DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH

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P.O. Box 10 09 61
50449 Cologne
Germany
Tel: +49 221 49 86 0
Fax: +49 221 49 86 1290
Email: info@deginvest.de
www.deginvest.de

General Information

DEG is one of the largest European development finance institutions for the private sector. DEG, a subsidiary of KfW, finances private sector investments in developing countries, aiming to improve the living conditions of the people in the investment countries.

Therefore, DEG invests in projects which contribute to sustainable development, meet international environmental standards and comply with social principles. It finances investment projects in all sectors of the economy: agriculture, infrastructure, manufacturing and services. A further focus is the financial sector in order to facilitate reliable access to long-term capital for local companies.

DEG provides long-term capital in the form of risk capital – equity capital, mezzanine finance –, loans and guarantees. In cooperation with its customers, DEG structures finance packages customised to the individual investment project and its specific conditions. This helps to ensure that the investments are going to be successful in the long term. In addition, DEG runs special programmes on behalf of the German federal government, co-financing measures of private enterprises investing in developing countries.

Capital alone is not the key to success. As well as providing finance, DEG offers enterprises the advice they need and supports them throughout the entire period of their involvement. Clients are able to benefit from DEG’s 50 years of international experience and expertise in providing finance and managing risk. Solutions tailored to the individual project and the risk situation in the investment country are developed jointly. Even in difficult situations or times of crisis, DEG always remains a reliable partner with a long-term commitment.

Small and medium-size enterprises – the backbone of many economies – are one of DEG’s main target groups, since SMEs in particular hardly ever have reliable access to investment capital. To improve the range of finance on offer, DEG makes capital available to them directly. But it also finances banks and investment companies in its partner countries, which in turn provide investment capital to local enterprises.

DEG’s current portfolio is around EUR 5 6 billion (end 2012). With these commitments, DEG contributes to an overall investment volume of EUR 39 billion.

In 2012 alone, DEG committed EUR 1.3 billion for new investments. With regard to developmental impacts, this helps creating and securing 435.000 jobs. Furthermore, the companies co-financed in 2012 contribute to government revenues of around EUR 4,1 billion annually and generate about EUR 827 million in net foreign exchange revenues per year.

DEG cooperates in international networks, packaging finance, standards and know-how in an efficient manner. Besides EDFI, its partners are bilateral and multilateral development finance institutions such as the European Investment Bank (EIB), the International Finance Corporation (IFC) and regional development banks.

 


Instruments

DEG offers equity capital and mezzanine finance as well as long term loans and guarantees. For every investment project, it develops tailor-made and risk-appropriate finance solutions.


Equity

DEG’s equity participation in the project in the investment country, usually about 5-25%. Minority stake, usually over a limited period. Variable arrangements of the risk components. In certain cases, voting rights and seat on the board of directors of the company. Clearly defined exit strategies.

Mezzanine Finance

Project-specific arrangement. Subordination.Risk-oriented yield.Conversion options.

Long-term Loans

EUR or USD, in specific cases also local currencies. Term usually between four and ten years. Interest rate fixed or variable, market oriented according to project and country risks. Collateral security as fixed assets in the country of investment. Volume usually between 3 and 25 million EUR.


Guarantees

Mobilization of long-term loans or bonds in local currency. Reduced exchange-rate risk via loan repayment in local currency. Partial guarantee preferred (risk sharing with local bank or bond creditor).