s promotional programmes also support Sustainable Development Goals 13 (Climate Action) and 7 (Affordable and Clean Energy). The associated Methodology Paper shows further details of the calculation of the SDG contributions made by the promotional business.

1. No Poverty
2. Zero Hunger
3. Good Health and Well-Being
4. Quality Education
5. Gender Equality
6. Clean Water and Sanitation
7. Affordable and Clean Energy
8. Decent Work and Economic Growth
9. Industry, Innovation and Infrastructure
10. Reduced Inequalities
11. Sustainable Cities and Communities
12. Responsible Consumption and Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace, Justice and Strong Institutions
17. Partnerships for the Goals
1. No Poverty
Poverty means hunger and malnutrition, limited access to education, social discrimination and a lack of participation in decision-making processes. Developing sustainable, inclusive economic growth and building social protection systems are proven ways to fight poverty.
2. Zero Hunger
Eradicating hunger, achieving better and safer nutrition, and promoting sustainable agriculture that protects of the environment and people – with the right actions, food production can be directed towards these goals while preserving the environment.
3. Good Health and Well-Being
Further efforts are needed to ensure healthy lives and promote well-being for all, increase life expectancy, reduce child and maternal mortality and cut deaths from non-communicable diseases by one third by 2030.
4. Quality Education
Education is the foundation of sustainable development because it provides the tools for innovative problem solving. Promoting inclusive, equitable and quality education is an investment in the future.
5. Gender Equality
Women and girls continue to experience discrimination and violence in all parts of the world. Their right to gender equality is the foundation for a peaceful, modern and sustainable world. Measures to implement this legally protected right deserve to be promoted.
6. Clean Water and Sanitation
The progress made over the decade in terms of access to drinking water and wastewater disposal must be built on to combat water scarcity and poor water quality in a sustainable matter
7. Affordable and Clean Energy
Energy supports jobs, food production and prosperity. In the face of climate change, it is important to combine economic and ecological goals in a sustainable way.
8. Decent Work and Economic Growth
For everyone to share in progress, we need sustainable economic growth that creates quality jobs with good incomes, without damaging the environment.
9. Industry, Innovation and Infrastructure
Sustainable development has many dimensions: greater resource and energy efficiency, lower emissions, higher productivity, added value and income. Achieving all this requires investment in infrastructure.
10. Reduced Inequalities
The goal of reducing inequalities between and within countries is well on its way to becoming an international consensus. The sub-goals of this SDG are a more equitable distribution of resources, orderly and safe migration and an end to discrimination.
11. Sustainable Cities and Communities
All people should be able to live in safe, ecological, resilient and inclusive cities and communities. This requires, among other things, investment in affordable, sustainable housing and green mobility, so that cities can continue to provide opportunities for all in the future.
12. Responsible Consumption and Production
Sustainable consumption and production means preserving the environment and resources – whether by preventing waste, recycling waste or safely disposing of hazardous substances.
13. Climate Action
Action on climate change helps to limit the global temperature rise to 1.5 degrees Celsius, achieve greenhouse neutrality and rebuild the economy ecologically after the pandemic.
14. Life Below Water
As the planet’s largest ecosystem, the oceans and their estuaries as well as inland waters require special protection. Measures to curb littering, water acidification and destructive fishing practices contribute to this, as do measures to promote science and the transfer of technology.
15. Life on Land
Ecosystems on land must be protected from deforestation, pollution, poaching and desertification, and degraded soils and forests must be restored and sustainably managed. This is the only way to halt the loss of biodiversity.
16. Peace, Justice and Strong Institutions
The sustainable development of the global community is linked to peace, the rule of law and a fair judicial system that is accessible to all. All forms of violence, corruption and exploitation must be stopped.
17. Partnerships for the Goals
Governments, the private sector, science and civil society must work together in order to achieve the UN’s global sustainability goals. The resources needed for their implementation must be unlocked, an equitable international system established and contributions made at all levels of society.

