Higher impact portfolio

Note: new commitments consist of €1,873 million for FMO, €135 million for government funds and €629 million catalysed funds. Below our 2018 new commitments.

SDG 8 Decent Work and Economic Growth

In 2018, FMO invested €2.6 billion (2017: €3.1 billion) in projects and products that support SDG 8, in line with our target. This amount includes €0.7 billion invested on behalf of other parties. We estimate that this has supported 615,000 direct and indirect jobs (2017: 900,000), which puts us below our ambition to double the number jobs supported by 2020. The lower number of jobs is mainly explained by the lower volume invested in 2018, in particular for our Private Equity department.

A more detailed look shows we invested, from FMO’s book and on behalf of other parties, €1.2 billion in the financial institutions industry, €504 million in agribusiness, food and water and €620 million in the energy industry. In terms of our products, €2.1 billion was invested in debt products and € 217 million in (trade) guarantees. At €255 million, our equity investments failed to meet our target due to unfavourable market conditions and a greater focus on exits, direct investment and portfolio management.

Investments were made in all four regions with slightly more funds flowing to Africa (€710 million) and Asia (€715 million). A further €579 million was invested in Europe and Central Asia and finally we invested €578 million in Latin America and the Caribbean.

In line with the Dutch Ministry of Foreign Trade and Development Cooperation's 2018 vision on sustainable development we invested a total of €594 million in the European Neighbourhood. The majority of these investments concerned investments in Turkey, Georgia and Armenia. 

We are particularly proud that the European Commission selected FMO to manage the NASIRA risk-sharing facility, which includes €75 million in guarantees and up to €8 million in technical assistance. This encourages banks in the European Neighbourhood and Sub-Saharan Africa to provide loans to young, female and migrant entrepreneurs for their (micro) business, thereby tackling one of the root causes of irregular migration. In 2018, FMO received expressions of interest in NASIRA to guarantee Syrian entrepreneurs in Jordan, and young entrepreneurs in Lebanon and Egypt. The Dutch government also supports NASIRA with a further €7.5 million.

SDG 10 Reduced Inequalities

In 2018, FMO invested, from FMO’s book and on behalf of other parties, €958 million towards reducing inequalities, exceeding our target of €627 million. Of this, €531 million contributed to reducing inequalities within countries, through investments in inclusive business such as microfinance, gender, and investments to smallholders, youth and off-grid projects. The majority of these investments (€361 million) were made through loans to banks. A sizeable investment went to Khan Bank LLC in Mongolia (this investment is described in more detail in a separate case study).

In addition to reducing qualities within countries, FMO invested €495 million towards reducing inequality between low and higher income countries. More than half of these funds (€273 million) flowed to Bangladesh, Myanmar and Uganda through investments in agribusinesses, energy projects, microfinance and other banking services.

Inspired by the Impact Management Project, we present our sector impact indicators in the context of the intended outcomes for the end-beneficiaries. Please refer to chapter ‘How we report’ for the indicator definitions.

Impact dimension

Access to finance



By financing financial instutions with an SME portfolio, FMO aims to increase access to finance and business growth of SMEs thereby supporting jobs, inclusive development and economic growth.

By financing financial instutions with a microfinance portfolio, FMO aims to increase access to finance and business growth of microentrepreneurs.


FMO targets SMEs because they are financially underserved and typically provide more jobs than corporates relative to capital invested (Source: IFC, 2010, Scaling-Up SME Access to Financial Services in the Developing World). FMO specifically targets women-owned and youth-owned SMEs as part of the Reducing Inequalities label.

FMO invests in microfinance to create access to finance for poor households, who can use microloans to raise and smoothen household income, thereby reducing their vulnerability to economic stress.

How much

Number of SME loans in outstanding loan portfolio of FMO's financial institution clients

Number of micro loans in outstanding loan portfolio of FMO's financial institution clients









The number of SME loans increased as a result of new investments and increase of SME loans with existing clients.

