1 Corporate information
FMO was incorporated in 1970 as a public limited company with 51% of shares held by the Dutch Government and 49% held by commercial banks, state unions and other members of the private sector. The company is located at Anna van Saksenlaan 71, The Hague, The Netherlands and is registered under ID 27078545 in the Chamber of Commerce. FMO finances activities in emerging markets and developing economies to stimulate private sector development. In addition, FMO provides services in relation to government and public funds and programs.
During the current financial period FMO entered into an updated support agreement with the Dutch Government. This agreement sets out the conditions for when the Government is obliged to support FMO in meeting its obligations. The agreement includes an arm’s length amount that is payable by FMO annually. The updated agreement is effective from 1 July 2023. The updated agreement introduces a limitation on the amount that can be borrowed by FMO in financial markets. This limitation is currently set at 2.5 times FMO’s current total debt.
Financing and investing activities
FMO is the Dutch entrepreneurial development bank. We support sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. We specialize in sectors where our contribution can have the highest long-term impact: financial institutions, energy and agribusiness. FMO’s main activity consists of providing loans, guarantees and equity capital to the private sector in the emerging markets and developing economies.
We arrange syndicated loans to mobilize funds, by bringing together investors – commercial banks and other development finance institutions (DFIs) - with FMO for structuring these transactions. This enables us to provide our clients with increased access to finance and more diversified lending, while giving our financial partners efficient opportunities to enter new markets.
Commercial fund management
FMO's subsidiary, FMO Investment Management B.V. (FMO IM), provides investment advice for third party investment funds, which are invested in FMO’s transactions in emerging and developing markets. Through these funds FMO IM offers investors access to our expertise in responsible emerging market investing.
Services in relation to government and public funding
Apart from financing activities from its own resources, FMO provides loans, guarantees and equity capital from government funding, within the conditions and objectives stipulated in the agreements. The funding consist of subsidies provided under the General Administrative Law Act regarding MASSIF, Access to Energy Fund (AEF), Building Prospects (BP), Capacity Development Program (CD) and Dutch Fund for Climate and Development (DFCD). In addition, funding is provided by the UK Government for Mobilizing Finance for Forests (MFF).
FMO incurs a risk in MASSIF as it has an equity share of 2.16% (2022: 2.16%). With respect to the remaining interest in MASSIF, and the full risk in the other government programs, FMO has a contractual right and obligation to settle the results arising from the programs’ activities with the Dutch Government. The economic risks related to these funds are predominantly taken by the Dutch Government, and FMO has limited control over policy issues regarding these funds. FMO receives a remuneration fee for managing these funds. Therefore, with the exception of FMO’s equity share in MASSIF, the funds' assets, results and liabilities are not included in the annual accounts.
The European Development Financial Institutions Management Company (EDFI MC) (of which FMO is one of the shareholders together with the other EDFIs) was established in Brussels to manage European Commission (EC) funding for the Electri-FI global facility, the Agri-FI investment facility and the Electri-FI Country. FMO, as accredited entity for the EC, acts as delegatee (contractee) for the EC and has sub-delegated all operational activities related to these facilities to the EDFIMC.
FMO was accredited by Green Climate Fund (GCF) and capitalizes on FMO's experience in mobilizing and enabling the private sector in developing countries towards low-emission and climate-resilient investments. In this context, FMO has received funds from the EU, USAID and the Dutch Government with the purpose to invest directly in Climate Investor One (CIO), a facility raised by FMO and managed by Climate Fund Managers (CFM). CIO is a blended finance, capital-recycling facility mandated with delivering renewable energy infrastructure projects in emerging markets through its contribution to each phase of a projects lifecycle.
The EC and FMO have an agreement for risk sharing facility NASIRA for an amount of €100 million. The facility uses guarantees to allow banks to on-lend to underserved entrepreneurs within the European neighborhood and Sub-Saharan Africa. The goal of these guarantees is to allow local banks to provide loans to groups they perceive as too risky to finance without guarantees.
Furthermore, FMO and the EC signed the guarantee agreement for the FMO Ventures Program. The program's aim is to invest in both fund and direct investments in Africa, the European Neighborhood and Asia (excluding China). Next to equity investments, the Program will also have a dedicated technical assistance program to support investees of FMO Ventures Program and will promote the development of local Venture Capital ecosystems.
Mobilizing Finance for Forests (MFF) was established by the United Kingdom (UK) government as a blended finance investment program to combat deforestation and other environmentally unsustainable land use practices contributing to global climate change. Through MFF, FMO has been appointed by the UK government to invest up to £152 million across a mix of investment funds and direct investments in selected tropical forest regions in Africa, Asia and Latin America.