Source: Based on UN Sustainable Development Goals; own presentation

Information about the promotion volume:
Inner circle (from the inside to the outside):
1 % / 5 % / 10 % / 20 % / 30 % / 40 % / 50 %

The projects financed through NRW.BANK's promotion programmes can make a positive contribution to the Sustainable Development Goals mentioned here, depending on how the promotional funds are used by the funding recipients.

Methodology Paper

Performance Indicators in the Promotional Business

NRW.BANK’s objectives are geared to providing the State of North Rhine-Westphalia with long-term support in performing its structural and economic tasks. Due to NRW.BANK’s public mission as the promotional bank of North Rhine-Westphalia, development and promotion is the primary business objective and the volume of new commitments represents a key performance indicator. The volume of new commitments comprises the commitments for promotional funds made in the respective fiscal year. Budget values exist for these and all other performance indicators. The Bank regularly subjects these values to plan/actual comparisons as well as scenario and forecast analyses in order to provide appropriate control stimuli.

NRW.BANK additionally records other special promotion-typical performance indicators for its promotional business. The number of funded residential units, for instance, is a performance indicator for its subsidised housing construction operations and is reported regularly. In the various special programmes of the Bank for the promotion of environmental protection, innovations and society, suitable additional promotion-related information, such as the purpose of the funded environmental projects, is documented in addition to the promotion volume.

For detailed information on the promotional business, please refer to NRW.BANK’s Financial Report.

  • Outlook: Impact Management

    Given the strategic focus on sustainability and the increasing regulatory, political and social demands, NRW.BANK is dedicated to enhancing the measurability of the impact of its promotional activities in the future. To this end, positive and measurable results for the environment and society are to be quantified in a transparent manner. The NRW.BANK Managing Board therefore decided to introduce an impact management system for the promotional business. This will lay the basis for the viable further development of the promotional offerings, and the impacts intended by NRW.BANK will become more comprehensible and tangible. In 2024, NRW.BANK developed a concept for an impact management system, which defines relevant impact categories and impact indicators. The first implementation steps are planned for 2025.

Environmental Aspects of the Promotional Business

Environmental sustainability aspects are considered throughout NRW.BANK’s range of promotional instruments and services provided. The range of services is based on three pillars: standard bank financing (including redemption discounts), advisory services and grants by assuming service functions as part of the State's grant-based promotion or by awarding grants for initial and ancillary costs in connection with standard bank financing from own funds.

As part of selected financing offers, NRW.BANK provides effective promotional incentives in the form of interest rate reductions and – from May 2025 – redemption discounts for the realisation of environmentally sustainable projects. These special programmes were successively expanded by the Bank over the past years. They are aimed, among other things, at achieving specific environmental impacts, e.g. reducing greenhouse gas emissions and saving resources, expanding climate-neutral (electric) mobility or promoting green and non-fossil energy sources. The promotion requirements are constantly adapted to the changing framework conditions and environmental standards. Apart from the above-mentioned promotional incentives, risk assumptions by NRW.BANK in the context of promotional loans also play an important role. In April 2023, the Bank introduced risk quotas to facilitate the financing of transformative projects. They are intended to make it easier for credit decision-makers to decide in favour of an environmentally transformative investment even if the risk of default is higher.

In its role as the promotional bank of the federal state, NRW.BANK sees itself as a facilitator of transformation towards a climate-neutral economy, especially for small and medium-sized enterprises (SMEs). The Bank thus contributes to achieving the state government’s goal of making North Rhine-Westphalia the first climate-neutral economic region in Europe. The underlying idea is to provide targeted incentive instruments to support enterprises in this transformation step by step. In this context, the “climate bonus” was launched. It provides additional interest rate reductions above and beyond the normal incentivisation of individual offerings for funding recipients who make their climate implications transparent and embark on a decarbonisation path. The Bank initially introduced the climate bonus for selected economic promotion programmes but plans to extend it to other economic promotion programmes as well as municipal and infrastructure promotion. Besides these transformative efforts, NRW.BANK is also considering providing incentives for the implementation of taxonomy-compliant promotional projects in the future. 

