Letter from the MB of the Fund Manager

Stepping up

At the heart of FMO's strategy lies the commitment to enable entrepreneurs to increase inclusive and sustainable prosperity. Looking back at 2024, we must acknowledge several concerning trends: rising geopolitical turmoil and weakening institutional foundations threaten global stability and solidarity, disproportionately affecting the most vulnerable people. Additionally, we are witnessing the public withdrawal of several major financial players from their climate and environmental, social and governance (ESG) commitments. In this context, FMO calls on the financial sector to remain resolute in advancing sustainable investment strategies. Financial institutions play a pivotal role in driving local economic growth, reducing inequality, and driving meaningful climate action. Investing in access to (green) energy, food and finance creates long-term value, something FMO has demonstrated consistently over 50 years of impactful and profitable investments.

Amidst these challenges, FMO recognizes the urgent need to step up even more. However, meaningful change cannot be achieved alone, strong partnerships are essential. By working together, we can drive sustainable investment, create economic opportunities, internationally and for Dutch business, and build a more resilient, inclusive future.

The strengths of partnerships

By providing crucial financial support and mobilizing additional funding for underserved regions, FMO has continued to make a tangible impact in 2024. The strength of our partnerships—evident in the success of initiatives such as the SDG Loan Fund and European Commission guarantees—enable us to expand programs like NASIRA and the FMO Ventures Program. These programs contribute to local livelihood options for the one billion young people who will try to enter the job market over the next decade—a majority living in emerging markets. We are also grateful for the increased funding and support for the Dutch Fund for Climate and Development (DFCD Aya) from the Dutch government and the European Commission, and for Mobilising Finance for Forests (MFF) from both the Dutch and UK governments.

How these partnerships enhance our impact is marked by investments in customers like Camimex, a Vietnamese exporter of organic shrimp. With the Netherlands as one of the larger importers of Vietnamese shrimp, this investment increases climate adaptation and resilience for Vietnamese shrimp farmers and enhances carbon sequestration through expanded mangrove coverage. An investment sourced through our DFCD partnership with SNV. Another noteworthy example is our NASIRA guarantee to First City Monument Bank in Nigeria, the country that is most significant African trade partner of The Netherlands. The guarantee enabled increased lending to agricultural, youth, and women-owned SMEs, groups traditionally seen as too risky by banks.

Benefitting from these partnerships, as shown in the Camimex example, the Land Use Facility (LUF) or 'DFCD Aya', of DFCD, plays a crucial investment role in advancing sustainable land use and food security, following the priorities of the Dutch government. Managed by FMO, this facility targets investments in sectors such as agroforestry and sustainable agriculture. By supporting initiatives that enhance climate adaptation and resilience, the LUF contributes to food security, the well-being of vulnerable communities, and the resilience of critical ecosystems across Africa, Asia, and Latin America. Notable investments include projects that promote sustainable practices and improve livelihoods, demonstrating the facility's commitment to creating long-term value and environmental sustainability.

Looking ahead

In a volatile global landscape, FMO faces three key long-term challenges: a scarcity of investment-ready companies, limited availability of concessional funding, and increasing regulatory requirements. We remain committed to our 2023 ambitions and will increase our efforts to stay on track.

We will in particular focus on RI-labeled investments, especially in LDCs and on Green investments. Crucial next steps include the Market Creation initiative, onboarding of new EFSD+ programs and our increased cooperation with the Dutch and UK governments. As we reflect on the past year and prepare for the challenges ahead, we recognize that our achievements would not have been possible without our partners, and we extend our heartfelt gratitude to them for their trust and collaboration over the past year. We remain dedicated to deliver on the impact and trust that our partners place on us. At FMO, we believe that doing makes the difference, and that amidst the global turmoil, stepping up is a must.

The Hague, 31 March 2025

On behalf of the Management Board

Fatoumata Bouaré, Chief Finance & Operations Officer
Franca Vossen, Chief Risk Officer
Huib-Jan de Ruijter, Co-Chief Investment Officer
Michael Jongeneel, Chief Executive Officer
Peter Maila, Co-Chief Investment Officer