Our year
FMO made substantial progress in 2010, with both financial
performance and development impact improving compared to 2009. The
second half of the year was particularly strong as activity clearly
picked up, enabling us to do a series of good transactions and
build a stronger and deeper deal pipeline - laying a robust
foundation for 2011.
Economic growth developed positively overall in major parts of
Africa, Asia and Latin America. With mineral prices high, exports
performing well and governments avoiding the budget deficit
problems seen in Europe and the US, all these regions had a good
year and this was reflected in the quality of FMO's portfolio. The
entrance of China and India as major international investors in
developing markets is good news: they are important drivers of
economic growth in developing countries.
We look back on a successful financial year in which we
increased our development impact by focusing even more strongly on
sustainability by actively working with our clients to implement
[ESG] action plans. Our target to implement 80% of ESG action plans
this year was outperformed by 11% to 91%. We began systematically
using [quantitative indicators] to track the development results a
client produces, including macroeconomic indicators such as
employment or tax generated.
The outcomes of our 2010 client satisfaction survey were
gratifying, showing that the overall satisfaction score for FMO
rose to 8.3. This is above the benchmark of 7.3 in the
business-to-business market. Under the strategy introduced in 2009,
we continue to focus on low-income countries, as these offer the
highest development impact potential. The share of low-income
countries in FMO's total portfolio (excluding government funds)
rose to 37%, well above our long-term target of 35%, from 31% at
the creation of the strategy in 2008.
Our committed portfolio continued to grow at a time of global
financial deleveraging, increasing by approximately €0.7 billion.
Average deal size declined and transactions became harder to close
due to a generally lower level of professional experience and
greater uncertainties in low-income countries. Many energy projects
were delayed by regulatory issues, private equity market volumes
remained low in the first half of the year, and demand for our
products in much of Africa was reduced by the high short-term
liquidity of financial institutions there.
The year 2010 was a very special one for us because it marked
FMO's 40th anniversary. We organized two major
conferences in honor of the occasion. The first - entitled ['Be
social, make profit: Financing the Future of Developing Economies']
− was held in the Peace Palace, seat of the World Court in The
Hague in April. It brought together some 300 leaders from the
business world, the financial and development sectors, academia and
government to discuss a theme that is the very core of our
philosophy.
The second conference, held in November, was an event for
financial institutions in developing countries on the future of
banking. More than 200 bankers from developing countries and
emerging markets attended the conference. Keynote speaker was
Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria, who
discussed the role of banks and regulators after the global
financial crisis.
The [WRR] (Scientific Council for Government Policy) report on
development aid, which was published in early 2010, led to the new
Dutch government's desire to focus on private sector development in
its aid policy. We welcome the report's recommendations, which
included putting more focus on economic development and stimulating
the creation of middle income groups.
Throughout this report, you can find case studies that clarify
our activities in 2010 and provide context. All the selected cases
were contracted, paid out or exited last year.