Letter from the MB of the Fund Manager

Dear reader,

Without a doubt, 2020 has been one of the most challenging years for FMO and its customers. Amid the economic and social fall-out of the pandemic, the state funds under management by FMO played an important role in ensuring that our customers could stay afloat. We look back with satisfaction on our ability to deploy all tools at our disposal to keep the pipelines on track.

In 2021, substantial challenges and uncertainties remain. The pandemic aggravates existing challenges related to climate change, the deepening inequality-crisis and macro-economic precariousness. The public funds and facilities under management by FMO will continue to play their countercyclical role, generate impact on the ground and contribute to the creation of markets in which private finance can flow to those areas where it is most needed.

For Building Prospects, the outbreak of the COVID-19 pandemic has meant that the fund had to operate in a fundamentally different economic environment in which investors, companies and governments faced significant operational challenges. Local lockdowns and travel restrictions have made local value chains increasingly important while routes to market changed overnight. Building Prospects continued to invest in local agriculture value chains and increased investments in Agri Tech and operational infrastructure.

Building Prospects invests in higher risk projects in sometimes remote areas, which became more difficult due to travel restrictions. Therefore, Building Prospects contracted a smaller amount than targeted, and the lag is expected to continue in 2021. On the other hand, the Fund has been instrumental in providing COVID-19 support through our capacity development program. Virtual knowledge sessions were organized for customers and emergency grants were provided enabling acquisition of protective gear or the development of communication tools

We thank all our stakeholders for their continuous support, including our customers 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, 29 April 2021

On behalf of the Management Board

Linda Broekhuizen, Chief Executive Officer, a.i.
Fatoumata Bouaré, Chief Risk and Finance Officer
Huib-Jan de Ruijter, Chief Investment Officer, a.i.