Sector focus SDGs

SDG 2 | Zero Hunger

By financing businesses across the entire agri-food chain we contribute to SDG 2, Zero Hunger. FMO targets smallholder farmers because in spite of meeting more than 70% of the world's need for food they have a weak market position and limited resources to invest in business improvements.

Number of smallholder farmers supported

Smallholders make up 85% of farmers globally. Being the first stage in numerous supply chains worldwide, several studies argue that smallholder agriculture might actually be the backbone of all SDGs.

The share of small-scale food producers in terms of all food producers in countries in Africa, Asia and Latin America ranges from 40 to 85%, compared with less than 10% in Europe. Yet, small-scale and family farmers’ productivity is systematically lower than other food producers. Both beneficiaries and agents of sustainable development, strengthening their resilience and adaptive capacity is critical, notably to reverse the rise in hunger, especially in developing countries.  

Description and methodology

Smallholder farmers are defined as marginal and sub-marginal farm households that own and/or cultivate relatively small plots of land, 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.[1]

Smallholder farmers supported have had active support from a 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. For Financial Institutions, smallholder farmers supported receive support from a customer company.

There is still limited data on smallholders’ economics, therefore counting the number of smallholder farmers supported can be used as a proxy. Information is collected directly from our customers via our impact questionnaires.


In 2020, companies financed by FMO supported 2.4 million smallholder farmers in 2020 (2019: 1.7 million). This increase includes 927,00 smallholders from our Equity portfolio that were previously excluded. FMO continued to invest in companies that support smallholders. For example, FMO invested €11 million in Zalar Agri, a fruit producer in Morocco. FMO’s first investment in the Moroccan agribusiness sector will support job creation and spur export-led economic growth in rural Morocco. Zalar Agri owns 1,370ha of fruit orchards (including apples, mandarins, avocados, pomegranates, and dates) and produces around 12,000 tons of fruit per year. This volume is expected to double with the help of our financing as the fruit orchards will mature and expand. The investment will contribute to food security by increasing the production and sales of healthy and safe fruits that are ultimately consumed in developing countries.

FMO also committed €10 million to the IDH Farmfit Fund. Other investors in the Fund are the Dutch Ministry of Foreign Affairs (providing a €50 million first loss tranche), and the supply chain managers Jacobs Douwe Egberts, Unilever, and Mondelez for an aggregate amount of €27.5 million. To strengthen smallholder value chains, the Fund will offer a range of financial instruments to actors across Africa, Asia, and Latin America. Prospective investees are Traders & Input Providers, Agri-SMEs, Financial Institutions, and Agri Tech & Fintech companies. Furthermore, a US$30 million Technical Assistance facility has been established, which is funded by DFID and the Gates Foundation.

SDG 5 | Gender Equality

To encourage more women to participate in the economy, we seek investments that support female entrepreneurs, reach women as end-users of goods and services and include women in the labor market.

Gender financing

FMO has had a Gender Strategy since 2017. We aim to assure women’s rights, to understand the gender-specific impacts of our investments and to ensure women and men enjoy equal economic opportunities. In May 2019, FMO joined the “2X Challenge – Financing for Women”, which was launched in 2018 by DFIs from the G7 countries. This multilateral initiative has the ambitious objective of deploying and mobilizing large amounts of capital to support projects and enterprises that empower women as entrepreneurs, business leaders, employees and consumers of products and services that enhance their economic participation.

Description and methodology

We measure impact on SDG 5 in various ways. First, through the RI label as described above, which is assigned to gender financing that focuses specifically on on-lending to women-owned SMEs or investments of which the majority of end-beneficiaries are female. Second, we identify investments that meet at least one of the eligibility criteria as defined by the 2X Challenge in the area of entrepreneurship, leadership, employment, consumption and investments through financial intermediaries. The Gender Finance Collaborative, in which FMO also participates, translated these criteria into a set of indicators that have been harmonized with the Global Impact Investing Network’s IRIS+ system.


