Home Annual Report 2018 How we report

Other reporting definitions

We have aligned our indicator definitions with internationally harmonized definitions if these are available. Below we have included the definitions of the reported indicators.

Avoided greenhouse gas emissions

We calculate the avoided greenhouse gases (GHG) of our clients for investments in renewable energy and energy efficiency projects in accordance with International Financial Institutions (IFI) Harmonized Approach to Greenhouse Gas Accounting, which is in line with the GHG Accounting Protocol. GHG avoidance for renewable energy projects is calculated as the expected electricity production once the project is operational, multiplied by the country emission factors in accordance with the IFI harmonized list of emission factors. The GHG avoidance for energy efficiency projects is the difference between the project GHG emissions and the most likely alternative (i.e. industry average GHG emission per kWh energy production). For investments in green funds and ‘green lines’ to financial institutions, we estimate the expected GHG avoidance using a tool based on average GHG avoided per monetary unit per country and renewable energy technology. The reported amount of GHG avoided represents the expected annual GHG avoidance to be supported by the commitments of the reporting year.

Catalysed funds

Catalyzed funds are amounts committed by third parties that are demonstrably mobilized by FMO; for example syndicated loans where FMO is mandated arranger and parallel loans where FMO is formally in the lead.

Client satisfaction

Client satisfaction shows how satisfied clients are with the services FMO offers on a scale of 1 to 10. The client satisfaction score is calculated as the average of the scores given by respondents and expressed as an absolute number between 1 and 10. The scores for 2018 are based on 193 responses from clients that participated in a joint client satisfaction survey with DEG and Proparco, held in May 2018. The previous survey was held in 2015. 

Committed portfolio

Total committed portfolio includes: 1) for debt – total commitment made to customers (committed not disbursed and outstanding principal amount), netted for guarantees received; 2) for equity – current exposure (fair value) plus remaining commitment reserved for all investments made; 3) for guarantees – limit amount.

Equivalent number of people served via power generation

The number of people served via power generation projects is estimated by dividing the annual amount of electric energy delivered to off takers during the reporting period by the power consumption per connected capita. The power consumption per connected capita is calculated as the electric power consumption per capita divided by the electrification rate (source: World Bank / IEA data).

Green investments

Investments are labelled “Green” following an internal approval process. Green investment criteria relate to the following three categories:

  • Climate Change Mitigation: Activities that contribute to either reducing GHG emissions into the atmosphere, or sequestering GHG emissions from the atmosphere.

  • Climate Change Adaptation: Activities intended to reduce the vulnerability of human or natural systems to the impacts of climate change and climate-related risks, by maintaining or increasing adaptive capacity and resilience.

  • Other Footprint Reduction: Activities that do not directly target climate change mitigation or adaptation yet have a positive impact on the environment including water, waste and biodiversity.

FMOs green eligibility criteria are aligned with the Common Principles for Climate Mitigation Finance, the Common Principles for Climate Adaptation Finance and the International Development Finance Club (IDFC) “Other Environmental Activities” with regard to water supply, waste water treatment, industrial pollution control, soil remediation and mine rehabilitation, waste management, biodiversity and sustainable infrastructure.

Net Promoter Score

Net Promoter Score shows the extent to which clients would recommend FMO to others. The client is regarded as 'promoter', 'passive' or as 'detractor'. The NPS is calculated by subtracting the percentage of 'detractors' from the percentage of 'promoters'. The score is expressed as an absolute number between -100 and +100. The scores for 2018 are based on 177 responses from clients that participated in a joint client satisfaction survey with DEG and Proparco, held in May 2018. The previous survey was held in 2015. 

Number of micro loans financed

Micro enterprise loans with an original value up to USD 10,000, as reported by our financial institution customers.

Number of SME loans financed

SME loans with original value between USD 10,000 and USD 1,000,000, as reported by our financial institution customers.

Reducing Inequalities investments

Investments are labelled as “Reducing Inequalities” following an internal approval process. Reducing Inequalities investment criteria relate to the following categories:

  • The invested funds flow at least 50% to a Least Developed Country (LDC). These are countries identified by the United Nations as “low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets.”

  • Microfinance;

  • Agricultural SME lending;

  • Smallholder finance;

  • Agribusinesses working with smallholders;

  • Youth finance;

  • Off-grid power;

  • Innovative solutions for the ‘Base of the Pyramid’;

  • Women-owned SME lending;

  • Other inclusive business investments targeting female end-beneficiaries.

Smallholders supported

The number of smallholder farmers that have had active support from the client company in order to improve production practices that have beneficial effects on yields and/or reduce environmental degradation and/or improve social practices during the reporting period. Smallholder farmers are defined as marginal and sub-marginal farm households that own and/or cultivate relatively small plots of land. Common characteristics of smallholder farmers are that they have low access to technology, limited resources in terms of capital, skills and risk management, depend on family labor for most activities, and have limited capacity in terms of storage, marketing and processing. This definition has been sourced from the UN Food and Agriculture Organization (FAO). The source document is usually a social report or management report from our customer.

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