DEG invests EUR 1.85 billion in developing countries
Press Release from 2020-02-14 / DEG
The business development of DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH was again positive in 2019: it committed EUR 1.85 billion to finance private investments in developing and emerging market countries, continuing the previous year's good figure (2018: EUR 1.87 billion). DEG mobilised a further EUR 277 million via development banks and private institutional investors. The DEG portfolio grew to EUR 9.0 billion (2018: EUR 8.4 billion).
2.1 million employees in companies financed by DEG
"The development of new business and the portfolio is particularly encouraging in view of a generally challenging market environment. This also applies to the developmental impact of the investments financed by DEG. For example, our customers employ 2.1 million people in developing countries and generate local income of EUR 92 billion annually, of which around EUR 12 billion is for wages and salaries," said Christiane Laibach, Chairwoman and designated CEO of DEG's Management Board.
EUR 691 million for climate and environmental protection investments
DEG provided a total of EUR 691 million in 2019 for investments that promote climate and environmental protection (2018: EUR 641 million). An example of this was funding of a sustainable energy supply for mobile phone masts in Africa and the Middle East. In the German business, DEG committed EUR 429 million of its own funds (2018: EUR 399 million). These funds are used to finance direct investments by German companies as well as local companies that purchase German equipment, for example.
Broken down by continent, most new business in 2019 was in Asia at EUR 632 million. In terms of sectors, the financial sector and manufacturing industry were in the lead. Financing for small and medium-sized enterprises, at EUR 1.1 billion, was again a focus.
Advisory and promotional services expanded further
Private companies in developing countries face special challenges, resulting in a corresponding need for advice. This is where DEG's Business Support Services come into play. "Through our advisory services, we provide support specifically for companies to improve their energy efficiency or gain qualifications for local employees. This generates added value, both from a business and developmental viewpoint," commented Christiane Laibach. A new service is a "working capital check", which helps companies to save working capital and increase their liquidity as a result. Pilot projects and feasibility studies may also be co-financed by DEG promotional programmes.
Through AfricaConnect, DEG has been offering European companies a new programme for investment projects in Africa since the summer of 2019. One of the first financings went to the Munich-based company fairafric GmbH for the production of organic chocolate in Ghana.
DEG expects to continue operating in a dynamic and challenging market environment in 2020. It aims to keep new business at the level of previous years. DEG intends to expand the range of local currency financing and bonds, such as gender bonds. "In addition, we intend to advise our customers even more intensively on how to deal appropriately with climate change and further improve the developmental effectiveness of their investments," said DEG Chairwoman Christiane Laibach.