The number of micro loans decreased as a result of one client reducing its micro loan portfolio, which could not be balanced by new microfinance investments.

FMO’s contribution

FMO creates value for its clients through offering financial products that commercial banks or other investors do not provide, or do not provide on an adequate scale or on reasonable terms (additionality criterium). In addition, we support clients to implement ESG practices in accordance with international standards and provide technical assistance when needed. We offer our clients access to our networks, for example to share best practices with other FMO clients. FMO has also initiated and supported (banking) sector initiatives in several countries to promote sustainable finance.


The main risk is that our clients' stakeholders remain underserved if impact does not occur as intended.

Impact dimension

Support for smallholder farmers


Access to energy



By financing agricultural companies that support smallholders, FMO aims to improve access to markets and infrastructure for smallholder farmers. FMO finances agricultural companies that support smallholder farmers to improve their production practices thereby increasing yields and farmer income.

By financing power generation projects and off-grid power solutions, FMO aims to increase access to reliable and sustainable energy.


FMO targets smallholder farmers because they produce over 70% of the world's food needs, whereas they have limited resources to invest in business improvements and a weak market position.

Access to energy is not self-evident in many developing countries; the average electrification rate in low income countries is 28%. FMO invests in the building of (sustainable) power generation capacity in developing countries which, combined with investments in power distribution, improves access to energy.
By financing off-grid power solutions, FMO invests in access to energy for rural populations.

How much

Number of smallholders supported by companies financed by FMO

Equivalent number of people served via power generation in FMO's porfolio of Energy clients (loan and equity portfolio)









The number of smallholders supported is higher due to new investments and increased reach of existing clients.

The increase of equivalent people served is a result of new investments and increased power production of existing clients.

FMO’s contribution

FMO creates value for its clients through offering financial products that commercial banks or other investors do not provide, or do not provide on an adequate scale or on reasonable terms (additionality criterium). In addition, we support clients to implement ESG practices in accordance with international standards and provide technical assistance when needed. We offer our clients access to our networks, for example to share best practices with other FMO clients. FMO has also initiated and supported (banking) sector initiatives in several countries to promote sustainable finance.


The main risk is that our clients' stakeholders remain underserved if impact does not occur as intended.

SDG 13 Climate Action

In 2018, FMO invested, from FMO’s book and on behalf of other parties, €940 million in green transactions, exceeding our target of €796 million. Some €473 million went towards the energy sector, mainly renewable sources of energy such as wind and solar.

A further €222 million in loans were provided to financial institutions for green products and €189 million in agribusiness, for example to avoid flaring emissions, introduce energy efficient design and climate smart agriculture, reduce greenhouse gas emission and generate free electricity. These investments resulted in an estimated 988,000 tCO2eq avoided greenhouse gas emissions (2017: 1,600.000 tCO2eq), putting us on track towards our ambition to double the avoided greenhouse gas emissions by 2020.

In 2018, FMO launched a Global Forestry Investment Program with the initial extension of $23 million in financing to sustainable forestry plantation companies in Ghana, Sierra Leone and Laos. While such investments are considered high risk due to their uncertain returns, FMO believes in them because of their contribution to all three of our SDGs. Plantations sequester greenhouse gasses, create jobs, stimulate local markets and reduce inequalities between countries.

Not all our SDG 13 achievements were related to investments. In 2018, we published work for consultation on a methodology and accounting approach that will help us create an investment portfolio that supports the 1.5°C pathway outlined in the Paris Agreement. It took us a considerable amount of work to determine what kind of investments could potentially achieve this crucial goal and how we could subsequently report on it in a meaningful way. We proudly presented this work at the COP24 climate change conference in 2018 and intend to implement and align our approach with other stakeholders to get to international standards in the years to come.

In addition, we signed The Spitsbergen Ambition along with fourteen other Dutch financial institutions. Together, we will reduce CO2 emissions in line with the Paris Agreement and report on the climate impact of our investments, using climate scenario analyses and science-based targets. The Spitsbergen Ambition fits perfectly with FMO’s Sustainability Policy and our strategic priority to contribute to SDG 13.