The promotion of sustainability projects is reflected in all three of NRW.BANK's fields of promotion – with different promotional measures due to the overarching importance of the topic. In 2024, the Bank made available promotional funds totalling approx. € 1.6 billion for the promotion of environmental protection and energy transition.

Above and beyond setting promotional incentives, the ESG Promotion Requirements also play a key role in both achieving positive environmental impacts and avoiding negative ones. The ESG Promotion Requirements are mandatory for the entire promotional business, with a few justified exceptions, and include knock-out criteria and sector guidelines. The knock-out criteria effectively exclude controversial business practices and activities as well as specific sectors from funding, advice and grant-based promotion. In this way, minimum standards are set that go beyond the legal framework, for example in the areas of animal husbandry and utilisation, mobility and energy generation. This ensures that sustainability aspects are also taken into account beyond the special programmes.

The knock-out criteria listed in the ESG Promotion Requirements are not limited to the environmental dimension of sustainability but also include social and governance aspects. The full knock-out criteria of NRW.BANK are published transparently and continuously evaluated and refined.

As a key measure for achieving greenhouse gas neutrality in its promotional business by 2045, NRW.BANK introduced sector guidelines for selected greenhouse gas-intensive sectors at the beginning of 2025. The sector guidelines, which are based on the guidelines of the same name of KfW, provide the framework for aligning the new business under NRW.BANK’s control with the temperature target of the Paris Climate Agreement. The guidelines cover the sectors:

  • Automotive
  • Iron and steel production
  • Buildings
  • Aviation
  • Shipping
  • Oil and natural gas
  • Power generation

Within these seven sectors, specific minimum requirements for the climate compatibility of financed technologies are defined and scientifically derived from the recognised Paris-compatible climate scenarios of the International Energy Agency (IEA). The guidelines specify the mix of transitional and transformative technologies which can be used to successfully shape the transformation towards greenhouse gas neutrality in the individual sectors.

NRW.BANK will continue to increasingly promote transformative technologies and business models that contribute directly to the targeted greenhouse gas neutrality (such as renewable energies and green hydrogen).

The sector guidelines developed by KfW in cooperation with the Fraunhofer Institute already apply to most of its promotional programmes. The scope of application will increase over time as more programmes are included as a result of product adaptations or extensions. The demands made on the business activities will also increase over time. KfW’s sector guidelines already apply to NRW.BANK’s on-lending business.

The topic of “environmental sustainability” is also taken into account at a procedural level and is anchored in the product development process for the Bank’s promotional product portfolio. Before the product development process begins, each new product idea is assessed for alignment with NRW.BANK's strategic sustainability goals. Sustainability experts from NRW.BANK are routinely involved throughout the product development process to ensure compliance with NRW.BANK's sustainability strategy. As far as this is compatible with the primary objective of a product idea, environmental sustainability aspects are also considered as part of the product design process. This ensures that environmental aspects are always taken into account and risks from investments in "stranded assets"[1] are avoided for the Bank.

[1]Definition from Gabler Banklexikon: "Stranded assets are generally understood to be assets (e.g. company shares, technical equipment or (raw material) inventories) whose earning power or market value has unexpectedly declined dramatically to the point where they are completely or largely worthless. This may require significant write-downs or premature write-offs by their owners, or even lead to a (payment) obligation. The term ‘stranded assets’ has recently gained prominence in the context of sustainable finance. It refers primarily to environmental and climate-related factors that may render assets worthless within a relatively short period of time, thus posing a threat not only to individual companies and sectors, but also to their investors and to the stability of the financial market as a whole.” (Translated from the original German for convenience).

Social Aspects of the Promotional Business

As a general principle, far-reaching measures aimed at achieving environmental sustainability goals should be designed in a socially acceptable way to ensure that they are accepted by society. All population groups should be involved in this comprehensive process of change. Corporate social responsibility is also becoming increasingly important – including against the backdrop of demographic developments. Taking into account social aspects such as the creation and preservation of jobs, the promotion of education and health or the protection of human rights is therefore a key concern for NRW.BANK itself.

