The Government Funds play a pivotal role in FMO’s strategy to support job growth, reduce inequality and combat climate change. The funds allow us to realize projects that would not have been bankable, in other words that would not have been eligible for financing. The funds help to bridge the financing gap that hampers private sector growth as it supports innovative business models in often pioneering sectors, new technologies and projects in more fragile countries with substantial development impact on local communities.
Linda Broekhuizen, Chief Investment Officer at FMO: “In the current economic uncertainty due to the COVID-19 pandemic, supporting the private sector in developing countries is of vital importance. Our prime focus is to help our clients to mitigate the impact to their businesses and save jobs.” Broekhuizen adds: “At the same time we continue to invest to build economic resilience for the long(er) term and address global challenges like inequality and climate change. Therefore, we are proud to be entrusted in 2019 by the Dutch government to manage, as part of a consortium of NGOs and financiers, the Dutch Fund for Climate and Development. The fund deploys public and private capital for private sector solutions that enhance resilience to the effects of climate change.”
MASSIF is the Dutch government’s fund for financial inclusion. Its strategy steers financial inclusion towards the unbanked population, focusing on women-, youth- and refugee- entrepreneurs, rural areas and inclusive business. The fund invested in 23 new transactions in 2019; a record number for MASSIF.
Through our EUR 545 million portfolio, we support the provision of nearly 8 million microloans and more than 112,000 loans to small and medium-sized businesses by financial intermediaries. Our involvement in unbanked and fragile states grew in 2019, with new clients in Sierra Leone, Myanmar, and Palestine.
At a time of political and economic unrest, MASSIF continued supporting clients by providing stable and longer-term funding in Nicaragua. Finally, MASSIF provided a risk sharing facility with capacity development to finance Syrian refugee entrepreneurs in Jordan as part of the NASIRA program.
For more information, visit: https://massif.fmo.nl/2019/
The number of people without access to electricity has fallen below one billion. However, even with the current pace of progress, 650 million people are expected to remain without access in 2030. 9 out of 10 of these people will live in Sub-Saharan Africa. The Dutch government’s Access to Energy Fund (AEF) aims to help accelerate these connections to on- and off-grid renewable energy as well as to clean-cooking facilities.
As the fund manager, FMO looks back at a successful year for the AEF: the fund provided EUR 48 million of new financing to 10 companies in developing countries, while providing energy access to nearly 4 million people through its contribution to the companies in its existing portfolio.
In 2019, under the new enlarged geographic mandate, the AEF was able to finance projects in all OECD-DAC countries. This led to first time investments in the renewable energy sector in Bangladesh and Ukraine.
For more information, visit: https://aef.fmo.nl/2019/
With a growing world population and increasing disruption from extreme weather events, it is critical to increase agricultural capacity without exacerbating the effects on climate. This is the challenge that the Dutch government’s Building Prospects Fund embraces.
Building Prospects supports the acceleration of private sector development by investing in sustainable agriculture value chains, infrastructure, and forestry projects. The total portfolio currently reaches over 3 million people and supports over 800,000 jobs. In 2019, Building Prospects successfully reached and exceeded its EUR 60 million target, investing in 15 clients for a total amount of almost EUR 104 million.
This year, Building Prospects has ventured into pioneering sectors, such as aquaculture and the first renewable power plant in Djibouti.
For more information, visit: https://buildingprospects.fmo.nl/2019/
The Dutch Fund for Climate and Development (DFCD) was launched at the UN climate change conference (COP25) in Madrid in December last year. As a consortium led by FMO with partners SNV, WWF and Climate Fund Managers, the DFCD aims to help local communities seize opportunities, by financing meaningful climate action that increases the resilience of households and businesses.
The DFCD opened for business in a year in which the strain on global multilateral climate action increased. The fund responds to the urgent need to increase investment in climate adaptation. Between now and 2030, a massive USD 140 to USD 300 billion per annum is needed in developing countries to address the costs of adaptation. This figure will increase if coordinated global climate action falls short of the international commitment to keep global warming well below 2 degrees.
With a pipeline of projects aligned with the ambitions of the fund, business activities started in the second half of 2019. The intensity of contacts with prospective clients in these first six months of the fund’s existence reaffirms the attractiveness of the DFCD’s unique combination of bankable project development along with the catalyzation of private finance for climate adaptation.
For more information, visit: https://dfcd.fmo.nl/2019/
The core activity of the Partnership Development Facility (PDF) is to build partnerships with Dutch companies to develop high-impact projects in the agri-food, water and climate sectors in emerging markets. The fund provides much-needed financing for early-stage projects that contribute to the Sustainable Development Goals.
In 2019, we signed contracts for five new projects in renewable energy, wastewater treatment, and food security. A major milestone was the successful finalization of the feasibility phase for a water supply project in Myanmar. The project will now move to the financing phase where a consortium of Dutch companies is expected to both construct and finance the project.
The Flying Swans Consortium, financed by the PDF and consisting of Port of Rotterdam, Boskalis and Mercator Novus, made good progress in 2019 by formalizing the partnership for the development of a national ‘cool logistics network’ in Ethiopia and South Africa. This will improve logistical links for export, benefitting both commercial farms and smallholder farmers. FMO acts as the fund manager of the Flying Swans program.
For more information, visit: https://pdf.fmo.nl/2019/
The Development Accelerator (DA) actively supports Dutch businesses or project sponsors (public or private) to develop high-impact projects with a Dutch interest in the health, agri-food, water, renewable energy and climate sectors in emerging markets.
In 2019, the DA signed contracts for eight new projects ranging from hospital renovation, to a wastewater treatment facility for a heavily polluted river, to renewable energy projects. The year 2019 also saw the first edition of Finture Solutions, a new initiative by FMO to support bold Dutch start-ups in scaling up their business across emerging markets and creating impact in the agri-food, renewable energy, and water sectors. Five start-ups with innovative solutions were awarded development capital to scale their solutions in the markets in which they operate. Based on the success of this event, FMO will organize the second edition of Finture Solutions in June 2020.
For more information, visit: https://da.fmo.nl/2019/