Letter from the ExCo of the Fund Manager

Dear reader,

2019 was a rough year for global development cooperation and climate action. The Madrid climate conference ended in an agreement to disagree and postpone a future consensus. Despite scientific reports that the window of opportunity for meaningful climate action is closing, nations have not been able to muster the strength to act as one community in charge of saving the global commons.

Against this backdrop of multilateral strain and rising systemic risks, the global community continued its efforts to attain the Sustainable Development Goals of the 2030-Agenda. Despite signs of progress, investments needed to overcome the USD 2.5 trillion financing gap are still lagging, particularly in fragile states, in climate adaptation and in the human development sectors such as health and education. At the time of publication of this report, these concerns are compounded by the COVID-19 pandemic in the first months of 2020. The expectation is that the world will face the worst recession since the Great Depression, due to the abrupt halt in economic activity in the last months. More than ever, there is a need for channels such as the FMO-managed state funds to play a counter-cyclical role and help address the global challenges of inequality and climate change.

The Development Accelerator (DA) addresses part of this financing gap by providing finance for the development of bankable projects in emerging markets with a demonstrable impact on the SDGs. As it remains difficult to find early- stage development capital, the facility aims to catalyse the development of impact projects and business activities with the Dutch business community in the agri-food, water, health and climate sectors.

In 2019, the DA signed contracts for eight new projects in Rwanda, Nigeria, Mexico, Vietnam, the Phillipines, Bangladesh and Indonesia. The investments include projects for hospital renovation, a wastewater treatment facility for a heavily polluted river and renewable energy projects. Once these projects will reach the financing stage, impact on the SDGs will become effective.

The year 2019 also made the first edition of Finture Solutions, a new initiative by FMO to support bold Dutch start-ups to scale up their business across emerging markets and create impact in the agri-food, renewable energy and water sectors. Five start-ups with innovative solutions were awarded development capital to scale their solutions in the markets that they operate in. The feedback from the market on Finture Solutions was positive and a new edition is scheduled for 2020.

We thank all our stakeholders for their continuous support, including our clients and investors, the Dutch Ministries of Finance and Foreign Affairs, the NGOs that help us to improve and our colleagues for giving their best every day.

The Hague, 8 May 2020

On behalf of the Executive Committee

Fatoumata Bouaré, Chief Risk & Finance Officer
Linda Broekhuizen, Chief Investment Officer
Peter van Mierlo, Chief Executive Officer