ESG performance

In 2018, we introduced a new ESG performance tracker to identify and manage our client’s highest priority ESG risks, based on IFC Performance Standards on Environmental and Social Sustainability and international best practice. We set ourselves a target to ensure that 90% of high-priority ESG risks related to new clients contracted in 2017 and where FMO was in the lead, should be either fully compliant with our standards or actively on their way to compliance. The 17 clients that fit these criteria accounted for a total of 164 risks that were actively tracked. In 2018, our clients managed effectively 95% of the risks, exceeding our target of 90%.

In 2018 we implemented the human rights and land rights position statement that we developed in 2017. We developed and implemented human rights due diligence guidance, conducted human rights training and awareness-raising activities, and ran human rights risk assessment pilots. In addition, we published our first human rights progress report, which describes how we embed human rights in our way of working in accordance with the United Nations Guiding Principles (UNGP) on Business and Human Rights Reporting Framework.

FMO not only wants to hold its clients to the highest standards, we want to implement best practices in our own operations. That is why in 2014, FMO and German counterpart DEG set up an Independent Complaints Mechanism (ICM). In 2018, French development finance institution Proparco announced it would join the mechanism in 2019 and a new ICM panel member was welcomed. In 2018, one new complaint was filed against FMO and DEG for their investments in Lomé Container Togo, alleging accelerated coastal erosion since the construction of the terminal. The Independent Expert Panel found the complaint admissible and further handling commenced.

On July 16, 2018 FMO received a writ of summons initiating legal action by Honduran NGO COPINH and the children of the late Berta Cáceres against FMO in relation to our former financing relationship with the Agua Zarca project. FMO recognizes the right to a legal process and trusts that the court will confirm that FMO acted in good faith.

Agribusiness, Food & Water

FMO adds value to the entire food value chain, ranging from fertilisers and seeds to smallholder farmers and food processors, traders and companies. We finance cash crops like coffee, tea and palm oil and proteins from chicken and fish, crucial for feeding growing populations. We are also concerned about access to water, carbon sequestration through forestry, and financing smallholder farmers. Combined, our investments help nations to become less reliant on food imports, create jobs and tackle climate change. Of course all our investments are held up against our ESG principles.

In 2018, this sector invested €504 million, exceeding its target of €427 million. Highlights of the year include the launch a global forestry programme with an initial investment of $23 million financed mostly out of the Infrastructure Development Fund (IDF) - including capacity development budget out of the MASSIF fund- to sustainable plantations in Ghana, Sierra Leone and Laos. FMO also committed $5 million to the Meloy Fund, which seeks to create economic opportunities for small-scale fisheries in Indonesia and the Philippines while conserving critical marine habitat.

In East Nicaragua, we deepened relations with existing client Mercon by providing a second loan to finance a coffee mill that will enable local farmers to process their own harvest. FMO also supported Nigeria’s cocoa business with a $35 million loan to food trader ECOM, whose expert agronomists help some 500,000 farmers to improve their yield. Also in Nigeria, meanwhile, we contributed €34 million towards a €1 billion investment in Indorama’s new fertiliser plant that minimises waste by using cutting-edge technology.

Financial Institutions

Financial institutions are crucial to helping entrepreneurs and businesses flourish by providing access to finance. At the same time this allows them to be agents of change - for instance in green and inclusive development. FMO engages with those financial institutions that take up this role and provides them with long-term financing solutions, knowledge and network. In 2018 FMO hosted the fifth edition of the Future of Finance conference, which attracted 500 people from 60 countries. We also aim to leverage our impact by taking along other, often private, investors, for instance through the funds managed by FMO Investment Management.

