Social impacts of our funding

New social housing construction is a critical focus for the IBB and essential for Berlin. This initiative combines ecological sustainability with social justice by creating affordable housing for households with low to moderate incomes.

To address the ongoing reduction of rent-controlled housing, we reintroduced the IBB Housing Development Fund (IBB Wohnungsneubaufonds) in 2014. This programme provides socially responsible housing by offering low-interest loans and grants to support both public housing associations and private investors. The resulting rent-controlled apartments start at just EUR 7 per square metre. The programme ensures project viability by mixing subsidised and market-rate housing, fostering social diversity within neighbourhoods.

The new, improved housing subsidy regulations (WFB) came into force on 30 June 2023. For the first time, the new provisions subsidise apartments in the 3rd subsidy model (Public construction loan for new buildings to accommodate households with difficulties in housing provision) that can be occupied by middle-income households (income limit up to 220 % according to § 9 WoFG). In addition, the maximum funding volume has been increased to EUR 5,300 per square metre compared to the WFB 2022. Further changes include the elimination of partial waivers in all funding models with the addition of a construction cost subsidy of up to EUR 1,800 per square metre in funding model 1. The maximum initial rent in the 3rd funding model is EUR 11.5 per square metre, and in funding models 1 and 2, it's initially EUR 7 per square metre and EUR 9.5 per square metre, respectively. By the end of 2023, we had approved a total of 3,492 subsidised and 920 market-rate apartments.

Since 2014, 26,107 subsidised apartments have been approved, with 13,998 completed by the end of 2024. For 2025, an annual budget of EUR 1.5 billion is available, aimed at approving 5,000 new apartments. A total of 5,188 subsidised apartments were approved in 2024.

School construction

Since 2021, IBB has been financing the Berlin School Building Initiative in partnership with HOWOGE. This initiative addresses the city's growing need for new schools, with seven schools already funded since the program's inception.

Small and medium-sized enterprises (SMEs) are a cornerstone of Berlin's economy. In light of recent economic challenges, supporting SMEs' access to financing is critical to driving growth. SMEs contribute significantly to digitalisation and sustainability through their innovative projects.

The IBB offers a wide range of funding and financing options for SMEs and larger businesses. This includes microloans of up to EUR 50,000 addressing a need overlooked by commercial banks. Microloans play a vital role in combating poverty and fostering economic independence, contributing to sustainable business development.

Many disadvantaged young people lack adequate support during the transition from school to training or employment. This results in higher-than-average NEET (Not in Education, Employment or Training) rates and dropout rates in Berlin compared to other German states.

Around 10 % of Berlin students leave school without a diploma—higher than the national average. In Germany, educational outcomes are still strongly influenced by social background, especially for those with migration histories.

Despite significantly positive economic development until March 2020, structural economic challenges persist, with lower economic productivity, a smaller role for industrial and high-value services, and limited R&D activity compared to the national average. This translates to fewer future-oriented and well-paying jobs. Increasing economic adaptability to digital, technological and ecological changes remains essential, alongside fostering Berlin’s dynamic start-up scene.

Gender inequalities persist in the labour market, with women disproportionately in part-time or marginal employment.

Compared to the national average, proportionally more people are affected by poverty and social exclusion. Children and young people, the long-term unemployed, people with low levels of education, early school leavers, single parents and people with a history of migration are particularly at risk of poverty.

It is true that the long-term unemployed have also benefited from the favorable development of the labour market. However, there are still major difficulties in bringing into the labour market people without educational qualifications, people who do not speak German fluently (especially women), older people and people with health problems.

For this reason, the EU and the state of Berlin have launched an ESF+ operational programme that addresses precisely these weaknesses in the labour market. The IBB's Labour Market Promotion division is therefore awarding grants to project sponsors within the framework of the European Social Fund Plus (ESF+) and is thus actively working on sustainability issues:

• Increasing the number of people in decent jobs
• Enhancing quality education through training opportunities
• Strengthening scientific research and technological capacity
• Reducing inequality via equitable access to education and training
• Promoting gender equality
• Fostering self-determination and inclusion
• Combating substance abuse
• Driving economic growth through start-ups and entrepreneurs
• Raising awareness among youth about social, cultural and environmental issues for sustainable urban development

As a regional development bank, IBB's sphere of activity is limited to the federal state of Berlin. Financing is exclusively granted for projects within Berlin. We adhere to the recommendations of the Platform on Sustainable Finance (PSF) and evaluate our options to ensure the Minimum Safeguards outlined in Article 18 of the Taxonomy Regulation. These include:

• UN Guiding Principles on Business and Human Rights
• Declaration of the International Labour Organization (ILO)
• Eight Core Conventions of the International Labour Organization (ILO)
• Recognition of the International Bill of Human Rights
• OECD Guidelines for Multinational Enterprises

The IBB identifies potential risks to workers' rights, including in international contexts, in its role as a procurer of goods and services or as an employer.

To underline our commitment to human rights, we will issue a Group-wide policy statement at the Board level, and establish a continuous review and improvement cycle to derive necessary actions.