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History of KfW IPEX-Bank

Since 1 January 2008 KfW IPEX-Bank has been operating as a legally independent limited company in charge of export and project finance within KfW Group. The business area, however, had already existed for 60 years and is closely associated with the foundation of KfW. This is why our look into the past begins in 1948, when Kreditanstalt für Wiederaufbau took up operations.

Milestones in the history of KfW IPEX-Bank

großes Bürogebäuse mit Glasfassade

2008: Spin-off and legal independence

At the start of 2002, the Federal Government and the European Commission reach an agreement on restructuring Germany’s promotional banks. For KfW this means the separation of promotional activities and commercial business. Its export and project finance activities are spun off as of 1 January 2008 into an independent, wholly-owned subsidiary: KfW IPEX-Bank.

Landkarte mit den weltweiten Standorten der KfW IPEX-Bank

2008: Expansion of foreign locations

The six representative offices (Bangkok, Istanbul, Moscow, Mumbai, New York, São Paulo) were complemented by an office in Johannesburg. The first and so far only branch of KfW IPEX-Bank was established in the financial centre London. Later representative offices were opened in Abu Dhabi (2009), Singapore (2011) and Mexico City (2014).

Equator Principles logo

Since the 1980s: environmental and social standards

In 1984 KfW sets up the first programme of its own aimed at supporting environmental and climate protection in Germany. In 2000 it establishes its own strict guidelines for assessing the environmental and social sustainability of all projects it finances. In 2008, the year of its spin-off, KfW IPEX-Bank joins the Equator banks, which follow internationally recognised principles.

1980: Prospects for small export transactions

KfW began to draw up framework agreements for export finance to facilitate buyer loans even for smaller export contracts. Framework agreements were concluded both with credit institutions in developing countries and emerging economies, such as the Bank of China, and with important regular customers. Although large enterprises also used this instrument for smaller export transactions, KfW was able to attract and support new customers mainly among medium-sized plant engineering firms in Germany.

1976: Support for German and European high-tech industry

As part of sales financing for the Franco-German Airbus, KfW grants the first loans to airlines in Korea, India and South Africa in 1976. The first Airbus financing in the USA takes place in 1978, for Eastern Airlines. In 1989, new commitments for aircraft financing exceed DM 1 billion for the first time.

1961: Landmark year

Start of shipbuilding assistance programmes and ship financing
KfW’s activities are not limited to granting federal funds. The bank considers that its primary function is to support German shipyards in their export activities by extending loans based on market funds on the most favourable terms possible, in this way conserving government subsidies.

Securing raw material supplies for the German steel industry
In 1961 KfW provides the first untied loan (ungebundener Finanzkredit – UFK) to secure raw material supplies for German industry. The funds support iron ore projects in Liberia that supply Germany’s Ruhr region with raw materials.

1960: From supplier credit to buyer credit

In the early 1960s the supplier credit was still the norm. It was granted to German exporters until they had received the full purchase price from their foreign buyer. However, together with the federal ministries KfW soon designed a new financing instrument through which loans were extended directly to the foreign importer. The so-called buyer credit for foreign importers almost fully replaced the conventional supplier credit in the 1960s.

1958: Start of commercial project finance

In addition to politically motivated foreign loans, the instruments introduced in 1958 also included commercial project finance. In the 1950s Germany’s balance of payments improved to such an extent that from 1958 onwards, the Deutsche Bundesbank and the German Federal Government considered a targeted level of German capital exports to be desirable. In the case of project finance, this satisfied a number of goals: the construction of the Indian steel plant Rourkela helped German exporters of plant components, power plants in Luxembourg and Tirol benefited from the energy supply and a Finnish copper mine helped ensure supplies of raw materials for German industry. This laid the groundwork for KfW's business area of E&P (export & project finance) and thus later also for the bank's spun-off subsidiary, KfW IPEX-Bank.

1950: Birth of export finance

Long-term export finance is not only one of KfW's most important and most successful activities, it is also one of its oldest business areas. It traces its beginnings to a meeting of KfW's Board of Supervisory Directors on 13 March 1950. One year later the 2nd amendment to the KfW Law officially included export finance in the bank's statutory mandate. The year 1951 ended with Germany's first positive balance of payments. Its rise to become an export nation began. It was also at this time that the close cooperation with customers such as M.A.N., Siemens and Krupp started and remains strong through today.

1948: Foundation of KfW – with export finance a key pillar from the start

On 18 November 1948 the German Law Concerning KfW comes into force – providing the basis for the activities of Kreditanstalt für Wiederaufbau (known as ‘reconstruction loan corporation’ at the time) in post-war Germany. Long-term export finance has been part of KfW’s statutory mandate since 1951.

In 2018 KfW IPEX-Bank celebrated its 10-year anniversary. Watch the anniversary trailer here:

Independent in the market for 10 years - with 60 years of experience

Picture show with many example projects on the four focus topics: Exports, environmental and climate protection, securing raw materials and infrastructure

Watch the video (without sound, 3:59 min.)