In 2018 FMO further increased its activities in the financial institutions sector specifically focussing on climate action and reducing inequalities. On the climate side FMO met its investment target and invested in two debut green bonds in India. On the reducing inequalities side FMO significantly exceeded its investment targets. We entered new least developed countries such as Ethiopia and expanded our presence in existing ones such as Myanmar. FMO also stepped up support for female entrepreneurs by hiring a gender finance specialist, organising a financial inclusion leadership journey for female bankers in Zambia and organizing the Power of Partnerships conference, which was headlined by Queen Máxima of the Netherlands. The conference brought together female entrepreneurs from all over the world and we will follow up on this event by working together with partners to jointly develop expertise for female entrepreneurs.

At the same time we also engaged in a number of innovative projects, such as with Kenyan start-up Apollo Agriculture to provide smallholder farmers with high-quality farming inputs on credit, crop insurance and voice-based training. In 2018 we also began implementing the FinForward programme, which was designed last year with US-based FinConecta to promote technology integration between financial institutions and ‘fintechs’ with the aim to increase accessibility and affordability of financial services for underserved entrepreneurs. Overall, we moved slower on these plans than expected. We found that the market was less prepared for the innovation that FinForward presented, but this seems to be a global issue as more financial institutions are figuring out their digital future.

Furthermore, we were proud to sign the NASIRA risk-sharing facility with the European Commission as their first partner for the European Fund for Sustainable Development. This programme will allow us to support local financial institutions to provide loans to young, female and migrant entrepreneurs by sharing in the risk of these loan portfolios. 


When FMO began building an energy portfolio in earnest 10 years ago, the market was relatively small and hardly focused on renewable energy. In a sign of the stellar pace at which the market has evolved, FMO’s new commitments amounted to €620 million in 2018, achieving 142% of the target we set for the year. FMO’s portfolio now combines on-grid solutions such as power generation, transmission and distribution with off-grid solutions such as solar home systems and distributed energy. 

Typical of FMO, our commitment to the energy sector is long-term and counter cyclical. In 2018, we made substantial investments in the power sector in Argentina and Turkey, despite significant macro-economic turbulence. We also made our first-ever energy investment in the Ukraine: a PV solar plant developed by our global strategic partner Scatec Solar ASA.

The year was also marked by an increased emphasis on deepening relationships. Our energy experts organised an ESG workshop for one of our key partners in Africa, DI Frontier, to ensure sustainable hydropower development.  We also facilitated clients from Mozambique and Laos to exchange experiences around community engagement and development. Where possible, we encourage our clients not only to generate electricity for the country, but also to create value for host communities and local service providers.

In 2018 our energy department conducted a number of local currency deals in India and Turkey. For companies earning their income in local currencies taking out loans in euros or dollars can be risky in case of economic distress, such as demonstrated when Argentina and Turkey devaluated their currencies, and in light of rising interest rates. FMO will continue to encourage the use of local currency loans to support developers and governments to truly embed renewable energy in the local economies.

Private Equity

Our private equity activities went through a transitional period in 2018. In the preceding years we built up an equity portfolio consisting of roughly 60% invested in private equity funds and 40% in direct investments and co-investments. As we commenced implementation of our new strategy, we look to shift this balance towards 60% direct investments, co-investments and platforms versus 40% in funds.

In 2018, we managed to achieve our target of shifting emphasis to direct and co-investments, although our total investments of €273 million did not meet our target investment pace of €408 million per annum. This reflects a somewhat muted fundraising environment for funds in Africa and Latin America & the Caribbean, the relatively higher efforts required to source and execute direct investments, as well as our choice to opt out a number of potential investments to secure good returns in the long run.

We continued to build up our team by hiring a number of specialists and increasing our understanding of the direct investment market, which will serve as a good foundation for years to come. In addition, we actively managed our portfolio and ramped up the number of exits, which included Proenfar in Columbia, Equitas in India, CrediQ in El Salvador and Softlogic Life Insurance in Sri Lanka.

