EIB Commits €500 Million to Expand Affordable, Energy-Efficient Housing in Berlin

At least 50% of the new homes will be subsidised, reinforcing Berlin’s commitment to ensuring housing affordability amid rising rents and limited supply.

The European Investment Bank (EIB) has signed a landmark €500 million credit facility with Berlin's municipal housing company HOWOGE Wohnungsbaugesellschaft mbH, in a major push to expand affordable housing and accelerate sustainable urban development in the German capital.

The financing will support the construction of approximately 3,200 new residential units by 2029, addressing mounting housing pressures in one of Europe's fastest-growing cities while advancing climate goals through high-efficiency building standards.

Boost for Affordable Housing in a Tight Market

At least 50% of the new homes will be subsidised, reinforcing Berlin's commitment to ensuring housing affordability amid rising rents and limited supply.

The developments will be spread across multiple districts, helping to ease pressure in high-demand areas and improve access to quality housing for low- and middle-income residents.

"With the European Investment Bank, we are gaining a strong European financing partner at our side," said Jörg Kotzenbauer, Managing Director of HOWOGE. "Especially in times of tight housing markets, this sends a clear signal of social responsibility and long-term stability."

Housing experts note that Berlin has faced persistent shortages in recent years, with demand significantly outpacing supply—making large-scale, publicly backed developments increasingly critical.

Climate-Friendly Construction at the Core

Beyond affordability, the project places a strong emphasis on energy efficiency and sustainability, aligning with Berlin's climate targets.

The new housing stock will be built to ambitious energy performance standards, designed to:

• Reduce carbon emissions from residential buildings

• Lower energy costs for tenants

• Improve long-term environmental sustainability

"This project will help reduce energy bills for residents while contributing to climate goals," said Nicola Beer, Vice-President of the EIB.

Buildings account for a significant share of urban emissions in Europe, making energy-efficient housing a key lever in achieving climate neutrality targets.

Strategic Partnership and Record Financing

This marks the first collaboration between HOWOGE and the EIB, and represents a major milestone for the municipal housing provider.

The €500 million facility is:

• HOWOGE's largest single loan transaction to date

• Its second framework agreement with a multilateral development bank

• A significant addition to its diversified financing strategy

The agreement also signals strong institutional confidence in HOWOGE's long-term growth model and financial stability.

"The involvement of a multilateral partner underscores confidence in our business model and growth trajectory," Kotzenbauer added.

EIB's Largest Housing Investment in Germany in a Decade

For the European Investment Bank, the deal represents its largest housing investment in Germany in the past ten years, highlighting a renewed focus on tackling housing shortages across Europe.

"With this partnership, we are supporting the construction of thousands of homes that are affordable, energy-efficient, and future-ready," Nicola Beer said. "It's a clear demonstration of our commitment to addressing Europe's housing challenges."

Backed by EU's InvestEU Programme

The financing is supported under the European Union's InvestEU programme, which aims to mobilise public and private investment in strategic sectors such as infrastructure, sustainability, and social development.

By leveraging EU backing, the programme enables favourable financing conditions—even in a challenging economic environment marked by rising interest rates and construction costs.

Driving Jobs, Growth, and Urban Stability

In addition to expanding housing supply, the project is expected to generate economic activity and employment across construction and related sectors, contributing to Berlin's broader economic momentum.

As cities across Europe grapple with housing shortages and climate commitments, the EIB-HOWOGE partnership is being positioned as a model for integrated, sustainable urban development—combining affordability, environmental performance, and financial innovation.