Germany’s largest real estate firm gets EIB funds for energy efficiency renovations

Germany’s largest real estate company, Vonovia, has secured a loan worth 600 million euros for investments in energy efficiency renovations for its housing stock from the European investment bank (EIB). “Rising construction costs and interest rates have significantly changed the framework conditions for investments,” Vonovia CFO Philip Grosse said. According to the Institute for Economic Research (ifo), more than ten percent of building construction projects have been cancelled over the past two months. With the funding, Vonovia aims to make rental flats more energy efficient by insulating facades and roofs, and switching to hybrid heating systems that use renewable energy, such as heat pumps alongside photovoltaics (PV). “We are committed to refurbishing residential buildings in an energy-efficient manner, thus contributing to the achievement of the EU climate targets,” said EIB Vice-President Ambroise Fayolle, who overseas lending in Germany.

Housing stock renovations decrease energy consumption significantly, but can also increase rent prices. According to a recent government agreement, tenants will be able to split carbon dioxide (CO2) costs on building emissions with landlords from 2023. According to a new tiered CO2 levy system, the less energy-efficient a building is, the more a landlord would have to pay. Vonovia aims to make its housing stock “nearly climate neutral” by 2045. The building sector was responsible for just over 15 percent of CO2 emissions in Germany in 2021.