In 2018, we pooled our expertise in venture capital into a dedicated team, FMO Ventures. Starting in 2019 FMO Ventures will further explore running a venture capital program with a focus on pioneering technologies in our three core sectors. We are excited by the dynamism found across Asia and in African cities like Nairobi, Cape Town, Cairo, Tunis and Lagos, where start-ups are doing cutting-edge work in areas like financial technology and solar energy. By providing venture capital we believe we can contribute to the development of green and inclusive solutions. As with all our activities, we will look for opportunities to partner with other parties active in this area to create impact at scale. By investing in Partech’s Africa focussed Venture Capital Fund in 2018 we found a good knowledge partner for Venture Capital. Partech Ventures is a European and Silicon Valley based VC firm.

Highlighted investments for the year include PACT (a microfinance institution in Myanmar), Giriraj Renewable Private Limited (renewable energy platform in India), Biosidus (co-investment in Argentina pharmaceuticals company), d.light (off-grid solar) and Cardinalstone (first-time fund targeting mid-size companies in Nigeria).

During 2018 we continued our involvement with Arise. Arise is an investment platform that together with Norfund and Rabobank we initiated in 2016. Arise partners with sustainable locally owned financial services providers in Sub-Saharan Africa and supports them to become financially sustainable and a strong contributor to the economy. In 2018 Arise strengthened its presence in Mozambique as well as Uganda, where Arise contributed to consolidation in the sector. FMO supported Arise in laying the foundation for a Technical Assistance (TA) Facility that will be launched in 2019 to help investees enhance their market competitiveness.

Also in 2018, we deepened our relationship with key partners, primarily by sharing our knowledge and creating valuable networking opportunities for them. In Amsterdam, we organised a seminar for fund managers in our portfolio to discuss investment and remuneration strategies. And in Georgia we organised an ESG master class for our Eastern European funds. In addition, we invested considerable time and energy in formalizing our equity processes, which will allow us to optimise our approach in 2019 and onwards.

Dutch business

FMO is a globally operating development bank with the Dutch state as majority shareholder. That is why we also support investments in and exports to developing countries by Dutch businesses. In 2018, NL Business (and other departments) made a total of €30 million in new commitments, which is below the target of €100 million. NL Business continued building its team and the transactions we aim to complete are catalysing in nature (examples of transactions we mobilized are with Rabobank and also with SMT) and additional to the market, often making them complex with long lead times.

We invested development capital on behalf of the Dutch government in projects including pre-feasibility studies and proof of concepts in areas like health, food and water. For example, in Kenya we worked with Philips and Amref Health Africa (in the Netherlands known as Amref Flying Doctors) to pilot local health clinics that can help to reduce gender inequality with a potential of scale-up (refer to case study). FMO also received the commitment from the Dutch government to expand its Development Accelerator facilities. In 2018 we completed 12 project development transactions and built a substantial pipeline of potential investments. We actively developed our partnerships and signed a new Memorandum of Understanding with Netherlands Water Partnership (NWP). We also made a start with the Finture Lab, through which we aim to finance innovative start-ups and scale-ups with ambition to export to or invest in emerging markets. By filling a gap in available funding we enable development of Dutch innovative technology-enabled solutions towards high-risk pioneering technologies such as energy storage which would allow countries to finally move away from fossil fuels and fully rely on renewables.

Finally, we continued to explore the creation of a new company to combine the NL Business activities with the international instruments of the Netherlands Enterprise Agency (RVO) with the aim to better support Dutch companies through delivering international solutions. In January 2019 the Dutch cabinet decided that to this end an institution separate from Invest-NL will be set up. Organizing these activities in a separate institution will allow for a clear international focus, clear governance and more effective and efficient operations. The new organization will provide a one-stop shop for internationally oriented Dutch businesses that are looking for project development and financing solutions and enable them to become more competitive in the international markets. In doing so it will be additional to the market. A process will be started to set up the institution with the Dutch State and FMO as shareholders. A draft law on this new institution is expected later in 2019.