KfW 295 — Federal Funding for Energy and Resource Efficiency in Industry (Bundesförderung Energie- und Ressourceneffizienz in der Wirtschaft)

KfW 295 — Federal Funding for Energy and Resource Efficiency in Industry (Bundesförderung Energie- und Ressourceneffizienz in der Wirtschaft)

Funds German enterprises pursuing energy and resource efficiency through process improvements and renewable heat innovations.

KfW Program 295 (Bundesförderung für Energie- und Ressourceneffizienz in der Wirtschaft) is a rolling hybrid instrument from KfW Bankengruppe that finances business investment in energy efficiency and renewable process heat across Germany. It combines a subsidized low-interest loan — up to €100 million per project covering 100% of eligible investment costs — with a Tilgungszuschuss (partial principal forgiveness) whose rate varies by the specific funding module and company size. Eligible applicants include commercial enterprises of any size, contractors, municipal and state-owned companies, freelancers, and non-profit organizations engaged in economic activity, provided they have operations in Germany. There is no fixed application deadline.

The program is structured around six modules covering distinct investment types. Module 1 (cross-cutting technologies such as motor and drive system upgrades) offers a Tilgungszuschuss of up to 25% for small enterprises. Module 2 (renewable process heat including solar thermal, heat pumps, and geothermal systems) offers up to 60% for small companies — the highest subsidy rate in the program. Module 3 covers energy management monitoring and control systems. Module 4 addresses process optimization with base and premium tiers including decarbonization bonuses. Module 5 funds corporate climate transition planning and decarbonization strategy development. Module 6 supports small business equipment replacement with electric alternatives at a Tilgungszuschuss rate of up to 33%. Loan terms run 2–20 years with up to a 3-year interest-only grace period.

Applications must be submitted through a financing partner bank (Hausbank) before work begins, though early-start provisions allow commencement at the applicant's own financial risk pending final approval. The Tilgungszuschuss is credited to the loan balance after the project is completed and verified. Companies targeting industrial-scale energy efficiency or renewable heat transitions — particularly mid-sized manufacturers and municipal utilities — are the primary beneficiaries, with small enterprise size classifications unlocking the highest subsidy rates.