Enhancing social sustainability in North Rhine-Westphalia – especially with regard to social participation – also remains a key strategic focus for NRW.BANK. As regards the social dimension, NRW.BANK is therefore committed to a society worth living in that offers equal rights and opportunities to all people in NRW and does not exclude or disadvantage individuals.

The instruments used to support social sustainability include, in particular, interest rate reductions and, for individual products, redemption discounts on promotional loans, risk sharing with house banks, the provision of equity and mezzanine capital and, in future, probably grants from own funds for initial or ancillary costs in connection with standard bank financing. In this context, NRW.BANK provides non-discriminatory access to promotional funds.

The Bank has committed itself, among other things, to providing an affordable and diversified supply of transgenerational housing meeting actual demand and of an attractive housing environment in socially stable neighbourhoods.

As part of its subsidised housing construction activities, NRW.BANK helps to provide affordable, high-quality housing for low-income earners. One of the aims is to increase the supply of housing also in densely populated areas characterised by rising rents. In this context, demographic developments that call for new forms of housing – also in connection with support and care services for the elderly – are also taken into account. These loans serve to finance the creation and the modernisation of social rental housing as well as the acquisition of owner-occupied housing in order to make it easier for households below a certain income threshold (“threshold households”) to acquire their own homes that meet their needs. Housing promotion also includes special offerings for people with disabilities as well as students. It is always conditional on compliance with certain social criteria (especially income thresholds) for tenants or owners and thus leads to positive impacts in the social dimension of sustainability with regard to these target groups. In 2024, the Bank once again increased the volume of new commitments to subsidise a total of 12,847 residential units in the context of publicly subsidised housing construction.

In addition to publicly subsidised housing construction, NRW.BANK also grants loans for the construction and purchase of privately used residential properties with a very long fixed-interest term under its NRW.BANK.Wohneigentum programme. By linking the eligibility to apply to income limits that are above the limits of publicly subsidised housing construction, this programme also includes a social component. Projects for raising energy efficiency as well as barrier-free refurbishment measures for privately owned buildings are supported under the NRW.BANK.Gebäudesanierung programme, to which new purposes were added in 2024. As a complement to the federal government’s promotional offerings, the NRW.BANK.Nachhaltig Wohnen programme promotes new buildings and modernisation projects that are especially energy-efficient with particularly favourable interest rates. Due to a funding freeze at KfW, the interest rate reductions for this programme were increased substantially until into the first quarter 2024.

Another important commitment of NRW.BANK with regard to the social aspect of sustainability is its support for municipalities in North Rhine-Westphalia. In particular, the Bank supports municipalities in strengthening the social infrastructure and financing municipal services of general interest.

This is done with the help of both standardised promotional programmes and customised individual financing solutions. The latter are provided for corporate financings and for project financings. In 2024, NRW.BANK increased the interest rate reductions for some of these programmes quite substantially. In addition, the Bank optimised the structure of the infrastructure programmes.

In the municipal sector, for instance, NRW.BANK offers municipal school operators and municipal school associations long-term loans with maturities of up to 30 years to support the construction and refurbishing of school buildings. In spring 2022, NRW.BANK moreover implemented a promotional loan programme with particularly low interest rates to assist municipalities in providing accommodation for refugees, especially from Ukraine.

The mobilisation of private capital plays an important role in the expansion and modernisation of infrastructure in North Rhine-Westphalia. NRW.BANK therefore offers favourable terms and conditions to encourage corporate investment in social and public infrastructure projects. In addition, the Bank supports corporate infrastructure projects through syndicated loans with other banks. The Bank will also continue to support the State of NRW in improving the carbon footprint of universities and university hospitals.

NRW.BANK promotes social sustainability also by opening some of the economic promotion programmes to non-profit enterprises and commercial social enterprises.

The knock-out criteria listed in the ESG Promotion Requirements also include social and governance aspects. For all projects (co-)financed by NRW.BANK, the beneficiaries of its promotional programmes are obliged to also comply at least with the social law requirements and standards applicable in the country of investment. NRW.BANK publishes its knock-out criteria transparently, evaluates them continuously and refines and optimises them.

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