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04.02.2022 | KPMG Law Insights

Update on BEG: Applications received up to the stop in the KfW program for efficiency houses are to be reviewed

U-turn on KfW funding: according to the publication of the Federal Ministry of Economics and Climate Protection (BMWK) of January 24, 2022, the funding for energy-efficient buildings of the state development bank KfW should be
with immediate effect
be stopped prematurely. Now, however, Robert Habeck, the Federal Minister of Economics and Climate Protection, has stated that all applications submitted before January 24, 2022, will be processed according to the previous criteria.

Changes in BEG funding

With the BEG, the federal government’s energy-related building subsidies were restructured in implementation of the former BMWi’s subsidy strategy “Energy Efficiency and Heat from Renewable Energies”. The main content of BEG funding is the guidelines for the three subprograms Residential Buildings(BEG WG), Non-residential Buildings (BEGNWG) and Individual Measures(BEG EM). Accordingly, development loans and grants from the BEG can be applied for, provided that certain eligibility requirements were met.

On January 24, 2022, the ministry led by Federal Minister of Economics and Climate Protection Robert Habeck initially announced with surprise that the enormous flood of applications in the month of January had significantly exceeded the funds made available. According to the report, the funds of EUR 5 billion available to KfW under the provisional budget management for the BEG had already been fully utilized. As a result, the approval of applications under the federal subsidy for KfW ‘s BEG should be subject to a temporary program freeze. Against the background of the announcement of the immediate discontinuation of BEG funding, it was initially unclear how a decision would be made on how to deal with the EH/EG55 and EH/EG40 applications that had already been received by KfW but had not yet received a decision; after all, according to the BMWK, this involves around 24,000 open applications. However, on February 1, 2022, it was announced that applications submitted up to the application freeze on January 24, 2022, would now be processed under the previous criteria after all. Funding applications that have already been approved are also not affected by the funding freeze, so that (once again) there is a legally secure solution for all funding applications.

According to the latest communication from the BMWK, the following applies to the individual funding programs:

  • Financial support for so-called Efficiency Houses/Efficiency Buildings 55 in new construction(EH/EG55) has been permanently discontinued, bringing forward the expiration of the program, previously scheduled for January 31, 2022, to January 24, 2022.
  • Funding for the KfW program area of Efficiency House/Efficiency Building 40 in new construction(EH/EG40) has also been stopped for the time being. A decision on the future of new construction funding available for EH40 new construction is to be made expeditiously.
  • Funding for energy-efficient renovations has also been halted for the time being, but is to be resumed in the near future. However, the responsible ministries have not yet announced when the corresponding budget funds will be made available and the subsidies for energy-efficient refurbishments will be resumed.

BAFA’s BEG subsidy programs continue unchanged.

Important to know

In the publication of January 24, 2022, it was also stated that “ambitious, holistically oriented climate policy funding for new buildings is to be set up”. In the coalition agreement, the parties of the “traffic light” coalition have already agreed on the introduction of a new subsidy program for new residential construction after the expiry of the subsidy for the KfW Efficiency House Standard 55 (EH 55). This is intended to focus in particular on greenhouse gas (GHG) emissions per m² of living space.

We will keep you informed of further developments in this regard. We will also be happy to answer any questions you may have on the subject of BEG. For details of the BEG, we would also like to refer you to our articles published in August 2021 and November 2021.

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