In 2020, we invested €151 million in gender financing for women-owned SMEs (2019: €147 million). For instance, FMO provided the equivalent of a US$7.5m loan and an agreement for advisory services to Early Dawn Microfinance Company Ltd. (Dawn). The loan comes at a critical time, as microfinance institutions (MFIs) face liquidity concerns arising from the COVID-19 pandemic. In Myanmar, MFIs have resumed activities following a sector-wide suspension of operations in April and imposed restrictions in May. The funds will allow Dawn to continue its mission to serve women microentrepreneurs and small business owners and help them recover from the impact of COVID-19.

At year end, a total of €185 million of new investments in the Agribusiness, Food & Water, Financial Institutions, Energy and Private Equity sectors qualified for 2X. €123 million was on FMO’s own books, €16 million from public funds and €46 million from mobilized funds. This year, FMO has supported responsAbility Investments AG, a Swiss impact asset manager, in applying a gender lens to investments made through its climate fund. The climate fund is a private debt fund that aims to address the lack of access to clean power, primarily in Sub-Saharan Africa and South and South-East Asia. The fund qualified for the 2X Challenge as it committed to having at least 50% of its portfolio compliant with one or more of the direct eligibility criteria. The renewable energy sector is one of the least gender diverse industries where only 32% of the workforce are women.[2] Applying a gender lens will help the climate fund ensure that female talent is attracted and retained, and that women can contribute more to this growing industry.

SDG 7 | Affordable and Clean Energy

Access to energy is not a given in many developing countries. The energy supply in developing countries that is available can be unstable, and energy production is often polluting. SDG 7 aims for access to sustainable, reliable and affordable energy for all, which will improve the quality of life and enable sustainable economic development.

Energy production and equivalent number of people served

FMO invests in building (sustainable) power generation capacity in developing countries that, combined with investments in power distribution, improves access to energy. By financing off-grid power solutions, FMO invests in access to stable energy supply for rural populations. In low-income countries 41% of the population has access to electricity against 28% of the rural population.[3] FMO focuses on solar, wind and hydropower electricity supply.

Description and methodology

FMO tracks the amount of energy produced per year per project, based on customer reports. This is done both for direct customers such as corporates and operational projects, as well as for indirect customers which are investees under funds. The reported energy production concerns only on grid production. The off-grid energy production, for example from rooftop solar panels installed by our customers, is excluded.

The number of people served via on-grid power generation projects is estimated by dividing the annual amount of electric energy delivered to customers 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[4].


The companies in FMO’s energy portfolio produced 50,000 GWh per year (2019: 45,000 GWh per year[5]), of which 77% was generated from renewable sources. Approximately 14% came from solar, 28% from wind energy, 33% from hydro and the rest from other production types. The remaining 23% is from non-renewable sources, mostly related to gas-fired power plants. This served an equivalent of 81 million people (2019: 52 million). This increase is due to renewable power plants becoming fully operational, and inclusion of off-grid solar power in our portfolio. 

In 2020, we helped finance a solar power plant in Burkina Faso by investing €32 million in Kodeni Solar. Burkina Faso has some of the most expensive electricity in West Africa, because most is imported from Ivory Coast and Ghana. The government wants to encourage investment in the private sector to stimulate the distribution of electricity generation and increase the electrification rate from 20% to 80%. FMO is supporting this by funding four solar projects. This year, we provided a €32 million senior loan for the development and construction Kodeni Solar, funded partly by the Access to Energy Fund, FMO and the Interact Climate Change Facility.

  • 1 Definition according to UN Food and Agriculture Organization (FAO).
  • 2 IRENA (2019). Renewable Energy: A Gender Perspective.
  • 3 World Development Indicators, latest data available from 2017.
  • 4 Source: World Bank Development Indicator Database
  • 5 This is lower than reported in the 2019 annual report due to a data quality issue that was detected in 2021. The comparative figure for 2019, as such, was adjusted downward.