KfW IPEX-Bank: Financing for the expansion of the district heating network in Hamburg

• Conversion of local heat supply in Hamburg
• Tunnel construction and district heating pipeline under the River Elbe
• Goal: climate-neutral district heating supply

KfW IPEX-Bank is providing financing of around EUR 134 million to Hamburger Energiewerke for the expansion of the Hamburg heating network. The funds come from KfW's promotional programme "IKU - Energetische Stadtsanierung - Quartiersversorgung", which supports investments in sustainable municipal heating systems, among other things.

For the Hamburg heat transition, Hamburger Energiewerke is planning to replace the current district heating supply from the Wedel coal-fired power plant with various generation plants by 2025, including at a new location in the Port of Hamburg ("Energiepark Hafen"). To connect the Energiepark Hafen to the existing district heating network in the west of Hamburg, a new district heating pipeline will have to be built. This will have a length of almost 8 km and run partly under the Elbe.

KfW IPEX-Bank is providing financing for the construction phases comprising the tunnel construction and the district heating pipeline under the Elbe; further construction phases are being financed in parallel by NORD/LB.

Once the new district heating pipeline has been commissioned, the Wedel coal-fired power plant is to be replaced in 2025 by predominantly climate-neutral heat from the future Energiepark Hafen. To this end, waste heat potential from energy-intensive industrial operations, a waste recycling plant and sewage treatment plant processes will be used and transported to consumers in the north of the Hanseatic city via the new district heating pipeline and the associated tunnel under the Elbe. In addition, a highly efficient combined-cycle power plant is being built that is designed to utilise synthetic gas, such as hydrogen. In a second step, by 2030 at the latest, the Tiefstack CHP plant will be replaced and heat generation from hard coal in Hamburg will be completely discontinued. By 2045, the city's heat generation and distribution should be climate-neutral.

Dr Velibor Marjanovic, Member of the Management Board of KfW IPEX-Bank: "As a transformation bank, KfW IPEX-Bank has been financing future technologies for many years. We are very pleased to be able to support this flagship project of Hamburger Energiewerke with the help of KfW's promotional programme " IKU - Energetische Stadtsanierung - Quartiersversorgung". With this financing, KfW IPEX-Bank is once again underlining its commitment to advancing global energy transition projects.

Christian Heine, Spokesman of the Board of Management of Hamburger Energiewerke: "As a municipal energy supplier, we set out with the goal of implementing the transformation of the heat supply in Hamburg in an ecological, reliable and affordable way for everyone. The necessary investments in sustainable technologies and the expansion of the infrastructure amount to around 1.9 billion euros by 2027 alone. In order to be able to deploy sums of this magnitude, we rely on strong partners such as KfW IPEX-Bank. We are therefore all the more pleased that we were able to convince the bank of our future supply concept. The loan is also tantamount to an award for us, as KfW IPEX-Bank applies the strictest sustainability criteria in its financing. Our investments in a climate-friendly and affordable heat supply demonstrably pay towards the sustainability goals of the United Nations and the taxonomy goals of the European Union."

About Hamburger Energiewerke
Hamburger Energiewerke GmbH is a merger of the municipal companies Hamburg Energie and Wärme Hamburg as of 1.1.2022. The company supplies more than 160,000 customers in the Hanseatic city with electricity and gas and provides around 25 per cent of Hamburg's useful heat. Around 850 employees at Hamburger Energiewerke are committed to the success of the energy and heat transition. The company makes the largest single contribution to achieving Hamburg's climate targets.