Dutch Fund for Climate and Development

Document Summary: 

Organizational profile: Through the Dutch Fund for Climate and Development, Dutch development bank FMO will make investments in projects aimed at climate adaptation and mitigation in developing countries. FMO has partnered with Climate Fund Managers (“CFM”), World Wildlife Fund Netherlands (“WWF”) and SNV Netherlands Development Organisation (“SNV”) to manage the Dutch Fund for Climate and Development (DFCD). DFCD will utilize €160 million in funding. The DFCD will focus on several high impact investment themes, including climate-resilient water systems, water management and freshwater ecosystems, forestry, climate-smart agriculture, and restoration of ecosystems to protect the environment.
The DFCD will be structured with three separate but operationally linked facilities, each with a unique role across the project lifecycle; each with a unique thematic sub-sector focus. The Origination Facility will identify business cases from the earliest ‘Discover’ stage and work with counterparts to ‘Structure’ projects and prove bankability. Viable projects will be offered to the two investment facilities for further development funding, core activity financing and post financing technical assistance. The Origination Facility will provide grant funding and Technical Assistance for its activities.
The Land Use Facility targets investments that have graduated from the Origination Facility in sectors relating to agroforestry, sustainable land use and climate resilient food production. The Land Use Facility has at its disposal the full range of financial instruments offered by FMO to provide growth finance to companies, including grants, equity and debt.
Managed by Climate Fund Managers, the Water Facility will also target investments that have graduated from the Origination Facility in sectors related to water and sanitation infrastructure, as well as environmental protection.

Financing Instrument: Grants, Technical Assistance, Debt, Equity
Project scale: €30 million will be allocated to the Origination Facility to be deployed in ~ 70 projects (offering grants up to €350,000, in addition to Technical Assistance). €55 million will be allocated to the Land Use Facility to be deployed in ~ 25 companies. The Land Use Facility can offer  debt and equity financing solutions between €1 million and €10 million (or more in combination with other FMO funding sources), however, the project sponsor needs to be financially strong (i.e., in principle have a total value of assets of at least 10 million USD, or an annual turnover of at least 15 million USD).
Recipient countries regions/country groups: Global (Developing Countries) and Least Developed Countries (LDCs) in particular.
Eligibility Criteria: The DFCD will focus on a set of high impact investment themes within four key Rio Marker 2 sectors all of which are critical to tackling climate change and achieving the SDGs:
- Climate resilient water systems and freshwater ecosystems: drinking water & sanitation supplies, restoration & sustainable management of wetlands, headwaters & floodplains;
- Forestry for the future: promoting afforestation and reforestation;
- Boost food security with climate smart agriculture: funding more sustainable, efficient and productive approaches from smallholder farmers to agri-business;
- Protecting the environment, protecting people: restoration of ecosystems, such as wetlands and mangroves, which are nature’s best defenses against extreme floods, droughts and storm surges.
The consortium seeks to cooperate with a diverse stakeholder base, including; civil society; (local) government; NGOs and the private sector in the landscapes the DFCD is active in. There will be no Calls for Proposals by any of the three Facilities.
The following questions criteria are assessed for potential projects:
- The business proposal undertakes its (main) activities in a country (or countries) on the OECD-DAC Country list
- The principal objective of the business proposal is to create climate adaptations or mitigation activities
- The proposal has (or could be developed to have) activities or objectives aimed at women and / or vulnerable groups (poor, children and youth, disabled, ethnic communities, irregular migrants, smallholder farmers, other)
- The proposal fits with national development plans and priorities of the country (or countries) where the business activities will take place
- The proposal (also) includes activities other than those focused on institutional strengthening (eg HR Development, trainings, policy advise) or enabling environment (legislations change, policy support etc.)
- The proposal is potentially commercially viable and financial sustainable and is not financed by public or governmental funds
If the project is in early development stage, and requires more than €50,000 to fully develop the proposal, it may be eligible for the Origination Facility.
If the project is currently (close to) commercial viability and financial sustainability, and requires more than €1 million in financing, it may be eligible for the Land Use Facility
Application guidelines: If you are interested in applying for funding, and you believe that your projects’ goals are in line with the overall objectives of the DFCD, simply answer the questions on DFCD's contact us webpage. Following the round of questions noted above in the eligibility criteria, an email can be sent either to
origination@thedfcd.com or landuse@thedfcd.com.

Publication Date
Thursday, 01 April 2021
Applicable location
Africa
Americas
Asia
Europe
Oceania
Topic/Theme
Climate change
Sustainable land use
Agroforestry
Forest landscape restoration
Database
Financing opportunities