Covenant - The funding pot for climate-friendly new builds is empty
The funding pot for the program for climate-friendly new builds is empty. As announced by the Federal Building Ministry in Berlin, no new applications for the program can be submitted to the state development bank KfW due to exhausted funds. So far, more than 18,000 funding approvals have been granted and around 46,000 climate-friendly housing units have been funded.
Building Minister Klara Geywitz (SPD) said: "The demand for our new-build funding has exceeded our expectations. After just three months, the funding pot for climate-friendly new builds was almost empty, so we had to increase it to almost two billion euros." New applications could be submitted as soon as the 2024 federal budget comes into force.
The coalition leaders had reached an agreement in principle on how to plug the billions of euros in the 2024 budget. The budget is expected to be passed by the Bundestag in January.
Harsh criticism from the construction industry and opposition
The construction industry criticized that the "funding disaster" was continuing. Peter Hübner, President of the Federation of the German Construction Industry, said that by suspending funding for new construction, the federal government was proving that it had learned nothing from the mistakes of last year's funding freeze. "A run on subsidies at the end of the year is not a success. It shows the great uncertainty on the market. Nobody knows what will happen next and everyone is trying to secure the last scraps." According to Hübner, it is already a reality that every second company in the housing construction sector is suffering from a lack of orders and the housing shortage in Germany is growing from week to week.
Jan-Marco Luczak, construction policy spokesperson for the CDU/CSU parliamentary group in the Bundestag, spoke of the biggest housing crisis in Germany for decades. "But instead of taking decisive countermeasures and breaking the downward spiral, the traffic lights are arguing and delaying important decisions to make building faster and cheaper. Now the funding for climate-friendly new builds is also being scrapped." This is a slap in the face for companies and private builders.
Read also:
- Why there is still no EU funding for green Saar steel
- 3 billion Saar Fund is unconstitutional
- Politicians at a loss after shock news
- Court of Auditors criticizes the state government's debt plan
The empty funding pot is a concern for the Federal Building Ministry in Germany, particularly for the program of climate-friendly new builds. The ministry, headed by Building Minister Klara Geywitz from the SPD, had to increase the funding pot to nearly two billion euros due to high demand. The KfW Banking Group, responsible for the distribution of funds, has ceased accepting new applications due to exhaustion of funds. So far, over 18,000 funding approvals have been granted, leading to around 46,000 climate-friendly housing units.
Peter Hübner, the President of the Federation of the German Construction Industry, criticized the situation as a "funding disaster." He translated the suspension of funding for new construction as the Federal Government's failure to learn from past mistakes. Hübner highlighted the challenges facing the construction industry, including a growing housing shortage in Germany and a lack of orders for over half of the companies in the housing sector.
Jan-Marco Luczak, the construction policy spokesperson for the CDU/CSU parliamentary group in the Bundestag, condemned what he saw as the coalition's failure to address the housing crisis. He criticized the delay in making decisions for faster and cheaper building, adding that the suspension of funding for climate-friendly new builds added to the difficulties faced by companies and private builders.
The SPD, the Federal Ministry of Construction, and the Federal Government are not the only entities involved in addressing climate and construction issues. The KfW Banking Group is a significant player, providing finance for sustainable projects, such as energy-efficient buildings and renewable energy sources. The SPD is committed to achieving net-zero greenhouse gas emissions by 2045, and the KfW Banking Group plays a crucial role in reaching this goal.
Source: www.stern.de
