Deeper relationships

FMO attaches strategic importance to deepening relationships with our stakeholders, because by pooling resources and partnering with others we can significantly increase our impact. As part of these efforts, FMO mobilizes and blends funds, builds partnerships, manages funds on behalf of the Dutch government, supports Dutch businesses and empowers its employees and customers.

Mobilized funds

Mobilizing additional funds is important to finance the needs of the Sustainable Development Goals. Private sector investments are among the most important sources of financing to support development and growth in low- and middle-income countries. Increasing private mobilized capital is therefore a key focus for FMO.

Description and methodology

Our mobilization efforts are measured in terms of total committed portfolio and mobilized amounts in a given reporting period. Total committed portfolio reflects the risk exposure taken by third parties on active commitments. Mobilized amounts reflect the commitments made by third parties in a given reporting period, which distinguishes between new investments made to customers and transfers of risk participation from FMO to third parties. We focus on “direct mobilization”: investments made by other public and private participants due to the direct and active role of FMO. Indirect mobilization, as such, is excluded although we also participate in deals that are led by other DFIs and MDBs. Direct mobilized funds include commitments made by syndicate partners, FMO loan commitments that have been transferred to a third party (“funded risk participation”), and credit risk related to specific loan commitments that have been transferred to a third party (“unfunded risk participation”). It excludes equity investments. Parallel loans fall under the definition of direct mobilization but are excluded from the total committed portfolio figures as payments are administered by each parallel partner in the transaction and, as such, are not known by FMO.

Results 

Over the years, we built up a direct mobilized committed portfolio of €2.8 billion (1H 2019: €2.8 billion). Almost half – €1.3 billion – has been mobilized from private participants through our FIM funds and other commercial parties. Compared to the same period last year, the portfolio has not increased, which is the result of a significantly lower volume of new investments made in the first half of 2020 – €69 million (H1 2019: €340 million). This was insufficient to offset scheduled loan repayments.

Our efforts to crowd in more third-party capital towards projects with high development impact have been constrained by the economic crisis following the global COVID-19 pandemic. Commercial investors are typically more risk averse and are less interested in investing in developing and emerging markets at this stage of the crisis. Nevertheless, we continue to invest through the FIM funds and a new mobilizing vehicle established with Munich Re, which have expressed their ongoing commitment to co-investing in select FMO loans. Furthermore, we are exploring opportunities with our DFI and MDB partners to provide financing in places that need it most. We utilize one another’s networks and experiences to advance through the investment process, which is otherwise hampered by the current travel restrictions.

Public funds

Public investment partners allow us to make investments with a higher risk profile and development impact.

Description and methodology

We track the total committed portfolio as well as new investments made using the public funds we manage. This follows the same methodology as FMO funds, as described previously. Our public investment partners are the Dutch state, the European Commission and the Green Climate Fund. On behalf of the Dutch state, we manage Building Prospects, the Access to Energy Fund (AEF), the Dutch Fund for Climate and Development (DFCD) and MASSIF. With guarantees from the European Commission we were able to set up NASIRA and the Venture Capital program. We also manage the Capacity Development program that offers grants to strengthen the organizational capabilities of our customers. Finally, as an accredited entity, we receive funds from the EC and the GCF that are ultimately managed by EDFI MC (for ElectriFi, AgriFi) and by Climate Fund Managers for Climate Investor One. Grants provided through the CD program are excluded from the results.

Results

Over the years, our public funds have built up a total committed portfolio of €1.3 billion (H1 2019: €1.2), representing an increase of over 10% compared to the same period last year. This is explained by the relatively higher volume of new investments made in the past 12 months, which is reflected in a proportionally higher share of remaining commitment. 

In the first half of 2020, we invested a total of €65 million (H1 2019: €52 million) of which €32 million was through Building Prospects, €28 million was through MASSIF and €5 million was through DFCD. €13 million was invested through our Venture Capital Program to support early-stage, technology-enabled businesses. No investments were made through AEF or NASIRA during this period.

Stakeholder events

FMO organized several events for our stakeholders to share expertise, ideas and build new connections. In June, FMO and Rockstart organized the second edition of Finture Solutions, a competition to support Dutch startups and scale-ups that bring positive change in emerging markets across the world in the fields of AgriTech, Clean Energy, and Health. Since the COVID-19 pandemic prevented organizations from hosting a live pitch event, it was decided to shift to a virtual live stream event that was attended by over 100 people. After an extensive selection process, considering 80 applications and pitches of the top 10 startups, five winners were chosen. Each of these will receive €125,000 in development capital and support from FMO experts to grow their businesses. We further hosted 18 webinars and exchange platforms for approximately 700 attendees aimed at sharing knowledge, connections and expertise to equip our customers to deal with the effects of COVID-19 on their business and community.  

Employee engagement

FMO firmly believes it should practice what it preaches when it comes to the SDGs; for example with respect to Gender Equality (SDG 5). FMO has the ambition to be one of the leading organizations in the Netherlands, as well as among DFIs, in the realm of gender diversity and inclusion. 

Description and methodology

In 2019, we started reporting internally on 7 key performance indicators (KPIs) related to different gender aspects of the workforce: gender balance, recruitment, turnover, reward, bonuses, promotions and engagement.

Results

Per 30 June 2020, these indicators show a positive picture. The workforce is equally distributed, with 49% women and 51% men. The other indicators show there is no bias in recruitment, turnover, promotions or the distribution of bonuses. At least once per year, FMO conducts a (multiple linear regression) analysis to compare men's and women’s salaries, while correcting for part-time work, salary scale, age and tenure. The outcome of the latest analysis (dated 1 April 2020) showed that at a 5% significance level, there is insufficient evidence to indicate that there is a difference in the salaries paid to men and women at FMO in cases where equal work is performed. FMO awards women and men equally for the same work.

Over the years, FMO has become more international. More than 40 percent of our employees were born outside of The Netherlands and almost one-third has a nationality other than Dutch. In total, our colleagues represented 57 nationalities.