Government funds

Government funds

In addition to our own capital, we also make investments on behalf of the Dutch government. At present, 86% of our committed portfolio comprises FMO's own account and risk, and 14% is funded by the government.

 

The government funds we make investments for include:

Access to Energy Fund (AEF):

Finances energy projects. In 2010, FMO invested €9 million via this fund. One example is a wind project in Nicaragua, for which FMO provided a US $39.5 million senior loan and a US $3 million mezzanine loan - the latter financed through the AEF. The Amayo II wind project comprises 11 wind turbines capable of producing 23.1 MW of electricity. Together with the 19 turbines from the first phase of the project, it will generate total output of 63 MW, representing almost 10% of available installed capacity and adding much-needed and competitively-priced sustainable energy for Nicaragua.

MASSIF:

A local currency fund that provides financial institutions with resources to aid the development of Micro, Small and Medium-sized Enterprises (MSMEs) in developing countries. In 2010, we invested €45 million via MASSIF. For example, Canada's Développement International Desjardins (DID), with financial support from FMO, helped turn Pulse Finance Services Ltd (PFSL), a small, troubled consumer lender in Zambia, into a fast-growing professional microfinance institution. PFSL is now one of the first commercial microfinance institutions in Zambia and is expected to break even in 2011. FMO granted PFSL a US $3 million-equivalent senior loan in local currency with a five-year tenor to grow its SME and Home Improvement portfolio.

Capacity Development program (CD):

Supports the transfer of knowledge to clients or clients of our main partners by creating access to management and technical know-how. Through this fund, FMO contracted €6 million in CD grants in 2010. For example, the successful turnaround of Zambia's Pulse Finance Services Ltd (PFSL) can be attributed to the expert technical support services of Canada's Développement International Desjardins (DID), which was partially funded by a grant from FMO's CD program.

Infrastructure Development Fund (IDF):

Provides long-term financing for infrastructure projects in low-income countries. The Dutch government last year increased its commitment by €70 million, enlarging the fund. FMO invested €27 million via this fund in 2010. In Asia, for example, FMO helped set up the Mekong Brahmaputra Clean Development Fund, which will provide scarce long-term capital for clean energy projects in countries such as Vietnam, Nepal, Thailand, Cambodia, Laos, Bangladesh, Bhutan and Sri Lanka. These projects will encompass renewable energy, energy efficiency, water conservation and waste recycling. With a target size of US $100 million, the fund will catalyze further private sector investments in clean technology in the region, and is expected to lead to the creation of at least 900 permanent jobs and 7,000 temporary jobs. Through the IDF, we invested US $12.5 million in the Mekong Brahmaputra Clean Development Fund, which will play a significant role in the region's economic development.

Fund Emerging Markets (FOM):

Provides finance to stimulate Dutch SMEs to invest in developing countries with a committed portfolio of €90.5 million. In 2010, we invested € 28 million through this government-guaranteed facility. One example is a €2.4 million unsecured facility for the Russian subsidiary of Dutch Hencon Group, which provides specialized transport equipment primarily for the aluminum industry. The facility will be used to finance a new factory for Hencon in Siberia, the centre of Russia's aluminum production, and will create 25 relatively well-paid and skilled new jobs.