Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden (FMO)

Document Summary: 

Organizational profile: FMO is the Dutch entrepreneurial development bank. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50-year proven track-record of empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With a committed portfolio of EUR 10.4 billion spanning over 80 countries, FMO is one of the larger bilateral private sector developments banks globally.

Through its Forestry Program, FMO is looking to provide significant new funding to forestry projects in emerging markets. The aim is to sequester and/or avoid – depending on its carbon intensity – between 2.5 – 5 million tonnes of CO2 and provide permanent employment in mainly rural areas. Currently FMO’s main focus is on investments in late brownfield forest plantations, integrated plantation with wood processing facilities and agro-forestry projects. FMO is looking to diversify its forestry portfolio to sustainable forest management, forest conservation and non-forest timber projects, with the view to achieve a balanced (zero emission) FMO portfolio by 2050.

In 2021, the United Kingdom government and FMO established Mobilising Finance for Forests (MFF), a blended finance investment program, to combat deforestation and other environmentally unsustainable land use practices contributing to global climate change. Through MFF, FMO will invest up to £150 million across a mix of investment funds and direct investments in selected tropical forest regions in Africa, Asia and Latin America. MFF will target projects in two categories: a. Projects that increase the value of standing forests to lower the incentive to cut down forests (e.g. harvesting non-timber forest products such as nuts, seeds or native forest coffee, carbon offsetting schemes, eco-tourism, conservation projects); b. Projects that integrate forest protection and restoration into agricultural production to reduce deforestation pressure (e.g soy, cattle, palm oil, cocoa, timber).

Financing Instrument: Loans (senior and mezzanine), Equity investments (including preference equity), Guarantees

Project scale: Up to a maximum 49% of project size with a minimum investment of USD 7.5 million and a maximum of up to 40 million.

Recipient countries regions/country groups: Emerging markets

Eligibility Criteria: FMO’s finance activities are limited to low income-/emerging market countries. These are defined as: countries (i) which were classified by the World Bank in its recent World Development Report as low-income economies, lower middle-income economies and some upper middle-income economies, (ii) countries or regions expressly designated as such by the Dutch government.
 

Application guidelines: Within its key sectors FMO identifies potential opportunities through a deep-rooted network in developing countries. Their initial assessment focuses on country, investment plan, development impact and their role as financier.
Investment plans should preferably address the following:
- commercial viability
- a sound investment plan with financial projection covering the investment period
- a thorough feasibility study and complete analysis of the market
- sponsor profile and organizational structure with special focus on corporate governance
- a robust environmental policy
- compliance with internationally acceptable social standards.

Business proposals can be submitted through FMO's website or to afdagri@fmo.nl    

Publication Date
Wednesday, 29 December 2021
Applicable location
Africa
Americas
Asia
Europe
Oceania
Topic/Theme
Agroforestry
Climate change
Database
Financing opportunities