DEG announces positive results for the 2023 financial year

Successful year both financially and in terms of development policy

DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), a subsidiary of KfW Group, announces successful results for the 2023 financial year. It committed around EUR 1.9 billion for private sector investment in developing and emerging market countries (2022: EUR 1.6 billion) and mobilised a further EUR 613 million from other capital providers. The portfolio grew to EUR 10.3 billion, passing the 10-billion threshold for the first time. DEG achieved a positive operating result once again in the reporting year, which strengthened its equity basis and thus its ability to boost its promotional business.

“We can look back on a solid year, in which we achieved our goals – and even exceeded some of them – in what was still a very challenging environment. This shows that DEG is in demand even – and especially – in difficult times. We continued to pursue our Impact.Climate.Returns. strategy in 2023 and expanded our advisory services for companies on their transformation journey,” commented CEO of DEG Roland Siller.

Risk provisions reduced; improved profit for financial year

The operating result (operating result before provision for risk and valuation effects from currency) amounted to EUR 213 million (2022: EUR 248 million). Net interest income and the result from participating interests were significant earnings factors. The company also reduced its risk provisions, which had initially increased considerably as a result of the war in Ukraine. Overall, DEG achieved a profit before tax of EUR 94 million (2022: EUR 22 million).

DEG closed the 2023 financial year with a net profit of EUR 62 million (2022: EUR 10 million). As in the past, the net profit was appropriated to retained earnings in order to further strengthen DEG’s equity. With equity resources of around EUR 2.6 billion, DEG continues to have adequate risk-bearing capacity to fulfil its mandate in accordance with its Articles of Association.

Development impact further increased

The development impact of DEG-financed projects was positive in 2023. For instance, DEG’s existing customers employed some 3.3 million people and generated local income of EUR 235 billion in the reporting year. Co-financed renewable energy projects produced 31 TWh of green electricity for approximately 32 million people last year, thereby avoiding more than 22 million tonnes of CO2 emissions.

DEG expects the market environment to remain difficult in 2024 and to be in demand as a development finance institution. “The role of players that involve the private sector and mobilise further funds will become increasingly important. We are therefore confident that DEG will continue to make a key contribution to financing enterprises in developing countries in line with their needs and supporting them in their transformation. We see a rising need for this as also our customers with investments in emerging and developing economies are particularly affected by climate change,” CEO Siller said.

Customer survey underscores DEG’s important role

The results of a recent customer survey underscore, among other things, the importance of DEG’s ESG expertise and the support it provides in mobilising funds from other investors for DEG’s customers in developing countries. The co-financed enterprises recognise DEG as a professional, strategic partner. They consider business resilience, access to long-term financing and qualified staff, and sustainability to be particularly important action areas.