Municipalities in Germany can now access renewed funding for energy-efficient urban rehabilitation, following the relaunch of a KfW programme under improved terms. The initiative, supported by the German Federal Ministry for Housing, Urban Development and Building and KfW, will provide EUR 75 million in grants for 2025.
Since its inception, more than 1,800 neighbourhoods have benefited from this funding. The support has facilitated investments aimed at reducing carbon emissions from buildings, modernizing local energy supply systems, and increasing the use of renewable energy sources. With the restart of funding, municipalities are expected to implement their heating plans more effectively.
Melanie Kehr, Executive Board Member of KfW, stated: “With the funding, we are assisting municipalities in two ways. On the one hand, the grant supports the planning of energy-efficient neighbourhoods. At the same time, we are making it possible to employ qualified personnel to implement the solutions quickly. In doing so, we are contributing to the acceleration of the municipal heating transition while simultaneously stimulating growth for the local economy. This is a first but important step towards creating future-proof urban districts that work well on an environmental, social and economic level."
The updated programme increases subsidies for financially weak municipalities to cover up to 90% of eligible costs. Additionally, renovation management funding can now be extended up to five years with a maximum amount raised to EUR 400,000.
Applications for this grant programme will be accepted by KfW starting November 26, 2025.
Further information about this programme is available (in German).