DEG further increased new business and development impact in 2022
• EUR 1.6 billion for investments in developing and emerging countries, plus mobilised funds of around EUR 490 million
• The development impact of DEG's portfolio is increasing in 5 the face of challenging global framework conditions
• More new commitments for climate and environmental protection investments by private companies
• Contribution to sustainable transformation in partner countries 10
In the face of challenging global framework conditions, DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, saw a further increase in new business in the 2022 financial year: at around EUR 1.6 billion, it again committed more funds to finance private enterprises in developing and emerging countries than in the previous year (2021: 15 EUR 1.5 billion). It also mobilised EUR 487 million from other investors. The DEG portfolio grew to EUR 9.9 billion.
"The increase in new business and our portfolio is encouraging given the very challenging market environment. The same can be said of the development impact of the investments financed by DEG. Our 20 customers showed remarkable resilience despite many challenges, such as the ongoing war against Ukraine and its repercussions, such as threats to food and energy security. In 2022, for example, the companies we co-financed employed around 3 million people and generated EUR 209 billion in local income in developing countries,” explained DEG CEO 25 Roland Siller.
For investments that promote climate and environmental protection, DEG provided a total of EUR 609 million in 2022, nearly 50% more than in the previous year (2021: EUR 409 million). This included, for example, a USD 29.5 million investment in the Alcazar Energy Partners II Fund, 30 which aims to realise green energy projects in countries such as Georgia, Uzbekistan or Egypt. In German business, DEG committed EUR 392 million from its own funds, which also represents an increase over the previous year (2021: EUR 263 million). These funds are used to finance direct investments by German companies as well as local 35 companies that purchase German equipment, for example. Through the AfricaConnect programme, DEG committed a further EUR 41 million in 2022 for investment projects by European companies in Africa – sustainable macadamia nut production in Kenya, for example.
On a regional breakdown, Asia saw a particularly sharp increase in 40 financing commitments, which grew by around 15% year on year to EUR 575 million (2021: EUR 499 million). Companies in Africa and Latin America each received around a quarter of the newly committed financing, followed by Europe and cross-regional investments. Broken down by sector, the main focus in 2022 was once again on the financial 45 sector, followed by manufacturing.
In addition to financing from its own funds, last year DEG provided EUR 33 million under its advisory and promotional programmes. Through its Business Support Services (BSS), it facilitated transformative measures that further enhance the development impact of co-financed 50 investments, as well as pilot projects, innovative business models and feasibility studies. In 2022, through BSS, DEG also supported humanitarian aid programmes implemented locally by its Ukrainian customers.
DEG expects the market environment to remain difficult in 2023. "The 55 many challenges faced in 2022 will also persist in 2023. As a development finance institution, we deliberately continue to focus our efforts on global sustainability goals, while concentrating even more strongly on further increasing the development and climate impacts of the investments we co-finance. We are working hard to support the 60 necessary transformation of our customers with suitable instruments and thus further strengthen their resilience," emphasised DEG CEO Roland Siller. "This includes that we have embarked on a CO2 reduction path to achieve the 1.5 degree target of the Paris Agreement. The goal is for DEG's portfolio to be climate neutral by 2040."